From Wall Street Journal Editorial 3-9-12
"For decades to, the EPA, in pursuit of relatively small air quality gains has been allowed to balkanize the U.S. Refining market with "boutique" fuels, driving up the price everywhere."
Editors note: 3 east coast refineries just went out of business after loosing money for some time and no buyers. There has not been a new refinery built in U.S. since 1976 and nearly a third have gone out of business since, many can not operate profitably with current regulations and with high mandated requirements tailored refining for each community and the lower demand for gasoline as a result of the recession and now high prices. It seems the only way to make a profit and stay in business for some refinery is to refine for export.
This is happening right now and started in 2011 with USA Today reporting for the year, U.S. was a net exporter of oil . March 26th issue of Time magazine:
For the first time in 20 years we are selling more petroleum then we buy.
Time magazine then shows a graph showing how U.S. switched to becoming an exporter of petroleum in 2011.
The public has little or no idea what's going on with energy.
The large refineries keep adding capacity so there seems to be no actual shortage of refining ability. The more local refineries going out of business such as one in Philadelphia planning to quit in June on top of 3 already this year, and cutting local supplies by fifty per cent. This replacement will have to be shipped in and will up the price at the pump.
The government requirements that make it unprofitable to operate refineries and more and more local refineries closing means prices are going to be further raised at the pump.
No one willing to buy unprofitable refineries. More local refineries going out of business means higher shipping costs from still operating refineries a long distance away.
The one Philadelphia refinery reported quitting in June unless they find a buyer, says they are trying out Bakken Sweet crude, a much easier to refine crude oil. They have been refining Brent crude at about 120 a Barrel imported.
Bakken crude (from ND) is currently selling at $70 due to cost of getting it out of there since they are producing more and more and shipping has not kept up and the xl pipeline committed to carry ND oil to coast refineries is off the schedule.
Pipelines have been at capacity for over a year and railroads maxed out. Refineries seem able to clear a good profit at the lower ND crude price, and there is speculation that it may save the Philadelphia refinery that has been operating at a loss.
The EPA requires a special boutique blend for the summer, mentioned above, formula requirements for each different community they refine for.
Estimates are that the additional "summer blend" requirements add over 25 cents to refining costs so that automatic additional summer increase does not start till April. Look for gas prices to go up an additional 25 cents as summer deliveries began.
Few Americans realize that U.S. Demand has dropped considerably with the high prices and recession. That despite Federal land essentially being withdrawn from new drilling, the U.S. new technological oil recovery development "fracking" had increased production considerable, primarily on private land. 18,000 new fracked wells to come on line in 2012.
Ethanol, government subsidized heavily has reduced consumption near ten percent.
With a surplus of petroleum for export the expensive ethanol is no longer a benefit.
To the surprise to all, figures show U.S. Exported considerable more petroleum products in 2011 then imported and the trend has increased in 12 as more and more production comes on line from Bakken and all over the country, such as Eagle Ford in Texas.
(U.S. now at 12,000 plus new fracked wells annually.) Number increasing rapidly to oil as gas now in surplus.
See USA article and graph with Information on U.S. Net 2011, Exports. here
70% of the new shale discoveries are on Federal land and when it is released, by a more friendly administration, and opened for production the exports will increase rapidly. Therefore all necessity for imports will end and the dollar balance will tip in U.S. favor.
Billions of dollars totally wasted on alternative energy economically unfeasible, waste will take years to get the scam stopped, as politicians can deceive the uninformed public.
Natural gas, now in huge new production from shale fracking, is already being exported and being prepared to handle in quantity shipped via LPG to much higher prices offshore. Takes about 3 years to develop the ports and special ships to handle it all.
Canadian oil becoming a huge amount from oil sands, is set to be refined primarily in U.S. adding to U.S. employment, despite much of it will then go overseas.
World demand will continue to increase, and "fracking of shale" all over the world will eventually cut demand, as local sources become available, but this will take five to ten years world wide to get fully up to speed.
U.S. Drillers will not have an interest to spread the new "fracking" shale oil and gas recovery system world wide until fully tapped here. Therefore, other countries will take a long time to develop crews etc.
Our Job, "educate America on energy"...
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