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By Robert Rapier on Jan 31, 2012 with 35 responses

Refinery Closures Lead to Rising Gas Prices and Job Losses

Refinery Closures and the Keystone Pipeline

There have been several announcements in recent months of refinery closures that will likely impact gasoline supplies (and prices) on the East Coast. Some of those closures have been on the East Coast. Others — such as the Hovensa refinery in the Virgin Islands and some European refineries — supply product to the East Coast.

So why are these refineries closing?

Basically, despite the very popular image of perpetually fat profits for the oil companies, the refining business has been historically poor. If a refinery often operates in the low single digit rates of return — or as has frequently been the case, loses money — oil companies will eventually shut them down. Even if other parts of the business are making money, they won’t keep funding a money loser.

But why do refineries struggle with profitability?

In recent years, demand for gasoline has been down due to high prices in the U.S. As oil prices have climbed, refiners have struggled to pass on all of the increased costs of those higher oil prices to consumers. They would like to sell gasoline for a bit more, but the reduced demand keeps their margins low for the most part. Ultimately some are forced to shut down. That will also mean higher gasoline prices for consumers:

No relief in rising gasoline prices as refineries shut down

“On January 18, Hess announced the closure of its HOVENSA joint venture refinery in the U.S. Virgin Islands, a major source of product supply to the East Coast,” the Energy Department said. “That planned closure follows on the heels of the idling of two refineries in the Delaware Valley by Sunoco and ConocoPhillips and announced plans by Sunoco to idle another refinery in the region by mid-2012.” The Energy Department added, “The complete idling of the three refineries would collectively cut as much as 50% of current East Coast refining capacity.”

Operating a Refinery Requires Manpower and Creates Jobs

In addition to higher prices, the closures mean loss of jobs in a very tough economy. As I pointed out recently in What’s So Bad About Exporting Gasoline?, one way to keep those refineries going is something that some have complained about, and that is for refiners to export finished products. It should be clear by now that these refiners must find additional markets (or cheaper oil) if they are to survive.

These thoughts were rattling around in my head the past few days, and just today crystallized into this post. One of the things I have been thinking about are the implications if the Keystone Pipeline is or isn’t built. I have explained my views on the pipeline in a series of recent posts, so I won’t rehash them here. But basically, I have tried to sort out the most likely implications in either case. If the pipeline isn’t built, will it slow down the development of the oil sands in Canada? Will that oil continue to get to market, but in environmentally riskier ways (like trucking or rail). Will it cause Canada to more aggressively seek other markets for their oil? Probably:

With oil pipeline to US on hold, Canada eyes China

Prime Minister Stephen Harper says Canada’s national interest makes the $5.5 billion pipeline essential. He was “profoundly disappointed” that U.S. President Barack Obama rejected the Texas Keystone XL option but also spoke of the need to diversify Canada’s oil industry. Ninety-seven percent of Canadian oil exports now go to the U.S. “I think what’s happened around the Keystone is a wake-up call, the degree to which we are dependent or possibly held hostage to decisions in the United States, and especially decisions that may be made for very bad political reasons,” he told Canadian TV.

The article notes that pipelines are rarely rejected in Canada, but Keystone opponents are counting on that oil not being able to reach the Pacific Coast for export to China. After all, if it does then they will have made matters worse by blocking the route into the U.S. and forcing the oil to travel a further distance to market.

The Keystone Pipeline is of course really about climate change. Opponents want to stop the expansion of the oil sands, and so they have thrown several wedge arguments out there in order to reach their ultimate goal.

Conclusion: Exporting a Product is Good for Business*

One of the wedge arguments is about job creation. Proponents have made certain claims (in many cases inflated) about the number of jobs that will be created. Opponents counter that there won’t be that many jobs created, and besides some of the oil is going to be exported.

That may be the wrong way to look at it. If you see what is happening with the refinery closures, what a pipeline to the U.S. Gulf Coast may do is keep some of the refineries there in business. Imagine if these East Coast refineries — which don’t have easy access to affordable oil — were at the end of the Keystone Pipeline. They might have managed to stay in business. Sure, they might export some of the gasoline and jet fuel. So what? Will the product simply not exist on the open market if those refineries didn’t make it? Not likely; it would just be refined by someone else.

So we may look back in a few years — as we are closing down Gulf Coast refineries because their major source of oil is ever more expensive crude from the Middle East and Venezuela — and realize that those jobs could have been saved if only they had better access to a friendly, stable supply of oil. So what if we import Canadian oil and export gasoline? In an oil crisis, we won’t export the gasoline. We will use it right here at home. That is, if the refineries actually have access to the crude.

* Incidentally, now that the ethanol subsidy has expired, I feel the same way about exporting ethanol. If that’s what it takes for them to stay in business, as long as they aren’t exporting taxpayer subsidized product then more power to them.

Link to Original Article: Refinery Closures Lead to Rising Gas Prices and Job Losses

By Robert Rapier

  1. By Rufus on January 31, 2012 at 1:06 am

    U.S. Gasoline Demand is down 6.4% from this time last year.

    http://ir.eia.gov/wpsr/wpsrsummary.pdf

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  2. By shecky vegas on January 31, 2012 at 6:59 pm

    This is just another example of the incestuous relationship within Big Oil that allows them to manipulate pricing of refined fuels.

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  3. By Optimist on January 31, 2012 at 7:49 pm

    This is just another example of the incestuous relationship within Big Oil that allows them to manipulate pricing of refined fuels.

    Feel better, Shecky? Care to explain the logic, or does logic not enter into that emotion?

    If you can’t explain the logic, please feel free to keep the incestuous comments to yourself…

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  4. By Optimist on January 31, 2012 at 7:53 pm

    U.S. Gasoline Demand is down 6.4% from this time last year.

    Interesting! Rufus, is that a sign that the economy is slowly imploding, or that it is getting more productive in terms of oil?

    Over here we seem to be in the middle of a slow and fragile recovery. Maybe we’re learning to do more with less, without severe consequences. Win-win-win?

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  5. By OD on January 31, 2012 at 8:06 pm

    Middle East & Venezuelan oil is more expensive than Canadian oil sands? I thought the oil sands was some of the most expensive on the market.

    I still think this pipeline gets built. TransCanada has already said they will re-apply for their permit.

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  6. By Rufus on January 31, 2012 at 8:13 pm

    I think . . . a little bit of both, Optimist.

    But, owing to the fact that we now have 46 Million Citizens on Food Assistance, that Median Disposable Family Income is plunging, that Unemployment is 8.6%, and that new car sales are down over 25% from their highs, I’d have to lean toward “implosion.”

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  7. By Tom G. on January 31, 2012 at 9:17 pm

    For many months there has been a sometimes spirited discussion on many blog sites about oil or should I say the lack thereof. What I have learned on this site and many other blog sites is the following.

    1. There currently seems to be enough oil to go around for everyone in the U.S. and on the world market.
    2. A sharp increase in fuel costs are usually customary during the summer driving season and this year it is expected to reach $5.00/gallon, and;
    3. Oil is going to keep getting more and more expensive because:

    A. Oil is a finite resource and will become more and more expensive to get
    B. Other countries want what American has had for generations,
    C. Almost everyone in India and China want a car, and:
    D. The ‘term energy independence’ no longer seem to matter since the oil goes to the highest bidder. Oil produced in American no longer stays in America.

    But all is not lost unless we fail to take action. One of Roberts postings was about “The Oilman in the White House”. I believe we are already in the drill-baby-drill mode which he also high-lighted in another story dealing with the number of new wells being drilled and in production since our current president took office.

    So I am thinking – just maybe we are now entering a new phase of energy in America. Sales of hybrid vehicles are on the rise but are still too expensive for my blood. However, 5 new hybrid and electric vehicles are being introduced in 2012. By 2013 battery costs are projected to be 20% cheaper and then another 20% by 2014. That $40,000 Volt will become $30,000 before you know it.

    When that happens those expensive hybrids might just become competitively priced if gasoline hit the price some people are projecting. Solar PV panels now cost LESS than $1.00/watt and all of the components for a complete 5 kW systems for your home can be purchased for less than $15,000.00.

    The way we create, transmit and use energy is going to change significantly in the next 5-10 years. It is very interesting to watch our transition to a cleaner environment play out.

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  8. By Ian Random on January 31, 2012 at 9:28 pm

    Major Petroleum 6.7% profit margin. Toys 10% profit margin. Yeah right.

    http://seekingalpha.com/articl…..igger-fish

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  9. By sam-geckler on January 31, 2012 at 10:38 pm

    Tom,

     

    I’ll reiterate something Robert continues to point out; oil prices likely won’t be driven by western demand as emerging economies increase and ultimately far surpass our consumption. Whether the US market goes all hybrid, all EV, or all bicycles, excess production capacity, at the world level, will remain limited. In this scenario we’re bouncing off the rev limiter. Robert has coined that “Peak Lite.” Here, he is just observing that if certain crude resources are developed, and if in fact US demand continues to droop, we could add value to crude and export the refined product. It will be very difficult to argue against that is this economy, and we may look back on certain decisions and shake our heads. I’m all for reducing my contribution to our per capita energy consumption, mostly because I can save money, but there is also money to be made. Very tough calls when considering all sides IMO.

     

    Sam Geckler

     

     

     

     

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  10. By Benny BND Cole on February 1, 2012 at 12:22 am

    Interesting commentary by RR.

    And yet I think refineries are inevitably a dying business in the USA. With luck or policy, our gasoline consumption will be halved in the next 20 years. Sheesh, when a Lincoln MKZ luxury car can get 41 mpg….
    And there is a PHEV on the market…
    And people are already buying CNG cars…..
    And the ethanol lobby is invincible….

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  11. By Joseph on February 1, 2012 at 3:39 am

    So I am thinking – just maybe we are now entering a new phase of energy in America.

    For sure if Congress pass the NAT GAS Act (New Alternative Transportation to Give American Solutions)… but I’m not hopeful. The current administration would rather skip NG and jump straight to “electric” and, as Jim Cramer stated: “the petrochemical industry will kill it by teaming up with the coal industry to lobby against it. Coal doesn’t want natgas to win anywhere and the chemical industry wants low natgas prices. Neither interest could care less about the benefits of this bill and both interests have a lot of firepower to stop this.”

    That $40,000 Volt will become $30,000 before you know it.

    I just saw my first Prius V today and it was quite easy to distinguish it from the smaller Prius. Car and Driver lists the price as $27,160 – $30,750. What was interesting is that it was a taxi, and that is where the biggest bang for the buck is…taxi, courier, delivery, etc, fleets that are on the road a lot.

    It will be very difficult to argue against that is this economy, and we may look back on certain decisions and shake our heads.

    I don’t think so on a number of points. After all, if job creation (or simple job maintaining) was the issue then it would be very easy to create jobs.

    With luck or policy, our gasoline consumption will be halved in the next 20 years.

    No luck of policy required, we are already on the path. Policy, such as passing the NAT GAS Act, would only accelerate the trend. I posted this in a previous forum… even with just our current oil use trajectory we will be seeing significant reductions in per capita oil consumption over the next decade:

    - The aviation sector will see a 25%-30% fuel use reduction because 1,000s of jets are being replaced, equipment is being upgauged and NextGen ATC will be operational.

    - Trucking fleets, such as Wal-mart’s (the nation’s largest), are increasing fuel efficiency by up to 100%.

    - Companies like UPS are increasingly moving more freight via rail (if you’ve seen the CSX hype on TV they claim they can move a ton of freight nearly 500 miles on a single gallon of fuel).

    - Many commercial carriers are renewing their fleets with more more fuel efficient vehicles including CNG/LNG and hybrids.

    - New CAFE standards.

    - Industry is increasing oil efficiency like Interflor (largest carpet manufacturer), Coca Cola, etc. that have plans to eliminate all petro-based products by 2020.

    - Demographics: aging population that drives drive less while younger generation is increasingly more socially responsible.

    - World’s largest user of oil (Defense Dept.) will be reducing consumption due to budget cuts, foreign intervention pullbacks, and increased “vehicle” efficiencies.

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  12. By rrapier on February 1, 2012 at 12:27 pm

    OD said:

    Middle East & Venezuelan oil is more expensive than Canadian oil sands? I thought the oil sands was some of the most expensive on the market.

    The stuff in Venezuela is about the same. They have to upgrade it just as with the oil sands, and then it gets shipped to U.S. refineries on the Gulf Coast. I would have to look, but my guess is that the upgraded oil is priced close to the same in those cases.
     

    RR

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  13. By tom-g on February 1, 2012 at 12:45 pm

    Lots of good comments and discussion on this topic.  While my following comment is quite far removed from the topic of oil refineries it might stir some comments about energy production and reduced consumption.  

    For years I have followed the progress of the “MIT City Car” and finally someone is going to build it.  Also I have seen many other 2 passenger prototypes and actual vehicles in the last couple of years but none look quite as sexy to me as the MIT City Car.  HOWEVER, there is always a however isn’t there – I am not running for my checkbook quite yet.  

    As a retired senior the MIT City Car it is exactly what I need for my everyday driving.  Now I am not saying it could work on L.A. freeways or allow you to travel 300 miles in comfort but it could sure get my butt to the Home Deport, Lowe’s or Ace hardware for a couple of gallons of paint.  My wife could use it to go grocery shopping and we could snuggle up and go out to dinner and a movie.  If I did work, which I don’t, it would be fine where I live since the town is only 12 miles from end to end.  So if it was electric and had a 40 mile range, it would probably handle 95% of all of my transportation needs.   

    But alas, it is not my dream car and here are some of the changes I would like to see for the American market.  

    +  I would forget the 4 wheel steering electric motors and go with a fixed rear axle and one or two motors.

    + I would forget the elevation of the body to compact parking size.  We don’t have a parking problem where I live.

    + I would LIKE IT TO HAVE lots of electronics including things like ABS and NEAR FIELD CRASH AVOIDANCE like ford and others are developing

    + It must play everything I put into the slot on the dashboard or something I plug into a USB port

    + I would like NEAR FIELD inductive charging so when I park it in the garage it automatically starts charging.  My wife would never plug it in Wink

    + And it should be smart enough to know when the peak rates are and should learn my driving habits so it can select the best cost per kWh. 

    + It should have a top speed of 60 mph and a range of 40 miles.  It must have a brisk acceleration up to about 45 mph. 

    + It MUST HAVE air conditioning and a heater

    + And if it does all of the above AND is a hatchback with storage my checkbook is near at hand.

    O.K so I dream a lot but vehicles like this are coming and in the not to distant future.  While golf cars are an effective means of transportation in many areas, they don’t work well where it gets too cold or too hot.   I don’t need a 4/5 passenger vehicle to do the things I mentioned above.

    What do you think – is it possible this type of vehicle could meet some of our transportation needs in the U.S.?

     

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  14. By Joseph on February 1, 2012 at 3:53 pm

    And if it does all of the above AND is a hatchback with storage my checkbook is near at hand.

    They are getting closer and closer to your wish list. The Mitsubishi i MiEV was recently introduced here () and Toyota announced that their Scion brand will be launching the electric version of their iQ here this year (this is the link to the gas ICE version: ).

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  15. By Joseph on February 1, 2012 at 3:56 pm

    Sorry, I screwed up on the formatting. Here are the two links:

    http://i.mitsubishicars.com/?i…..7_04012011

    http://www.scion.com/cars/iQ/

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  16. By tom-g on February 1, 2012 at 7:20 pm

    I like the iQ the best and will go look at the local dealers showroom when the electric version becomes available.   

    Thank you for the links.  

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  17. By paul-n on February 1, 2012 at 11:01 pm

    RR wrote:

    If the pipeline isn’t built, will it slow down the development of the oil sands in Canada? Will that oil continue to get to market, but in environmentally riskier ways (like trucking or rail).

    The railroads are already looking at this,and have been for a while. They are already moving lots of crude out of the Bakken… 

    Pipeline on Rails

    Benefits

    Uses existing rail lines from Fort McMurray, Alta., to Prince Rupert, B.C., skirting opposition to Pacific crude exports via new pipeline(s).

    Low capital costs. Each 550-barrel tanker car costs roughly $100,000; given a 10-day transit time from Fort McMurray to the West Coast, 55,000 barrels per day of capacity would cost $100-million for 1,000 rail cars, running in 100-car trains every day. CN would also need to build a terminal on the coast, at a cost of $200-million to $500-million.

    Could be put in place quickly, and scaled up or down rapidly.

    Rail, by CN’s calculation, is less greenhouse-gas intensive than pipelines.

    There are actually some other benefits too..  Moving by rail they can move pure bitumen, which is virtually solid at ambient temperature.  A derailment would not cause a “spill”, it would be like having blocks of road asphalt lying around.  It also avoids the need for a return pipeline for the diluent – which would cause a real spill if ever ruptured.

    The most amazing thing is that just an extra ten trains a day, on existing rail lines, can equal the capacity of the pipeline, for 1/10th the capital cost. And no long regulatory battle needed either…

     

    Personally, I think this idea has a lot of merit.

     

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  18. By paul-n on February 1, 2012 at 11:11 pm

    Middle East & Venezuelan oil is more expensive than Canadian oil sands? I thought the oil sands was some of the most expensive on the market.

    Actually,Canadian oilsands bitumen is the cheapest!

    Prices from Alberta Government’s end of year bulletin, as at Dec 31

    WTI at Cushing $99.65

    Western Canadian Select (conventional crude, at Hardisty Alberta) $86.93

    Synthetic Crude (upgraded from bitumen, at Edmonton) $104.91

    Hardisty Bitumen $75.34

     

    So, the bitumen is really cheap – you just have to get it to a refinery that can handle this heavy stuff, and theya re all on the Gulf coast…

    Upgrading the bitumen to syncrude is almost as expensive as refining it, and with Gulf Coast refineries having spare capacity, they’ll take any heavy oil they can get.  so the best plant for the oilsands producers is to ship the bitumen, which is what the pipelines are all about…

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  19. By paul-n on February 1, 2012 at 11:13 pm

    For sure if Congress passes the NAT GAS Act (New Alternative Transportation to Give American Solutions)

    I think Congress should first pass an Act banning such silly acronym based names for Acts…

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  20. By Tim Weiman on February 2, 2012 at 10:28 am

    Paul N

    I don’t believe it is accurate to suggest moving heavy Canadian by rail means diluent is required. That’s not what producers are telling us today.

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  21. By paul-n on February 2, 2012 at 12:01 pm

    Tim,

    They have been moving both – really good write up about in Oil and Gas Enquirer ;

    “Rail can get you just about anywhere,” Sametz said. “It’s like the Harry Potter stairway. You get on the stairs at one end and they move to wherever you need to go. That’s the beauty of the railway. You get on at one end here, with your bitumen or dilbit, and then you can end up in different places depending on what are the best markets.”

    And from CN rail’s business development guy;

    Rail can get bitumen from Fort McMurray to the USGC in 10 days versus 50 or 60 days via pipeline, he said.

    Shipped by rail, bitumen does not have to be diluted, he added.

    “In fact, it’s better if you don’t because there’s no point. Not having to dilute bitumen with diluent makes transport safer because, in the case of a break or crack, it won’t escape into the environment. At ambient temperature it doesn’t flow,” said Meyer.

    There sure look to be a lot of advantages of this over pipelines.    The only reason it hasn;t happened much before is that oil companies aren’t used to it, that’s all…

     

     

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  22. By Joseph on February 2, 2012 at 12:44 pm

    There sure look to be a lot of advantages of this over pipelines. The only reason it hasn;t happened much before is that oil companies aren’t used to it, that’s all…

    With the existing pipeline network it would appear that there really hasn’t been a use for it (transport by rail) before. If rail is a viable option it then becomes a battle between pipeline companies vs railroad companies to serve refineries… or ports.

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  23. By Tim Weiman on February 2, 2012 at 3:00 pm

    Paul N:

    I had typo and meant to say that diluent is required when moving the Canadian heavy by rail. The producers we work with – buy from – are blending at about 17-19%.

    There is some debate as to whether coiled cars are necessary (for heating), but we strick with the assumption that indeed they are.

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  24. By paul-n on February 2, 2012 at 4:03 pm

    @ Joseph

     

    Actually, oil was primarily moved by rail a century ago, before pipelines were around.  But in the modern oil industry, rail has been a very niche player.  However, rail has some real advantagesin that it does not need these pipeline approvals, and, for the producers, they do not need to commit to hard volumes needed to justify a pipeline.  Now, if they want a rail line extension, then it may be a different story…  Still, there is a lot of flexibility there, especially for smaller producers.  

    I am sure the railroads are quietly smiling at the torture the pipeline co’s are going through…

     

    @Tim.  Thought that was a typo.  I would think that (heat) coiled cars are needed, although i see many aluminium coal cars here that say “radiant thaw heat only”  In winter the coal can freez solid in the rail cars so I guess that’s how they solve that.

    In any case, I’m sure CN is working very hard, as we speak, on how to do a large scale undiluted bitumen facility at Prince Rupert.  It would conveniently skirt a whole host of environmental and regulatory issues.

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  25. By savro on February 2, 2012 at 4:08 pm

    @Paul and @Joseph,

    See this: Buffett’s Burlington Northern Among Pipeline Winners (Bloomberg).

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  26. By paul-n on February 3, 2012 at 1:30 am

    Yep, pretty good for all the railroads, incl BNSF.  Pretty clever guy, that Buffet – that is why he is the world’s most successful investor.  When you are that rich, you can finally buy the train set you always wanted as a kid!

     

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  27. By Clee on February 5, 2012 at 7:12 pm

    The refineries that are listed here as shutting down are on the East Coast. The Keystone XL pipeline would bring crude to Oklahoma and Texas, not the East Coast. At least, I don’t see any crude oil pipelines to the East Coast at http://www.theodora.com/pipeli…..lines.html
    I don’t see how the Keystone XL pipeline would keep East Coast refineries open.

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  28. By rrapier on February 5, 2012 at 7:19 pm

    Clee said:

    The refineries that are listed here as shutting down are on the East Coast. The Keystone XL pipeline would bring crude to Oklahoma and Texas, not the East Coast. At least, I don’t see any crude oil pipelines to the East Coast at http://www.theodora.com/pipeli…..lines.html

    I don’t see how the Keystone XL pipeline would keep East Coast refineries open.


     

    That’s not what I said. I said that we may be having the same conversation about Gulf Coast refineries in a few years as their oil continues to become ever more expensive. The East Coast refineries might have stayed open if they had access to affordable supplies of oil. Right now, Gulf Coast refineries have access to oil at a price that allows them to operate at a profit. That won’t necessarily always be the case.

    RR

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  29. By Clee on February 5, 2012 at 7:24 pm

    Ah. Thanks for the clarification.

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  30. By garsky on February 6, 2012 at 2:22 pm

    Paul N said:

    For sure if Congress passes the NAT GAS Act (New Alternative Transportation to Give American Solutions)

    I think Congress should first pass an Act banning such silly acronym based names for Acts…


    Yes, they could call it the Prevent Annoying and Unnecessary Law Names Act.

     

    Or PAUL N Act for short.

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  31. By paul-n on February 6, 2012 at 5:40 pm

    +10!

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  32. By Hemi on February 22, 2012 at 6:10 am

    Are you really trying to tell me that the oil companies want oil prices to go down? Oil production in the U.S. is at a near decade high, how do think they’ll like selling that oil at $50 a barrel? And most of our oil already comes from Canada. Oil from the Mid East is at it’s the lowest levels in years. And guess what I just read yesterday? Here’s the first line “For the first time, the top export of the U.S., the world’s biggest gas guzzler, is — wait for it — fuel.” A decade ago, fuel wasn’t even among the top 25 exports of the U.S. U.S. refiners exported 117 million gallons per day of gasoline, diesel, jet fuel and other petroleum products, up from 40 million gallons per day a decade earlier. So while demand for gas has fallen off a cliff in the U.S., there’s no shortage of other buyers. And this, my furry friend, along with your Keystone pipeline, is going to send U.S. motorists to the poor house for lack of a supply cushion here at home. So, I have one question for ya, which oil company is buttering your bread????

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    • By Robert Rapier on February 22, 2012 at 12:12 pm

      Are you really trying to tell me that the oil companies want oil prices to go down?


      Your rant indicates you don’t understand the difference between an oil company and an oil refiner. Oil refiners make much less money when oil prices are high, because they have to buy their oil, and they have trouble passing those costs on. Integrated oil companies may or may not make more money, depending on how much of your business is refining versus oil production.

      And this, my furry friend, along with your Keystone pipeline, is going to send U.S. motorists to the poor house for lack of a supply cushion here at home. 

      You have it backwards. Fuel that is being exported today is fuel that is available tomorrow for U.S. consumers. That’s why it has never bothered me that the U.S. exports food. That keeps farmers in business, and that food might be needed here at home in a crisis.

      So, I have one question for ya, which oil company is buttering your bread????

      Really? Should I presume then that someone is paying you to spread misinformation?

      RR
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  33. By Liberal energy investor on February 22, 2012 at 8:08 pm

    I understand there are more than a few ranters here, but with the exception of a couple of posters, RR, for one, there is so much misinformation about energy, energy companies, supply/demand and global cost differentials in these posts that they are all pretty, well, ignorant. I spent years learning about this stuff and still know very little. But if you don’t know the difference between a refiner, an integrated oil company, an E&P company, a pipeline company, an oil service company, a land drilling company, an offshore drilling company, and all the machinery and materials companies that go in to producing 1 barrel of oil or 1 mcf of natural gas – it’s hard to make judgments about their motivations, profit profiles and point of view, generally. Also, most of the facts that are thrown about are snippets of information either plain wrong or completely taken out of context.   

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  34. By santanarayne on April 3, 2012 at 4:45 am

    The recent increase in gas prices has once again brought the issue of energy policy to the forefront of the American psyche. The only way to remain a world power is to have a cost-effective and sustainable supply of it.

     

    Here’s more: http://chriscrosby.net/blog/2012/03/16/americas-gas-pains/

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