As if fuel prices aren’t already high enough, drivers on the East Coast may end up paying more at the gas pump than the rest of the country because of potential gas shortages as a result of the shutdown of many refineries in the region.
A CNN report found that almost 50 percent of the refining capacity on the East Coast has already either closed or will close down in the coming months.
Sunocco dropped its Philadelphia-area Marcus Hook refinery in December and is now trying to sell an adjacent facility as the company says its refining business has been losing $1 million a day for the past three years. ConocoPhillips also closed a refinery in the same area last fall.
According to the report, the refineries are burning cash because they haven’t been updated and can’t process the cheaper but heavier types of imported oil from Canada’s oil sands, Saudi Arabia, Venezuela and other parts of the world.
While there’s no shortage of gas per se in the United States, the problematic refining industry in the East Coast causes a logistical nightmare in terms of transport , as analysts claim there may not be enough “barge, tanker or pipeline capacity” to transfer the oil to the North East.
“There are going to be logistical problems getting product into New York,”Oil Price Information Service analyst Ben Brockwell told CNN news. “The people I talk to are expecting shortages from August through the rest of the year.” And as we all now, shortage equals an increase in prices…
The news site said that the U.S. Energy Information Administration sees a possible danger. “The potential loss of the Sunoco Philadelphia refinery presents a complex supply challenge,” the agency said in a report it released recently.
