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Actually there was excess refining capacity in that time frame but with by todays standards poor technology. There were little refineries that were in the 50k bbl/day range with no economy of scale. They were originally built for a local oil well that had since dried up. They piped or shipped in crude and the cost was just too high so they were shut down. The mid grade refineries in the 100K bbl range got de-bottle necked a term called creep in the industry. That increased their capacity to make up for a lot of the loss of small refineries and new much more efficient technology was incorporated. The idea that their were no new refineries built for years while true is not accurate from a bbls / day perspective because of increasing the capacity of existing refineries. We went from 75K / day in the early 1970s to 125K in the early 19780s and up to 175K / day by the late 1990s by improving technology and new process units. The numbers of employees dropped by 2/3 in the same time frame.