Closure of US northeast refineries to raise fuel prices – EIA

23 December 2011 22:42  [Source: ICIS news]

HOUSTON (ICIS)--Closure of ConocoPhillips' New Jersey and Sunoco's Pennsylvania refineries will tighten fuel supplies, raise prices and increase market volatility in the US northeast, the US Energy Information Administration (EIA) said on Friday.

The United Steelworkers (USW) union said the analysis was consistent with the group’s views. The union includes refinery and petrochemical union workers.

East coast refineries supplied about 40% of the northeast region’s gasoline sales and 60% of the distillate sales in 2010,  the EIA reported.

“Northeast consumers deserve a stable supply of gasoline, heating oil and diesel without price spikes,” said USW vice president Gary Beevers. “There is definitely money to be made by keeping these three refineries open.”

In early September, Sunoco announced plans to sell its 335,000 bbl/day Philadelphia refinery and its 178,000 bbl/day Marcus Hook refinery with the intent to idle both if they had not been sold in the summer of 2012. On 1 December, Sunoco idled the Marcus Hook refinery because of poor economics.

In late September, ConocoPhillips began the process of idling its 185,000 bbl/day Trainer refinery in Pennsylvania pending the refinery’s sale. The company also shut down associated pipelines and terminals.

The idling of the Marcus Hook refinery in December removed 15% of the operating northeast refinery capacity, according to the EIA.

“The possible permanent closure of these three refineries paints a bleak picture for consumers in the northeast United States,” said USW Local 10-1 President Jim Savage, a worker at Sunoco’s Philadelphia refinery.

The EIA said reduced short-term product supply flexibility because of extended delivery times for imports from other regions and potential bottlenecks in pipelines and on rail could increase price volatility.

By: Sheena Martin
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