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As Gas Prices Soar, “Extremely Challenging” Regulations Making Things Worse for Refineries


Mar 20, 2012

Washington
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Gas prices are already rising faster than ever, and now Reuters says the Northeast “may face an unprecedented shortage of gasoline due to the closure of half of regional refineries by mid-year.” Experts tell the Wall Street Journal gas prices “will climb higher” because of these refinery closures.

For decades, American refineries have operated under a mountain of red tape. The Department of Energy released a report in March 2011 that found the costs associated with excessive government regulations had “resulted in the shutdown of 66 refineries from 1990 through 2010.” But instead of addressing this long-term problem, the Obama administration is making things worse.

As one refinery executive put it, the refining industry “faces a regulatory environment that has made supplying fuels ‘extremely challenging.’” New regulations proposed by the Obama administration “could lead to four to seven” more refinery closures. This “would strengthen foreign competitors eager to replace American manufacturers and workers” and “make America more reliant on nations in unstable parts of the world for vital fuels,” says the American Fuel & Petrochemical Manufacturers.

The Obama administration is also penalizing refineries for not using a biofuel that doesn’t exist. The New York Times says refineries paid $6.8 million in penalties in 2011 because “they failed to mix a special type of biofuel into their gasoline and diesel…” But “[o]utside a handful of laboratories and workshops, the ingredient… does not exist.” Instead of working with Congress to fix the problem, the administration upped the requirements, so companies “expect to pay even higher penalties” in 2012.

President Obama even blocked and lobbied against the Keystone XL pipeline, cutting off a new supply of crude oil from the upper Midwest and Canada that would have gone to refineries on the Gulf Coast. But Keystone XL is wildly popular, and that’s why the president is on the road defending his anti-energy policies and touting his rhetorical support for a portion of the pipeline that didn’t require his approval.

House Republicans are working to “streamline the federal regulatory burden on gasoline,” says Energy & Commerce Committee Chairman Fred Upton (R-MI), and “increase domestic and North American oil supplies.” Learn more by “liking” the American Energy Initiative on Facebook and visiting jobs.GOP.gov, and stay tuned for more information on GOP efforts to help address gas prices and create new jobs.

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