Phila Refineries closure will cause shortfall in NE Energy

Here we go!

With gasoline, however, the Northeast would be short 160,000 barrels per day this year and 240,000 barrels per day next year if the refineries shut.

The Philadelphia media have been covering the closing of the last refineries in the Philadelphia region.No one else. An EPA report yesterday blandly tells us that we are in for a shortfall and dire effects. In an interview this morning with the Mayor of Eddystone, where one Sunoco refinery is located, he put the blame directly on the EPA. Sunoco has been mandated to install a $200 million dollar scrubber as well as other improvements to comply with new Regs. This is a well written piece by the Delaware County Times reporter, and I encourage everyone to read the whole thing to understand what our government is doing to us. Earlier I did a post on the U.S. refinery business and if time, check out Philadelphia Refineries coming to an end which included what they are doing elsewhere.

“It’s going to be an economic hit to our region,” he said of the closure of the ConocoPhillips Trainer and Sunoco Inc.’s Marcus Hook and Philadelphia refineries. “The question is: ‘What’s the scope of it and what’s the duration?’”

The U.S. Energy Information Administration warned of price spikes in its full analysis of the refinery closure impact released Monday and U.S. Rep. Patrick Meehan, R-7, of Upper Darby said questions it raises can be used during a congressional hearing in three weeks.

“A higher-price environment could persist for months, if not longer, until infrastructure changes can be made,” the report read. “Replacing lost volumes presents a challenge in terms of both logistics and alternate supply sources, but the challenge posed by logistics is significantly greater.”

With gasoline, however, the Northeast would be short 160,000 barrels per day this year and 240,000 barrels per day next year if the refineries shut.

Potential pipelines serving the region are at near capacity now and tankers would need Jones Act waivers to allow them to serve the region as the few with that designation are already contracted.

The EIA released the 27-page report entitled “Potential Impacts of Reductions in Refinery Activity on Northeast Petroleum Product Markets,” stating that price volatility would be linked more to delivery of supply than unavailability of product. EIA GOV Report

“A higher-price environment could persist for months, if not longer, until infrastructure changes can be made,” the report read. “Replacing lost volumes presents a challenge in terms of both logistics and alternate supply sources, but the challenge posed by logistics is significantly greater.” Full story at Delco Times