Energy In The Age Of Angst Harsh standards, aging refineries and global uncertainty drive reforms.(INDUSTRY SNAPSHOT)(OIL & GAS - REFINING AND MARKETING)

Byline: MONICA SHOWALTER

As his refinery strained to meet surging demand for gas, Matt Clifton had to get creative.

Clifton -- then vice president of strategic planning for Holly Corp. -- knew the company's Navajo refinery in New Mexico needed more capacity.

But building a new plant from scratch was out of the question. Environmental regulations, a long permit process and neighborhood opposition made doing so too risky.

In fact, not one new U.S. refinery has been built since 1976.

But expanding existing facilities would also be a big investment, and Clifton wanted to grow on the cheap. So he sought ways to expand that others had overlooked.

At the time, big-name oil companies were abandoning inland operations in favor of huge coastal refineries and overseas investments. For Holly, that was its opportunity.