The last new oil refinery was built in the United States in the early 1970s, Hatch said Wednesday. "But a point often missed is that the economics of refining is so tough that we have actually lost about 200 refineries since the last one was built."

To help encourage the construction of new refineries and expand the capacity of existing facilities, Hatch wants to put refineries on an equal footing with other manufacturing enterprises by offering more liberal tax breaks for the purchase of new refining equipment.

Under his proposal, refiners will be able to completely write off the value of their new equipment in the first year of use as long as they are willing to commit to expanding their operations before 2007 and can have those new facilities up and running by 2011.

Hatch's proposal eventually could increase the supply of domestically produced gasoline, diesel fuel and other petroleum products while reducing future demand for imported products, said Bob Slaughter, president of the National Petrochemical & Refiners Association.

Still, Slaughter said future capacity growth will almost certainly come from the expansion of existing facilities rather than construction of new refineries. "The cost and risk of building a new refinery will remain prohibitive," he said.

Hatch said his proposed legislation - the Gas Price Reduction Through Increased Refining Capacity Act of 2005 - is part of a three-pronged long-term approach to dealing with the country's high gasoline prices.

Last week he introduced legislation aimed at making alternative-fuel vehicles more attractive to purchase and operation.

And in the next several weeks, Hatch intends to introduce legislation to encourage development of the nation's tar sands and oil shale reserves, which primarily are located in Utah, Colorado and Wyoming.

steve@sltrib.com