US Exports Record Gasoline and Diesel WTF
- From: "Bugman" <jmposing@xxxxxxxxxxx>
- Date: Tue, 12 Aug 2008 18:00:07 -0500
While the U.S. oil industry wants access to more federal lands to help
reduce reliance on foreign suppliers, U.S.-based companies are shipping
record amounts of gasoline and diesel fuel to other countries.
A record 1.6 million barrels a day in U.S. refined petroleum products were
exported during the first four months of this year, up 33 percent from 1.2
million barrels a day over the same period in 2007. Shipments this February
topped 1.8 million barrels a day for the first time during any month,
according to final numbers from the Energy Department.
The surge in exports appears to contradict the pleas from the U.S. oil
industry and the Bush administration for Congress to open more offshore
waters and Alaska's Arctic National Wildlife Refuge to drilling.
"We can help alleviate shortages by drilling for oil and gas in our own
country," President Bush told reporters this week. "We have got the
opportunity to find more crude oil here at home."
"As a nation, we can have more control over our energy destiny by supplying
more of the oil and natural gas we'll be consuming from resources here at
home," Red Cavaney, president of the American Petroleum Institute, said in a
letter last week to U.S. lawmakers.
But environmentalists and other opponents to expanding drilling areas could
seize on the record exports to argue Congress should not open more acres if
U.S. refineries are churning crude oil into petroleum products that are sent
out of the American market.
"It doesn't look good to say: 'We need more oil.' But then export the
refined products that you're getting. It doesn't seem to be consistent,"
said Jim Presswood, energy lobbyist for the Natural Resources Defense
Council.
But many energy experts say oil and petroleum products are traded globally,
and it may make economic sense to export gasoline refined along the U.S.
Gulf Coast to Latin America and import European-refined gasoline to U.S.
East Coast markets.
"The fact is that the (United States) participates in global markets for
both crude and refined products, and there are any number of variables that
impact supply and prices in those markets," said Bill Holbrook, spokesman
for the National Petrochemicals and Refiners Association.
The White House said it was against requiring U.S. oil products to stay at
home.
"Forbidding exports of U.S. petroleum reduces the incentive for domestic
suppliers to produce, and could potentially lead to higher prices if U.S.
production or refining declined," said White House spokesman Scott Stanzel.
The 1.6 million barrels a day in record petroleum exports represented 9
percent of total U.S. refining capacity of 17.6 million barrels a day.
However, with refiners operating at 85 percent of capacity during the
January-April period, the shipments represented a much a larger share of
total U.S. oil products produced.
The exports were also equal to half the 3.2 million barrels of gasoline,
diesel fuel and other petroleum products the United States imported each day
over the 4-month period.
The biggest share of U.S. oil products exported went to Mexico, Canada,
Chile, Singapore and Brazil.
U.S. consumers are paying record prices for gasoline and diesel fuel, which
the Bush administration blames in part on tight supplies.
While the administration argues that more supplies would help to bring down
prices, U.S exports of diesel fuel in April averaged 387,000 barrels per
day, up almost seven-fold from 59,000 barrels a day in the same month a year
earlier.
U.S. gasoline shipments in April averaged 202,000 barrels a day, the most
for the month since 1945, when America was sending fuel overseas to ease
supply shortages in other countries during World War II. Gasoline exports in
April 2007 were almost half at 116,000 barrels per day.
Residual fuel exports in April were 377,000 barrels per day, the fourth
highest level for any month, and up 10 percent from 344,000 barrels per day
a year earlier.
John Felmy, the chief economist at the American Petroleum Institute, said a
portion of the oil products exported, especially diesel, was fuel that did
not meet U.S. clean air requirements and therefore could not be sold in
America. "You may have some that you're not able to use," he said.
Also, while U.S. gasoline demand is down due to high prices and a weak
American economy, there is "strong economic growth outside the United
States" where fuel is often subsidized and demand is high, said John Cook,
director of EIA's Petroleum Division.
However, both the EIA and API admitted they did not know why daily U.S.
gasoline exports to Canada skyrocketed to 41,000 barrels in January-April
this year from 9,000 barrels in 2007.
The EIA said more U.S. diesel is going to Latin American to fuel power
plants because of a shortage of natural gas in the region, and China has
switched to diesel from coal to run some of its generating facilities in
order to reduce smog.
.
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