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With its three refineries, Koch Industries finds itself caught in a historic tug of war between the forces that are shaping the nation's federal energy policy.
On one side are environmentalists and Environmental Protection Agency lawyers. They are pressing. the oil industry for cleaner fuels and raising the stakes in legal cases over pollution. Companies that violate environmental regulations are finding themselves facing not only civil lawsuits but criminal charges, too.
As a result refinery operators are being forced to spend millions to meet federal rules and to protect their executives from prosecution.
On the other hand is a strong economy and a wave of prosperous consumers who are buying gas-guzzling sport utility vehicles in record numbers and burning more than 18 million barrels of gasoline a day. As baby boomers reach the comfortable middle of their careers they are consuming 50 percent more fuel than their parents did.
With all the mixed signals, is this the right time for Koch to commit itself to the refining business by investing heavily in updating facilities - or would it make more sense for the company to begin devising an exit strategy?
That remains to be seen, says company president Joe Moeller. All of Koch's many diverse operations are constantly being reevaluated, he says. Mounting government regulations and the high cost of compliance have to be taken into account.
"Refining has always been a backbone industry for us," Moeller says. "It's hard to imagine we won't own refineries. But it has to go through the evaluation process."
Number of refineries declines
Even if the U.S. had an unlimited supply of crude oil - which it doesn't - the nation would still be losing its historical ability to refine it.
"If oil's price is high enough to make retrieving it profitable,...