We're often told a lack of refining capacity in the United States is
contributing to the high cost of gasoline in that country. If that
were truly the case, one might rightfully ask why the U.S. exports 1.6
million barrels of finished petroleum products each day. (*)
(*) Yes, I know. It's the fault of those "widdly toed pink wearing
fuckin queer tree huggers".
That's a tough one, but I'll venture some wild-ass guesses:
* Because the people who own the petroleum products can get more for it by
selling it elsewhere?
* Possibly because we have a 12-month supply of axle grease?
* Oh, I know: Because current law does not allow selling asphalt with more
than 10% contamination by heavy metals such as Thallium?
What this article tells me is that there's no merit to such claims;
namely, that there's no shortage of refined product or refining
capacity and, consequently, no negative impact on retail price.
| >Paul M. Eldridge wrote:
| >> were truly the case, one might rightfully ask why the U.S. exports 1.6
| >> million barrels of finished petroleum products each day. ...
| >Read the article, it says why, you simply have to comprehend...
| What this article tells me is that there's no merit to such claims;
| namely, that there's no shortage of refined product or refining
| capacity and, consequently, no negative impact on retail price.
What this tells me is that this has nothing to do with home repair!
Gee, and if you read the article you'd find out why:
But many energy experts say oil and petroleum products are traded globally, and
it may make economic sense to export gasoline refined along the U.S. Gulf Coast
to Latin America and import European-refined gasoline to U.S. East Coast
John Felmy, the chief economist at the American Petroleum Institute, said a
portion of the oil products exported, especially diesel, was fuel that did not
meet U.S. clean air requirements and therefore could not be sold in America.
"You may have some that you're not able to use," he said.
Correct. Finished products are bought and sold on the world market
and increasing domestic refining capacity would have little or no
material impact on retail price given that the marketplace is already
well served. If anything, adding more capacity would only drive many
of the smaller, independent players out of business.
Especially considering the number of shuttered refineries in the US
already. Why here in the Buffalo / Niagara Falls area there are two
refineries that were completely shut down in the 70's, just standing
there rusting away...
Exactly. In the early '80s, there were over 300 refineries operating
in the United States and as of January 1st, 2008, there are now just
150. Yet, with expansion, refining capacity has remained about the
same -- 17.6 million barrels per day versus 17.9 million -- and
utilization factors have improved from 74.0% in January 1985 to 86.2%
in April, 2008. Refiners have the ability to produce more gasoline if
needed, but the crack spread is so low that many of the smaller
players are slowly being squeezed to death; it's simply cheaper to
import gasoline from other countries where it is available in excess
supply (to get a sense of just how tight things are, take a look at
the bottom two lines of the graph shown here:
Let's not kid ourselves, the U.S. is facing a serious energy crisis,
but it has nothing to do with refining capacity. Politicians and
talking heads are feeding the public a bunch of bull crap and folks
suck it up and parrot it as if it were gospel truth. Rather than tell
you the truth, they trot-out the usual escape goats -- "the damn
environmentalists who have prevented us from building a new refinery
in the last thirty years", "evil speculators jacking up the price of
oil", "those audacious Arab countries that refuse to sell us *our*
oil". Anything but basic supply and demand.
P.S.: When I lived in Toronto, Youngstown, NY was my second home. I
have many great friends in the WNY area and fond memories of my time
And that's the key point. We need to educate ourselves and draw our
own conclusions; otherwise, we allow ourselves to be manipulated by
others who may not have our best interests at heart.
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