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To: Gabz
Heck we’re exporting the dag gone stuff, which tells me there is plenty of it and the price should not be anywhere near what it currently is.

Yes, we're exporting fuel for the first time in years.

But there is a reason.

Because of lower demand, the refiners have shut down a number of refineries -- the most inefficient ones, mostly located in the Northeast. It makes sense, doesn't it, to shut down the most inefficient facilities when there is an over-supply?

This left the Gulf Coast refineries, still running at close to full blast (the most efficient way to operate a refinery), with an over-supply for the markets they serve. Normally, the excess would be shipped to the fuel-poor part of the country (i.e., the Northeast). But there was no pipeline capacity available to do so -- the eco-warriors and the government having mitigated against any expansion in pipeline capacity between the Gulf Coast and the Northeast.

So, what to do with the excess capacity? Ship it in tankers to the fuel-starved Northeast? Just one problem: All shipments from one U.S. port to another U.S. port must travel on U.S.-flagged shipping with fully unionized crews. Which is so prohibitively expensive that nobody ships port-to-port in the U.S. anymore.

So, instead, the Gulf Coast refineries put their excess product on a tanker and ship it to (mostly) Caribbean countries. Meanwhile, Caribbean refineries (and Nigeria) ship fuel to the Northeast -- because this is the most efficient way to supply the product to the market.

In other words, the only reason why we are exporting fuel is two-fold:

1. A weak economy, thus a weak market for refined products.

2. Adverse government policy on pipeline construction and maritime labor.

If you still want to blame Big Oil, recognize that they're only acting in their stockholders' best interests.

24 posted on 02/14/2012 2:20:54 PM PST by okie01 (THE MAINSTREAM MEDIA: Ignorance On Parade)
[ Post Reply | Private Reply | To 22 | View Replies ]


To: okie01
If you still want to blame Big Oil, recognize that they're only acting in their stockholders' best interests.

Where did I blame Big Oil? I'll tell you ----- NO WHERE.

25 posted on 02/14/2012 3:23:10 PM PST by Gabz (Democrats for Voldemort.)
[ Post Reply | Private Reply | To 24 | View Replies ]

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