How tough is the U.S. refining biz?

The Chronicle’s Brett Clanton had a great overview of the miserable state of the U.S. refining business in Saturday’s paper:

U.S. refiners now process less than 14 million barrels of crude daily, well below capacity of 17.8 million barrels per day. And demand for gasoline and other fuels remains weak despite signs the economy is improving.
“My sense is that we’ll see perhaps a half dozen U.S. refineries close in 2010, mostly in the first quarter,” predicts Tom Kloza, analyst with the Oil Price Information Service in Wall, N.J.
The best-case scenario for returning U.S. refiners to profitability would be a rapid closure of 1 million to 2 million barrels per day of plant capacity, Ihne said. Instead, the industry is moving more slowly, closing 200,000 to 400,000 barrels per day of capacity. That’s done little to improve refining margins–the difference between the cost of crude oil and other raw materials refiners use and the price they get for refined products.

Foreign investors are looking hard at U.S. assets, even considering buying a U.S. refinery to take it apart and reassemble overseas:

Elsewhere, Larry Nettles, a partner with Vinson & Elkins in Houston, said the law firm has been contacted by a client who is interested in buying U.S. refining assets that could be dismantled and redeployed to a “rapidly growing Asian market.” He would not disclose the client or the U.S. facilities the client is eyeing.

This last transaction may be a bit of a long-shot but it’s not without precedent.