US Environmental Protection Agency regulation of refineries’ greenhouse gas (GHG) emissions could drive many US refiners out of business by placing them at a significant disadvantage to foreign gasoline, diesel fuel, and jet fuel suppliers, National Petrochemical & Refiners Association Pres. Charles T. Drevna said on March 4, 2011.
One can move gasoline around the globe just as easily as oil.
“Our nation’s petroleum refineries remain one of the last internationally competitive segments of the American manufacturing base,” he said in a letter to Gina McCarthy, EPA’s assistant administrator for air and radiation, which NPRA submitted to accompany its oral testimony at the agency’s listening session on its effort to implement GHG regulations under the Clean Air Act. EPA has said that it formulated the regulations in response to a 2007 US Supreme Court decision saying that it had the authority and obligation to do so.
It's just a matter of time before we will be buying gasoline from China to fuel our Chinese-made automobiles.
It will be interesting to see how our representatives and senators handle this one. If price of gasoline was inexpensive and heading down, it would be one thing, but with gasoline expensive and trending up, it will be interesting to see how the votes go.
I lost interest in these political battles a long time ago but I assume some readers will be interested in the story. With regard to refineries, I don't have a dog in that fight. However, with regard to ocean-going tankers, I do have a dog in that fight.
So the scenario is that US refineries close, US imports refined fuels and exports US crude (to where?) ? Makes sense to me.
ReplyDeleteSome of "our" biggest refineries have been offshore in the Caribbean.
ReplyDeleteI'm being very cynical here, but the facts are we could ship our crude to refineries in Canada, Mexico, Europe, China, and then import the gasoline.
The big losers will be the American consumer if EPA goes through with their regulatory plans. Smaller refiners will be the next in line to take a big loss (many will just close; jobs lost). Larger refiners (if they can stay in business) will just pass the increased cost to consumers.
We've pretty much been doing that with our other commodities. Again, I'm being very cynical here.
However, from an investing point of view, there are many ramifications.