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50% NE Refinery Closures Will Drive Up Gas

From CNN’s Money.Com:

Refinery closures risk Northeast gas price spike

By Steve Hargreaves
April 10, 2012

NEW YORK (CNNMoney) — While gas prices soar to record levels, many U.S. refineries that make and sell gasoline are going broke.

Nearly 50% of the refining capacity on the East Coast has either shut down or may shut down within the next few months.

If gas shortages develop due to the closed refineries, East Coast drivers could face higher prices than they otherwise would later this year.

Sunoco (SUN, Fortune 500), which closed its Philadelphia-area Marcus Hook refinery in December and is trying to sell another facility nearby, said its refining businesses has been losing $1 million dollars a day for three years running. Last fall, ConocoPhillips (COP, Fortune 500) closed its Trainer refinery, also in the Philadelphia area.

If all three refineries were closed, that would leave just six operating refineries in the Northeast.

The refineries are losing money because they are old and cannot process the cheaper, heavier types of oil that are increasingly in supply from Canada’s oil sands, Saudi Arabia, Venezuela and elsewhere.

The Sunoco refineries can process only the types of "light, sweet" crude imported from West Africa or the North Sea… Light, sweet oil is the easiest to turn into gasoline — but also costs about $20 more per barrel.

Refineries that have been upgraded and expanded along the U.S. Gulf Coast are capable of turning the heavier, cheaper oil into gasoline.

CNN does even not mention that there are reasons why the East Coast refineries haven’t been upgraded. It is because of impossibly strict ‘environmental regulations.’

In fact, the last new refinery built in the United States was Marathan Ashland in Garyville, Louisiana. And it was completed in 1976 BC (before Carter).

East Coast gasoline shortages are a real possibility — but not because there isn’t enough gasoline in the United States. The real problem lies in transporting that gasoline to the Northeast

Analysts worry there won’t be enough barge, tanker or pipeline capacity to bring the gasoline to market

Which is a bit of a shock, since we have been told by CNN and the rest of the media, and Barack Obama himself, that the Keystone Pipe wouldn’t have any effect on gas prices or shortages

This article was posted by Steve on Tuesday, April 10th, 2012. Comments are currently closed.

One Response to “50% NE Refinery Closures Will Drive Up Gas”

  1. GetBackJack says:

    Why … it’s as if the elites want us on foot, and they get to drive around “officially, of course” in limos chauffeured by security drivers.

    Didn’t we see this movie already?

    The Kremlin’s elite highways for State Officials only?

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