Friday, March 21, 2014

Keystone XL oil exports will only Raise the Price of Gas at the Pump

While it's not often mentioned, the Keystone XL Pipeline is all about exporting energy. It's also not mentioned ever how Midwest prices will increase when supplies are diverted away from our refiners. The price impact is small, but still....

So opposing the XL Pipeline for environmental and economic reasons makes sense. Add to it the following opinion poll about exporting oil to reduce gas prices at the pump. Even one refiner is finally being honest, claiming pump prices will go up if exports are allowed.  
jsonline: The number of Americans who believe U.S. oil should be kept on U.S. soil to lower gasoline prices rose in the last four months, according to a new Reuters/Ipsos poll. A majority of respondents polled in March — 71% — opposed oil exports if they raise the price of gasoline, up from 67% in November.

The price of U.S. gasoline is set in a global market because the United States already exports nearly 5% of the gasoline it produces … the price of gasoline hovered near $3.35 a gallon in February, despite the explosive growth in the nation's oil production.
The oil industry wants us to believe the following:
U.S. exports would add to global supplies and lower the price of international oil benchmark Brent, some analysts argue. That may in turn result in lower gasoline prices across America. Patrick Hughes, an analyst with Height Securities in Washington, D.C. (said)…"But we're not expecting dramatic reductions in price, it will be a low percentage change," he added.
Refiners Opposed: I’m going to side with the refiner’s argument below, which states producers don’t give a damn about lower gas prices at the pump:
However, independent refiners such as Valero Energy, the first refiner to publicly oppose easing the restrictions, say this argument is flawed. "The whole reason producers support unlimited exports is because they're seeking a higher price for their oil," said Bill Day, a Valero spokesman.

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