Without a doubt, the cost of gasoline has been going up across the country, and indeed, much of the developed world. Some areas are suffering worse than others though, and a conflux of coincidences may mean that the East Coast will soon suffer a gasoline shortage that could lead to a severe gas price spike. Rut roh.
CNN reports that nearly half of the oil refining capacity on the East Coast has shut down, or will soon be shut down, due to severe financial losses. Sunoco, which owns the Philidelphia-based Marcus Hook refinery as well as another nearby facility, has been losing about $1 million per day in the refining business for the past three years. ConocoPhillips also plans to shutter the Trainer facility, another Philly-based refining plant. If all three facilities shut down, that leaves just 6 oil refineries operating in the Northeast.
The U.S. has not built an oil refinery in over 30 years, and every year brings more closures, often due to dated equipment. Even so, the U.S. is exporting more gasoline now than at any prior time in history thanks to advancements in refining techniques. Yet many of these older facilities simply can’t process the heavy oil slurry coming from places like the Alberta tar sands.