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Analyst's note:  Absolutely must read and carefully consider.  Here we read about more results coming from our nation's current "economic midgets" in control of our federal gov't.  Once again, we see that the gov't is NOT the solution to the problem, it is the problem! This growing economic problem "... can be traced to refineries' added expenses due to "a blizzard of regulations" from the Obama administration that require the industry to make cleaner and cleaner fuel ...."  We simply must get the feds out of our economic life, if we want our nation to survive.  Ultimately our national security depends on our choices. Progressives (socialist and Marxists) never seem to learn that socialism has never worked, so why do some insist that it will work here?  The answer has to be the desire for "power and gain" .... by those in control.

 

 

For sale: unprofitable Sunoco refinery in Philadelphia; supplies 24 percent of East Coast's gasoline; must sell by July 1 or will be shut down.

Really, no kidding.

The petroleum industry is shutting down US refineries, especially in the East, almost as fast as Americans are trading in their gas guzzlers for fuel sippers – and that does not bode well for East Coast motorists this summer.

[....] The closures mean gasoline refined elsewhere – the Gulf Coast or even Europe – will need to be shipped to the region by tanker, barge, or rail, causing higher prices at the pump and perhaps even supply disruptions in places like Washington, New York, and Boston.

[....] If Sunoco cannot find a buyer for its big Philadelphia refinery, almost half of the total East Coast refining capacity will be in mothballs. Overland pipelines bringing gasoline to the region are already running at capacity, so there's no hope for making up the difference that way.

 

[....] The industry may not be able to get a smooth supply line worked out for a year, warned the US Energy Information Administration in a February analysis. Until oil companies know whether the Sunoco refinery will be open or closed, they "are not likely to make significant investments in new logistical arrangements," the EIA said.

[....] The problem can be traced to refineries' added expenses due to "a blizzard of regulations" from the Obama administration that require the industry to make cleaner and cleaner fuel, says Mr. Gerard.

Lynn Elsenhans, Sunoco's chief executive officer, said in a February letter to a Pennsylvania state legislator that the firm had lost $900 million in the past three years on its Northeast refineries. "Our view is that the difficult conditions that led to these substantial losses will continue over the next several years," she wrote.

One of those conditions is falling demand for gas. Demand is down in the Un­ited States 5 to 7 percent this spring compared with a year ago. As a result, refineries in the Gulf of Mexico have lots of spare capacity and are now exporting 600,000 barrels of gasoline per day. In her letter, Ms. Elsenhans wrote that demand is expected to fall 16 percent "over the next few years."

Demand is falling in part because US consumers are driving less, a consequence of both a slack economy and high prices at the pump. And when they do drive, their vehicles are using less gas. The US government has mandated that the vehicle fleet achieve an average mileage standard of 34.1 miles per gallon by 2016, and those gas-sipping vehicles are already showing up in dealer showrooms. The new mileage standard alone is expected to cut gasoline demand by another 13 percent – equal to the output of 18 refineries – within the next decade, says Elsenhans.

After this summer, the logistics of supplying gasoline to the East Coast will get easier. By 2013, the Colonial Pipeline, which connects Gulf refineries with East Coast markets, will expand by 100,000 barrels a day, a 10 percent boost in capacity. An expansion of another pipeline that carries distillate (heating oil and diesel) should be finished by mid-2012.

Mr. Kloza, the OPIS publisher, notes that there is no shortage of gasoline. One way to expedite barge shipments of gasoline to the East Coast, he suggests, would be for the Obama administration to waive the Jones Act, which requires all goods moving between US ports to be on US-flagged, US-built ships crewed by US citizens. That would allow foreign-flagged tankers to help move gasoline.

The White House had no comment about whether it has a plan to relieve a possible gasoline shortage in the East [....]

 

 

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