Feds: More Gulf Coast fuel needed to supply Northeast

Larger shipments of gasoline and diesel from the Gulf Coast are needed to offset planned closures of three major refineries in the Northeast, according to a new federal report.

Northeastern states could experience “spot shortages with price hikes” for gasoline and other fuels as the region faces the idling of three critical refineries in Pennsylvania, the U.S. Energy Information Administration concluded in a recent report.

“The Gulf Coast is likely to be a significant alternate supplier,” the report notes, specifying the Colonial Pipeline as a main transport route.

“Even so, pipeline capacity will still be insufficient to make up the entire lost production volume,” the EIA forewarned.

Sunoco announced this month that it will idle operation of its Marcus Hook refinery in Pennsylvania. The announcement came two months after ConocoPhillips decided to take offline its Trainer, Pa. refinery and prepare the facilities, associated pipelines and terminals for sale.

If Sunoco moves forward with plans take its Philadelphia refinery offline, too, the nation’s populous Northeast region will lose half of its total refining capacity, according to the U.S. Energy Information Administration.

The impact on refining capacity and infrastructure could stress the regional supply of gasoline, jet fuel and ultra-low sulfur diesel, the EIA concluded in its report.

The U.S. refining industry, and Northeastern refiners in particular, are suffering from stagnating demand and competition from imports. Northeastern refineries supply 40 percent of the region’s gasoline needs, according to the EIA, with the rest coming from imports or piped in from the Gulf Coast.

As more Northeast refiners go offline — Philadelphia-based Sunoco, the region’s dominant refiner, has announced that it’s getting out of the refining business all together – the Gulf Coast will become and even more important supplier, the report noted.

The Colonial Pipeline, a main artery for transporting gasoline and other refined products from Texas up along the East Coast, is expanding its capacity in part to respond to closed refineries in the Northeast.

Additional supply could come from imports, beefed up production at remaining Northeast refiners and small rail shipments from Midwest refiners, the EIA said.

21 Comments

  1. Paul O.

    And Obama keeps placing roadblocks to offshore drilling and the Keystone pipeline from Canada to the Gulf Coast refineries.

    It’s like he wants to drive the cost of driving and heating our homes up. Oh thats right, thats exactly what he is doing.

    #1
  2. kztoy

    How funny!
    This is what happens when you run ‘em out of business, now the government anticipates supply shortages. Same thing might be happening to the power generators as a result of the new Utility MACT rule. Whodathunk it?

    #2
  3. chiefdecoy

    Enviroweenie’s should be thrilled about this news!
    However, they will probably be the first in line to complain about the high price of gasoline…..

    #3
  4. txloanguy

    Nah, we don’t need a pipeline bringing thousands of gallons of fuel to our refineries. We need to starve in the dark since we won’t be able to afford gas or electricity under Obama’s current energy policies.

    #4
  5. oilman

    Back in the 70′s there was a song on the radio: “Freeze a Yankee, Drive 75, Freeze em Alive!” . Maybe now they won’t be NIMBY about a refinery when they line up for gas…….

    #5
  6. pdh42

    This ought to make all of the hope and change fools real happy…. This way they will be able to pay the higher prices that their fool in chief wants all of us to pay….

    #6
  7. ntangle

    CP isn’t the only p/l that will benefit from this. K-M may benefit too, but indirectly, and to a lesser extent, as it doesn’t go as far north.

    #7
  8. Rancher

    If you voted for obama you should freeze. If you need to get some where ride a bus. That is what you voted for so enjoy.

    #8
  9. Trail_Tramp

    Everybody in the Northeast needs to go out and buy one of those little electric cars like their leader Obama wants them to.

    #9
  10. bob

    I AM LOOKING FORWARD TO OUR TEXAS STYLE ELECTRICITY BROWNOUTS THIS COMING SUMMER AS OUR COMMIE OBAMIE EPA AND DEPT OF ENERGY REGULATIONS FORCE THE CLOSING OF SEVERAL ELECTRIC PLANTS AROUND TEXAS. YOU WILL ENJOY THESE BROWNOUTS FOLKS TRUST ME AND YOUR COMMIE OBAMIE. JUST THINK IF YOU OWN A FACTORY IN TEXAS OR OTHER PARTS OF AMERIKA AND GET BROWNOUTS – LOOK HOW PROFITABLE THAT WILL BE FOR THOSE BUSINESSES. WE SHOULD NOT INCREASE OUR REFINING UNTIL THEY STOP WITH THIS EPA STUFF ON OUR POWER PLANTS.

    OUR COMMIE OBAMIE ADMINISTRATION AND REGULATORS ARE WIPING OUR WHOLE INDUSTRIES. BY 2014 YOU WILL NOT BE ABLE TO BURN WOOD IN YOUR FIREPLACE. OF COURSE THIS WILL WIPE OUT THE FIREPLACE INDUSTRY.

    VOTE FOR RINO REPUBLICAN PROGRESSIVES OR DEMOCRAT COMMIES ONLY FOR BEST COMMUNISM.

    #10
  11. Ed in Texas

    If the northeast states are going to rely on refineries in Texas, Louisianna and Mississippi, and therefore add MORE pollution to our air, then those northern states should be forced to pay the refining states a “clean air mitigation fee”. 25 percent surcharge per gallon should do it.

    #11
  12. hgnis

    That damn Obama only trying to line the pockets of his Big Oil buddies.

    #12
  13. rts

    Demand for refined fuels continues to drop because of more fuel efficient cars, trucks and airplanes. The Boeing 787 uses 20% less fuel and the 737 Max will use 20-22% less. Refiners, already seeing over capacity, see no need to spend the money to refurbish refineries that could be un-needed in 10 or so years. Yet, may require 10-15 years to cover the cost of the repairs and improvements.

    #13
  14. kztoy

    @Ed in Texas
    That is a very valid observation since Texas was included in one of the latest EPA “clean air” rulemaking burdens, the Cross-State Air Pollution Rule, which adversely affects power plants like Luminant in Texas. See http://www.epa.gov/airtransport/basic.html

    Then there is the latest Utility MACT rule that drives home the point that the Obama Administration doesn’t like US utilities: http://www.epa.gov/airquality/powerplanttoxics/actions.html

    These are excellent examples of the hypocrites that sit in elected and appointed positions in Washington, DC, that strive to suck the literal energy out of the US economy. Read the propoganda, each time EPA comes out with one of these MACT rules it talks about saving 10,000+ lives each year as a result of each rulemaking. At some point, after the multitude of oppressive environmental promulgations, there shouldn’t be anyone dying at all?!

    2012 my fellow citizens, is just around the corner.

    #14
  15. chiefdecoy

    And everyone thought Bush and Cheney were in bed with “oil companies”.
    Obama is their new best friend……

    #15
  16. The Czech Man

    The way this will end up, the Northeast will pay less for there gas if the politicians have anything to say about it. Charge them double, especially if they live in Washington D.C. & New York.

    #16
  17. Zexufang

    Let me guess – the compassionate green eco-socialists will refuse any fuel for the winter so as to accomodate their more unfortunate neighbors.

    #17
  18. Reuvil

    So, once they sell it everything is back to normal. And people here are freaking out and calling for Doomsday and the Apocalypse. So if bushy was in office we’d all be bathing in gas and oil lol. Y’all crack me up.

    #18
  19. BookemDano

    If the Refinries in the NE need fuel, ask the gov to make leases off the coast there available. The Gulf Coast can NOT be the Industrial Corridor for the whole nation!

    #19
  20. Ralf

    It doesn’t take a rocket scientist to figure out that less refining capacity equals higher prices. It happened before with all the mega-mergers shuttering refineries. And it will happen again if they shutdown more. This will be devastating for America!

    #20
  21. ntangle

    Good point Request-To-Send. Not only is fuel demand dropping because of higher efficiencies, but it wouldn’t increase anyway as long as the economy is going sideways. There’s still adequate refining capacity, although more pipeline upgrades (in addition to CP) will be needed.

    #21