Search Results:
-
Why are we shutting down U.S. refineries? Doesn’t that lead to less supply and higher gas prices?
Answer:
Refining is highly competitive. It has also traditionally been a low-profit margin industry faced with a heavy slate of regulations over the decades involving many billions of dollars in environmental investment and compliance costs. Because of these and other factors, some refineries – often after sustained periods of financial losses – have had to shut down. About 75 U.S. refineries have closed since 1985.
As this has happened, however, the remaining larger, more efficient facilities have expanded capacity so that total U.S. refining capacity has actually increased by 13 percent. This has allowed the sector to continue to reliably provide Americans with the fuels they need.
...Read More -
Why do we have so many different blends of gasoline across the country? Would fewer boutique blends mean lower prices?
Answer:
While refineries must make large investments to meet state and federal fuel requirements, eliminating them at this point is unlikely to reduce costs significantly since the investments have already been made. New fuel standard rules could raise the cost of producing fuels, which is why we must ensure that new regulatory proposals are necessary, properly crafted, practical, and fair, allowing U.S. refiners to remain competitive, preserve good-paying refinery jobs, and ensure our energy security.
...Read More -
Why is diesel fuel more expensive than gasoline when it supposedly requires less refining?
Answer:
The diesel fuel we use today is not the same as it was in the past. The investments needed to produce ultra-low-sulfur diesel means it is no longer a simpler refining process. The price of crude oil is the main factor in determining the price of diesel fuel, and fluctuations in the crude oil market may greatly influence changes in diesel prices. Short-run factors that have historically caused divergences from this correlation include supply shortages resulting from refinery outages, transportation issues, adverse weather conditions and pipeline problems. Longer-term factors that have historically been tied to variations in gasoline versus diesel prices include the different seasonal price variations for the two fuels and differing tax rates.
...Read More -
Why are we transporting oil through a pipeline to Gulf Coast refineries? Why not build new refineries closer to the source?
Answer:
It makes sense to transport Canadian crude to the Gulf Coast because the Gulf region is by far the leader in refinery capacity, with more than twice as much crude oil distillation capacity as any other U.S. region. In fact, the Gulf is home to five of the top 20 oil refineries in the world. According to the Energy Information Administration, there is one operating refinery in North Dakota compared to 45 refineries operating in Texas and Louisiana.
...Read More -
Won’t Canadian oil just be exported to other countries after it is refined here? How does that provide the U.S. with any economic benefit?
Answer:
Currently, more than 90 percent of the on-road transportation fuel refined in the United States is used in America. The less than 10 percent of on-road motor fuel that is exported consists primarily of heavier products that aren’t in high demand here. There’s no evidence this ratio will change with increased supplies of oil sands crude.
...Read More -
Won’t most of the Keystone XL pipeline jobs be short-term?
Answer:
The Keystone XL pipeline is the largest shovel-ready project around, but the construction and permanent jobs it would create get little credit from people who oppose the pipeline or the Canadian oil sands crude it would carry. TransCanada has reported that the Keystone XL project will create 20,000 new jobs, and has even broken down that number to account for the welders and clerks that the project requires.
...Read More -
Are oil companies inflating gas prices by not building new refineries?
Answer:
The short answer is ‘no.’ The longer explanation is that—first—oil companies do not set the price of gasoline. Because crude oil is the primary component in gasoline production, the price rises and falls with the cost of crude, which is set by supply and demand on the global commodities market. In addition to economic growth and geopolitical risks, other factors, including weather events, inventories, exchange rates, investments, spare capacity, production decisions, and supply growth, all figure into the price of crude oil and thus—gasoline prices. Gasoline prices can be impacted by government taxes, and taxes add an average 49.5 cents a gallon to the price. Of that, 18.4 cents goes to the federal government; the rest ends up in state and local government coffers. One reason gasoline prices vary by state is because taxes often do.
...Read More
