Where in the World Is Our Gasoline Disappearing to?

Despite producing more oil than we have in decades, prices at the pump aren't budging. The culprit? We've been increasing the amount of our gasoline that is being exported. While this is great for the profit margins of refiners, it's not so wonderful for our wallets.

We've actually been a net exporter of gasoline since 2009. Overall, our exports of finished gasoline products have grown at a compound annual growth rate of 15.7% since 2000. However, as we've used less gas domestically over the last few years, our export growth has shifted into high gear and since 2010 that annual growth rate has jumped to 35.4%. 

To put some numbers behind this trend, this past January we exported 16.981 million barrels of finished gasoline products. When you compare this to the 6.841 million barrels in January 2010, and the 3.936 million barrels in January 2000, you can see just how phenomenal our export growth has become.

One of the driving forces behind this export push is that gasoline demand has been dropping here in the U.S. We're simply not driving as much as we used to, which is creating what appears to be a structural shift in our demand. However, this has quickly been displaced by increased demand for gasoline outside our borders. The market is simply selling gas to the highest bidder, which you will see is an unlikely buyer.

Traditionally, a bulk of our finished gasoline products had been shipped to Mexico. Since January 2000, 66.8% of all finished gasoline exports went just south of the border. However, Mexico has been pulling back lately and now represents only 32% of exports as of January 2013.

Picking up the slack is none other than Venezuela. The OPEC country had been a virtual non-entity in our export market until December 2011. This January it accounted for 20.6% of all exported finished gasoline product exports, which is up from 15.9% in December 2012. It's also well above the 2% total it had been importing going back all the way to 2000.

Here's why this could make your blood begin to boil. The Venezuelan government subsidizes its citizens' gasoline so that that average price of gas is just $0.18 cents a gallon. I don't know about you, but I no longer give much thought when gasoline prices fluctuate that much in one day. Worse yet, our government, on average, taxes us at twice that rate per gallon.

Those exports are one of the reasons why, as you can see by the map below, you're still paying a pretty penny every time you fill up at the gas station. 

It remains to be seen how long Venezuela will keep up its import pace. One of the main reasons for its increased demand is that the country is having problems keeping its refiners running at full capacity. While it's possible that Venezuelan demand will slack off as it gets its refiners back on line, the country's oil minister denies that it even imports gas, suggesting that the structural issues could run much deeper.

As the Venezuelan government subsidizes our continued pain at the pump, it has enabled several of our refiners to cash in, at least for now. Topping the list is Valero (NYSE: VLO  ) which represents about 20%-25% of total U.S. petroleum product exports. Another big winner is Philips 66 (NYSE: PSX  ) which boosted its exports by 50% in the fourth quarter. Meanwhile other refiners like Tesoro (NYSE: TSO  ) and HollyFrontier (NYSE: HFC  ) are both enjoying the highest margins they've seen in years.

However, those margins could be on the way down. The EPA recently proposed new rules that some view as a potential death sentence for refining profits and the elimination of any hope that we'll see gas prices drop. The new rules would significantly reduce the sulfur, nitrogen oxide, and benzene content in gasoline and bring it up to California and European standards. It would cost refiners billions to bring the gas up to those standards. That's why both California and Europe have much higher gas prices than the majority of the U.S., and it would undoubtedly mean even higher future prices as more of our gas disappears overseas in an effort to get around these new rules. 

If there is one silver lining, it is that this could force us to finally allow natural gas to change the fuel industry. Clean Energy Fuels (NASDAQ: CLNE  ) is already working hard to build out America's Natural Gas Highway. As gas prices stay elevated and new rules come into play it could entice more heavy users to switch to cleaner-burning natural gas. While we wouldn't be paying the mere pennies that Venezuelans pay to fill up, natural gas fuel is selling at a significant discount to gasoline which would still yield huge savings. Though, as the debate over natural gas exports heat up, even natural gas could begin to do its own disappearing act. 

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Read/Post Comments (73) | Recommend This Article (47)

Comments from our Foolish Readers

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  • Report this Comment On April 09, 2013, at 9:50 AM, KMartinGardner wrote:

    Well, duh. Experts have been trying to tell us for years that the "drill baby drill" motto is stupid because no matter where the oil is produced, it goes where the oil companies need it to go according to their distribution rules of profitability. If people would stop for just a minute and do their research, you see this worldwide. Hello, it's a GLOBAL economy.

  • Report this Comment On April 09, 2013, at 9:52 AM, mcq1956 wrote:

    I`m 57 years old and I can barely remember 25 cents a gallon here. If the Federal government was`nt owned by the rich, something could be done about the situation outlined in this news article.

  • Report this Comment On April 09, 2013, at 9:55 AM, mpapile wrote:

    Yes there is always this false sense that if the USA stepped up domestic production, prices here will plummet. This is not true. If a producer can make 1 cent more a gallon exporting it you better bet they will. The benefit though is that this money is in our pockets and the increased global supply will drop prices very slightly.

  • Report this Comment On April 09, 2013, at 9:56 AM, Dadw5boys wrote:

    all that dirty oil from Canada will go straight to china and the trash refined out of it will be left in the USA !

    From the Export Tax Free Zone in Texas the USA will reap no benifits from the pipeline but assume all the risk to it's water supplys in many areas of the Nation. Why not refine that Oil in Canada ?

    Put the nasty waste products back into the ground where the tar sands came from ?

  • Report this Comment On April 09, 2013, at 10:00 AM, Dadw5boys wrote:

    when the Natural Resources of the USA are used up and little in the way of payment has been collected what will the American People do? for New Technology Research ? to find replacements for those resources ?

    What will our kids be left with a Desert Nation empty and bare ?

  • Report this Comment On April 09, 2013, at 10:10 AM, coneotplussize wrote:

    Don't know about everybody else but I'm not driving as much because gas costs so much.

  • Report this Comment On April 09, 2013, at 10:48 AM, lghtning38 wrote:

    wanna see gas prices go down?

    1st: allow for there to be more production plants built

    2: take oil and gas off the futures markets, only those that take actual delivery will be allowed to bid and 100% payable by the end of the business day

    3: allow more drilling on federal and private lands and off-shore

    4: take that BS "summer blends" off

    5: do away with hundreds of octane ratings around the country, cars don't need super duper unleaded, most regular cars run well on regular unleaded. there is only a couple of cents between regular unleaded and super unleadedc but companies charge you between 25 and 50 cents for each upgrade

  • Report this Comment On April 09, 2013, at 10:53 AM, woody3shoes wrote:

    I worked as a builder and solar installer for 42 years and also owned countless cars and trucks. Europeans pay a whole lot more for fuels than we do because they knew from the start that they HAD to import it. Venezuela on the other hand is just stupid and I doubt their subsidy is sustainable at all. We're all adult capitalists here, so why on earth would any corporation (traded on NYSE) want to sell me $2 gasoline? Horizontal drilling has changed things, but it is extremely expensive. High demand, finite resource. Get used to it I say.

  • Report this Comment On April 09, 2013, at 11:00 AM, Taxman44035 wrote:

    Hello!?!? Is everybody missing the joke? Venezuela is a communist/socialist country that has one of best oil fields in the world! And they can't produce enough gas for their own people??? Please tell me why we are hurrying down that path as fast as we can???

  • Report this Comment On April 09, 2013, at 11:11 AM, mcbrayerja wrote:

    We buy a lot of our imported oil from Venezuela, process/refine it and send it back at a profit. Americans get good jobs. US corporations make a profit, pay taxes and send dividends to Americans and American institutions like pension funds.

    Tell me what is wrong with this scenario?

  • Report this Comment On April 09, 2013, at 11:12 AM, fedupwithit wrote:

    Wow, what an incredibly stupid premise - Our Gasoline??? When did it become ours? Since a good part of it is made from crude oil imported into the US, what would happen if the countries where the oil came from said "you can't have OUR OIL". Then let's add on top of that the question of how it become "our gasoline" when it's actually owned by the companies that refined it. To the best of my knowledge, the US hasn't become a communist state (at least not yet) where the means of production is owned by the state. So how in the hell does gasoline refined here become "our gasoline"? I get it that people don't like paying $3.50 or more for a gallon of gas, but they're willing to pay Starbucks $5 for a foo foo latte and tip the counter guys a buck. Go figure. The reason why the US is exporting gasoline now is that consumption in the US dropped as a result of the slowing economy. Gee, we could shut down some refineries and make the economy worse or we could keep them running and export the gasoline we aren't currently consuming. Pick which one you think is better. (And if you say that we should keep the gasoline here and have the refiners sell it at a loss so they can go out of business - you fail.) Get a clue people - Oil and gasoline are commodities. Mostly it's supply and demand that affect price. Yes, there is an impact from speculators (the commodity trading people) who are the true parasites since they don't add anything tangible to the equation. Nobody likes high prices but making stupid statements and suggesting even more stupid solutions doesn't correct the basic situation of supply and demand. Oh, and I wish that Motley Fool would start thinking before it posts really stupid articles, but they're probably looking for people to follow them rather than trying to actually inform the investing public.

  • Report this Comment On April 09, 2013, at 11:27 AM, prelude1six wrote:

    So... New Mexico is on the gulf coast? I've been living here and havn't seen as much water in the whole state than I've seen in one lake in Floridia. And as far as the oil goes, we can sit here and gripe all day but when this day is over who has actually tried to do anything about it?

  • Report this Comment On April 09, 2013, at 11:43 AM, cityperson wrote:

    Fuel is for a world economy and the needs, and the private companies profits. This no one can stop no matter how much you drill. Just like the US food exports.

  • Report this Comment On April 09, 2013, at 12:00 PM, trapper82501 wrote:

    even for conserving we are being charged more.

    If they build a pipeline from canada to texas that fuel will be shipped overseas rather than be used to lower our prices. Remember april 15 is buy no gasoline day , it will be a billion dollar one day hit to the oil companies wallets , they might wake up if not step two will be to target one of the biggie like exon or shell & tottally quit buying from them till they drop prices & the other will follow suit , it's up to you do you really want to have affordable gas prices or fill the wallets of the freedy oil companies wallets.

  • Report this Comment On April 09, 2013, at 12:11 PM, carajo53 wrote:

    we Americans are stupid, they used to blame bush and cheney, now obama is the president , the communist-media , always blames republicans. well communist-media you blame bush when he was the president , now blame communist obama he is the president,

  • Report this Comment On April 09, 2013, at 12:17 PM, olafaux wrote:

    This is our take:

    Economists & others can give all the academic reasons for HIGH Gas prices right here. Most of us are NOT interested & are NOT educated in understanding these curves. We demand Gas Prices to PLUNG immediately. PERIOD. The GREEDY Rich better be ware. We are Sick & Tired of "American GREEEEEED!

    God bless America!

  • Report this Comment On April 09, 2013, at 1:14 PM, harviele wrote:

    We should ban all exports of gasoline products until the price of gas at home is brought down to under $1.50 a gallon. Then we should watch the refineries to make sure they don't stop producing in order to escalate prices. But this won't happen because the money hungry republicans will make sure it doesn't.

  • Report this Comment On April 09, 2013, at 1:42 PM, jimobrokta wrote:

    It is strange that many of those same people in the US who think that this gasoline belongs to us also oppose anything that implies that our nation should develop more socialism. The only way for "us" to keep "our" gasoline would be for the government to severely restrict the free market and/or take over the petrol companies. Then they could distribute that fuel to whoever they wanted rather than letting the free market decide.

    I would not advocate for that, btw. Americans also gripe about the fact that we have trade deficits to much of the world. Well, our sale of finished gasoline products helps to fund our purchases of all of those other things that we buy from the rest of the world. So by limiting our own exports we would be choosing to also limit our imports. Some people might see that as a positive as well, but it is really only a positive if you want every American to have less wealth in the future than we currently have now. Trade makes us wealthier, and exports are an important part of that.

    As for the cost of gas in Venezuela, that is irrelevent to the story. Their government (socialist) does buy gasoline made in the USA and they distribute it to their people at cheap prices. But they are paying our companies full price for it. And if we refused to do business with the Venezuelans then businesses in other nations would be just as happy to pay essentially the same price for finished gasoline produced in America, and our prices at the pump would still be the same.

  • Report this Comment On April 09, 2013, at 2:04 PM, Swiftclaws wrote:

    Harviele, that is the best idea I've seen on here. And I'm with you, keep the oil in the US, refine it in the US, AND sell it in the US, PERIOD!

    But, then It would be harder to sell the hybrid and electric cars.

    Either way It's always the consumer that gets the short end of the stick.

  • Report this Comment On April 09, 2013, at 2:38 PM, CaptainParker wrote:

    Can you explain to me one more time why it is so important to build the Keystone pipeline through the United States? No wonder why people scorn me when I say we should build more refineries in more parts of the country so the product doesn't have to be double and triple handled. This article confirms my suspicions on the reason for the push to build the pipeline. The highest bidder will win again and We the people will be left footing the bill.

  • Report this Comment On April 09, 2013, at 2:38 PM, crackcracker wrote:

    The United States has enough domestic oil deposits to refine and produce gasoline to meet current demands without importing one drop of gas from the Middle East.

    What's stopping the US Government from setting up it's own refining and drilling operations, create thousands of jobs, and deliver gasoline to US Citizens?.

    The government already owns car companies (GM) and housing finance companies (Fannie Freddie)?

    That's not Communism or else the government would not own car manufacturing companies and housing finance companies.

    Let independent gasoline exporters continue their sales ... just not on the American's dime.

    Let's see Venezuela and Mexico adjust their pump prices.

  • Report this Comment On April 09, 2013, at 2:51 PM, AllahWishes wrote:

    Oil co's are only patriotic when they want us to go to war for their benefit. Then they'll launch a thousand parades but later they quietly rig the price.

  • Report this Comment On April 09, 2013, at 3:50 PM, mrspaceman007 wrote:

    Typical media misleading and sensationalizing!

    16 Million barrels pales in comparison to the 3.19 Billion barrels consumed by Americans in 2011 (or 8.74 Million barrels per day). Why don't you guys tell the whole story?

    ref: http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10

  • Report this Comment On April 09, 2013, at 3:56 PM, Bond00795403 wrote:

    Just like every corporation. They are going to sell it to make the big profits. Same thing will happen to water soon, just wait. Problem is, the shortage will happen at the same time.

  • Report this Comment On April 09, 2013, at 4:16 PM, luckyagain wrote:

    "The Venezuelan government subsidizes its citizens' gasoline so that that average price of gas is just $0.18 cents a gallon. I don't know about you, but I no longer give much thought when gasoline prices fluctuate that much in one day. "

    S O W H A T !!!!!!

    This is capitalism at work. So is it surprising that someone else is willing to buy the gasoline made in US refineries?

    I guess this put to death the lie about the US gasoline prices being high due to no new refineries being built.

    Take a course in economics and capitalism.

  • Report this Comment On April 09, 2013, at 4:23 PM, FoolishMark2855 wrote:

    Why can't the government use our tax dollars to go into the refining industry themselves? We seem to have plenty of oil here, but also have private refiners of the oil that would sell it to us for as much as they can possibly get for it. That is good business, but is it good for our country?

  • Report this Comment On April 09, 2013, at 4:44 PM, sdchanman wrote:

    Bahhahahhaha Suckers......

  • Report this Comment On April 09, 2013, at 5:02 PM, terterh wrote:

    Wow lots of misinformation in this, 1st we import a lot of crude oil from Venzuela and other countries and export a lot of refined products such as gasoline. This is very good for our economy. It also of a benefit to our economy and national security that we are drilling more of our own oil.

    People tend to complain about the price of gas, but forget about the high paying jobs that the domestic oil boom has produced. A second benefit is that it helps even out the trade imbalance.

    Better gas milage and better utilization of alternative fuels will in time make up for the increase in gas prices. But right now we are on the right track, and nobody is indeservedly getting "rich" at the American consumers expense.

  • Report this Comment On April 09, 2013, at 6:43 PM, paulc2013 wrote:

    GIVE ME A BREAK!

    Specialized refined products made in the US and exported are NOTHING NEW and nothing to be alarmed about.

    OUTRAGED BY refined EXPORTS to Venezuela? Why? We get crude from there.

    The writer jumps to A LOT of conclusions based on the way that HE views the world which has ZERO relationship to reality.

  • Report this Comment On April 09, 2013, at 7:19 PM, quasimodo007 wrote:

    The GREAT American RIP OFF from the GREEDY USA mafia OIL corporation and so CEO's can huge Bonuses. I amazing when all the refineries shut down for repairs all at the same time .

    GREED and Corruption and RIP OFF is their True Motto.

    these Crooks still get Huge Billions dollars TAX Breaks from the evil Polluters koch brothers and their bought and paid for TEa party an Polluters GOP congress and their mafia style Privilege Crooks of Wall street.

  • Report this Comment On April 09, 2013, at 8:01 PM, andolini11 wrote:

    Where in the world is Carmen San Diego?

  • Report this Comment On April 09, 2013, at 8:12 PM, alparadise wrote:

    I can't understand why we're not just keeping this stuff in the ground, and importing all of our oil. Soon enough this stuff is going to run out, and if we've exported all of our stash, they we're really screwed. In oil, energy independence is a marketing ploy and political bull sandwich. Looks like Texas and the Oil Fatboys are screwing us all again.

  • Report this Comment On April 09, 2013, at 9:17 PM, dan554 wrote:

    Is it time to reverse privatization. There are vital products and utilities everyone needs. The Regan era push to privatize these things has not lead to cheaper, better anything as we can see. Renationalize the things everyone needs. Power fuel water and waste removal services. It was a huge mistake like much of what has come of deregulation and privatization. It made a very few very very rich is all. Trickle down was more of a trick and a beat down than anything. Greet is simply greet and not good for you or me. Time we look at who brings these thing to us as good ideas.

  • Report this Comment On April 09, 2013, at 9:34 PM, demo7739 wrote:

    You got to be kidding me. How can a reputable site post such a stupid article. First, the only refineries making money are inland refineries since they have access to WTI priced crudes which are $20 cheaper than Brent based crudes (due to lack of pipelines). However, the price of gasoline does not go down since gasoline has to be imported from Gulf refineries where the feedstock is more expensive. And as is always the case with any commodity in a capitalist system, the price is set by the cost of the most expensive incremental unit. And there are zero pipelines going from inland refineries to the coasts, so there is no product being exported from inland refineries. Only coastal refineries are exporting and their margins are almost nothing, so their profit margin is contributing next to nothing on the price of gasoline. It is the price of BRENT CRUDE THAT IS SELLING FOR $115/BBL AND IS SET BY THE WORLD MARKET THAT IS CAUSING HIGH GASOLINE PRICES...HOW CAN YOU MISS THIS. Gulf coast refineries have to export gasoline since gasoline demand is so low but diesel demand is high. So they run more barrels through the refineries to supply America's diesel demand and then export the excess gasoline. It is necessary to balance supplies and healthy for the country. If they did not do it, the refineries would just have to run less rate (since we cannot pour gasoline on the ground) and we would have to import more diesel. Argh...how can an economy site have no clue about economics?

  • Report this Comment On April 09, 2013, at 9:40 PM, mikertheriddler wrote:

    Oil is a finite resource. So is water. Energy falls into this category as well. Since the big bang, every element, energy included, is a finite resource in this universe. I don't mean to preach here, but we as humans are losing sight on the 'big picture'. My opinion, freeways would make excellent horse trails.

  • Report this Comment On April 10, 2013, at 9:01 AM, BRANDI200 wrote:

    NOT SURE WHERE THEY ARE GETTING THESE PRICES FROM. I AM IN NORTH PA AND GAS HAS NOT BUDGED FROM 3.74 IN MONTHS!!!!!

  • Report this Comment On April 10, 2013, at 9:18 AM, 5eagles wrote:

    "disappearing to"? How do you expect people to take you seriously with a headline like that?

  • Report this Comment On April 10, 2013, at 9:26 AM, scott959 wrote:

    The U.S. is not yet a net exporter of gasoline. EIA statistics show (http://www.eia.gov/petroleum/supply/monthly/archive/2013/201... that in 2012, we imported 616 thousand barrels per day (MB/D) of motor gasoline blending components and 55 MB/D of finished gasoline, or 671 MB/D of total gasoline imports. We exported 422 MB/D of finished gasoline and 82 MB/D of gasoline blend components for a total gasoline export of 510 MB/D; a net import of 161 MB/D. Since gasoline blending components are easily made into gasoline they must be included in any calculation of the trade balance. Until the U.S. exports more gasoline than we import, we will pay for gasoline on an import parity basis.

  • Report this Comment On April 10, 2013, at 9:27 AM, pharpost wrote:

    I can remember 25 cent/gallon gas, too, but as long as this country votes into congress these holier-than-thou, ideological nut-jobs who care for nothing but making themselves richer and more powerful, this is what we'll get.

    What do you think the Keystone pipeline will do? It's supposed to be built from N. Dakota to the Houston, TX port (the largest oil shipping facility in the country) . . . more and cheaper exporting to other countries!

    More and more, the two politic parties in this country care less and less about the people they represent!

  • Report this Comment On April 10, 2013, at 9:41 AM, JT2442 wrote:

    It's the same with the gas pipe they want to run through the middle of the US. It is only going to take the oil or gas and pump it to the coast so it can be delivered to the highest bidder. We are producing more and using less, shouldn't gas prices still be going down? It should according to basic economics, but because they are only going to keep on our market what the US is going to use, the price will not go down while the rest is shipped elsewhere. So the next time someone tells you we are producing more, we are exporting it.

  • Report this Comment On April 10, 2013, at 9:50 AM, mjuzayin wrote:

    oh sure, the government is gonna blame us now for the hike in gas. they asked us to cut back on our driving, car pool if you can, ride a bike, etc. and we did. and for that, all we get are gas hikes! thanks alot! of course we're exporting more than importing. its that way with everything. i live in a port city and the export terminals are by far more busy than the import side. and then mexico has cut down on THEIR gas usage?? well gee, i wonder why. could it possibly be that half the country lives over HERE NOW???? they will come up with 1000 excuses, one stupid answer, and no solution. business as usual.

  • Report this Comment On April 10, 2013, at 9:51 AM, mjuzayin wrote:

    oh sure, the government is gonna blame us now for the hike in gas. they asked us to cut back on our driving, car pool if you can, ride a bike, etc. and we did. and for that, all we get are gas hikes! thanks alot! of course we're exporting more than importing. its that way with everything. i live in a port city and the export terminals are by far more busy than the import side. and then mexico has cut down on THEIR gas usage?? well gee, i wonder why. could it possibly be that half the country lives over HERE NOW???? they will come up with 1000 excuses, one stupid answer, and no solution. business as usual.

  • Report this Comment On April 10, 2013, at 9:53 AM, mbagrad wrote:

    demo7739 terterh mrspaceman007 and a couple of others here bring up the most relevant points per the referenced article. The 16 million barrel per year export represents slightly more than 0.5% of domestically refined oil production. Before the oil speculation bubble in 2008, the USA was importing refined oil products. After domestic demand dropped due to the oil price bubble and recession, oil refining profit margins dropped dramatically and oil refineries shutdown. Surviving Gulf/East Coast refiners were forced to export some of their products to survive.

  • Report this Comment On April 10, 2013, at 10:04 AM, mbagrad wrote:

    scott959, thanks for doing a more detailed balance using long established EIA government numbers! It shows that this story is unfounded.

    I suspect that the US West Coast is still a net importer, partially due to California's gasoline blend requirement, and the US Gulf/East Coast accounts for the bulk of refined exports....however I haven't checked eia's figures in detail.

  • Report this Comment On April 10, 2013, at 10:06 AM, Duane1957 wrote:

    to say that "The market is simply selling gas to the highest bidder, which you will see is an unlikely buyer." is a little misleading. The demand is simply not in the U.S. to buy the gasoline. So with excess production capacity relative to U.S. demand, the gasoline is produced and exported as long as the price realization on the export is high enough to cover marginal production cost. I also did not see any mention of the impact of the increased use of ethanol domestically on the demand for refinery produced gasoline. So one way to look at it is we are growing corn, making ethanol to create surplus refining capacity which results in gasoline exports.

  • Report this Comment On April 10, 2013, at 10:08 AM, OursBelong2God wrote:

    Regulating the levels of sulfur emissions and other attributes of fuel will have a positive impact on the health of the planet. That being said, If the trade of petroleum products are regulated within the United States, in order to set a responsible example for the global market, then why do we let US oil companies export without meeting similarly responsible domestic standards? Screw profit margins! Profit isn't going to buy us another planet to destroy!

  • Report this Comment On April 10, 2013, at 10:08 AM, Duane1957 wrote:

    "I suspect that the US West Coast is still a net importer, partially due to California's gasoline blend requirement, and the US Gulf/East Coast accounts for the bulk of refined exports....however I haven't checked eia's figures in detail."

    Wrong - California's gasoline demand has fallen by over 10% since 2006, and coupled with increased use of ethanol the refinery gasoline demand for California has fallen by more like 15% resulting in excess gasoline and exports when all refineries are running. The EIA statistics for Padd V show routine gasoline exports.

  • Report this Comment On April 10, 2013, at 10:10 AM, TheMadZak wrote:

    This is why drilling more and building the Keystone pipeline will do nothing to reduce the price of gas at the pump in the US. This is a free market at work, folks. Those same people who call Obama a socialist are blaming him for high gas prices.

  • Report this Comment On April 10, 2013, at 10:11 AM, Duane1957 wrote:

    "It's the same with the gas pipe they want to run through the middle of the US. It is only going to take the oil or gas and pump it to the coast so it can be delivered to the highest bidder."

    Wrong - the Keystone pipeline is a crude oil pipeline

  • Report this Comment On April 10, 2013, at 10:48 AM, mbagrad wrote:

    Thanks for the correction of my assumption, Duane1957. I agree what the impact of ethanol in gasoline is doing, and IMO without any real environmental benefit (possibly an environmental loser).

    http://www.eia.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_...

    shows that over the last couple of months the largest refined net oil exports were distillates like diesel fuel, residual oil (asphalt & bunker fuel for ships) and kerosene or jet fuel.

  • Report this Comment On April 10, 2013, at 10:58 AM, clem13635 wrote:

    keep our oil for us and lower the price so it is affordable. you cant keep giving it away

  • Report this Comment On April 10, 2013, at 11:05 AM, beachinvest wrote:

    People always want to apply different rules to the oil industry. You will not see any "exposes" about Apple selling their products overseas. Why should Exxon be expected to sell all of its refined products domestically if they can earn more overseas?

    As for Venezuela subsidizing their gas prices, this is a long standing practice that will eventually bankrupt the country (along with their other price controls and incentives). If the Venezuelan government wants to buy our refined products at market and sell them at a discount, let 'em.

  • Report this Comment On April 10, 2013, at 11:33 AM, ddkrew wrote:

    I'm pretty sure apple paid taxes last year. Not only am i paying 3.59 / gallon, I also claim some of the millions in tax subsidies given to the oil industry last year. This makes any income taxes paid by those they employ a moot point.

  • Report this Comment On April 10, 2013, at 11:58 AM, Ur2Stupid2live wrote:

    Wow I have seen some terrible comments that show how truly uneducated we are on the subject matter. First off it is our oil the US has more oil and natural gas than Saudi Arabia. When oil is pumped out of PUBLIC land that oil belongs to the american people and should have to stay here. ALSO I saw another comment stating how most of the oil processed in the US is from outside sources I really wouldnt say most BUT besides that the reason it is sent here is because those countries dont have the refining capacity that we do . Saying that they could say they didnt want to ship the oil here is stupid for the fallowing points 1. No one has enough storage capacity(Besides US) to handle the amount of oil that needs to be refined. 2.It takes dacades to bring a refinery online ande up to full speed on top of millions of dollars maybe even billions. They need us as bad as we need them to send it.

    The one smart comment I did see was to take oil off the futures market what an amazing concept we wouldnt see oil prices change 25 to 50 cents in one day . To add to that I would say that oil being produced on public land should have a certain percentage that has to stay in the US. You can call it socialism or whatever I will be always for america first . The Oil market is no longer driven by supply and demand its driven by speculation it really is the fleecing of america

  • Report this Comment On April 10, 2013, at 12:25 PM, SerenferchDafydd wrote:

    This article reminds me of the Mark Twain quote "Figures don't lie but liers will figure."

    According to the US Energy Information Administration website the actual figures are:

    Total Gasoline production plus imports for January 2013 was 1,087,914,000 barrels.

    Total Gasoline exported was 58,652,000 barrels

    Exports as % of total gasoline: 5.4%

    In other words 96.4% of all gasoline available in the USA was used domestically.

    The Fool truly deserves his name.

  • Report this Comment On April 10, 2013, at 12:28 PM, mwanning wrote:

    There is one thing this article missed - by a mile. The refineries in the U.S. were build to refine a certain type of petroleum - I think it is called light sweet crude but not sure. That is what OPEC produces. But in the U.S. most of that is gone. What we are drilling now is a little harder to refine and usually cannot be refined by U.S. refineries. The production of the Alaska pipeline mostly went to Japan because the U.S. could not refine it. U.S. EPA regulations and environmental groups lawsuits prevent anyone from building new refineries in the U.S. The irony is a new refinery would produce less pollution and be more efficient - i.e. getting more gasoline out of a barrel of crude requiring less oil drilling which these groups say they want. A new refinery is better for the environment but the environmental groups want to stop them. So one of the major reasons so much of the U.S. production is exported is WE CANNOT USE IT. Now these exports offset the imports for trade balance etc, so it is not all bad. But the last time I checked some years back, there was a request to build a new refinery in AZ and it was on it 14th year of trying to get permits but kept having to go to court against the Sierra Club and others. 14 year and not one blade of soil turned to start. That is not the record - there is a mining permit that is going on 40 years. And it is mining for minerals used to build solar cells, wind turbines and batteries - now all most all made outside of the U.S. because of lack of minerals.

  • Report this Comment On April 10, 2013, at 12:56 PM, lm1b2 wrote:

    Again as usual our government does nothing,Obama promised to regulate the Commodity Exchange,and hasn't,still putting corn as biofuel into the gas tank,and paying the Oil Companies to do it,driving food prices up,and contributing to worldwide famine.Congress still refuses to force Oil Companies to build Refineries here in the USA,or to do it themselves,which would break there monopoly on gas,The Oil companies are evidently paying Congress a lot more then we are,the thieves are raking it in!In the mean time Congress tells us there is nothing they can do LOL !

  • Report this Comment On April 10, 2013, at 1:12 PM, pharpost wrote:

    A small correction for "mwanning": All refineries are NOT built to handle only light sweet crude. However, light sweet crude is the preferred feed stock over heavier sour crudes because 1) they are easier and cleaner to refine and, 2) heavy sour crudes contain high levels of sulfur that cause much more corrosion and thereby many more equipment shutdowns and much higher maintenance costs.

    West coast refineries prefer and run lighter crudes because they are able to meet the state's strict environmental regulations much easier and cheaper. Many east coast and gulf coast refineries are capable of handling both heavy and light crudes, but they to prefer lighter crudes whenever possible. Most of the mid-country refiners run domestic and/or Canadian crudes, most of which is "intermediate" type crudes.

  • Report this Comment On April 10, 2013, at 1:14 PM, jonny5mo5 wrote:

    The only reason new england's average is so high is because of connecticut...i pay in the low-mid 3.40's in mass..right on the border of CT

  • Report this Comment On April 10, 2013, at 1:16 PM, Duane1957 wrote:

    mwanning - what is your basis for this? "There is one thing this article missed - by a mile. The refineries in the U.S. were build to refine a certain type of petroleum - I think it is called light sweet crude but not sure. That is what OPEC produces. But in the U.S. most of that is gone. What we are drilling now is a little harder to refine and usually cannot be refined by U.S. refineries. The production of the Alaska pipeline mostly went to Japan because the U.S.

    Most of the large refineries in the gulf coast and midwest can handle heavy sour crude, inland refineries still process the light sweet crude (because that is where it is!) OPEC produces a lot of different crudes - Mideast crude is pretty sour and not as light. Nigeria produces very light very sweet crude. The recent production increase in the U.S. from shale oil is very light very sweet crude as well. Most Alaska crude oil stayed on the US west coast. In the 90's some went to the US Gulf coast and very very small volumes were exported.

  • Report this Comment On April 10, 2013, at 1:16 PM, mbagrad wrote:

    "That is what OPEC produces. But in the U.S. most of that is gone. What we are drilling now is a little harder to refine and usually cannot be refined by U.S. refineries. The production of the Alaska pipeline mostly went to Japan because the U.S. could not refine it..... "

    Not true. There were US laws that prevented US crude oil from being exported, which meant that ALL of it, including Alaska North Slope had to be refined in the US. Alaskan crude was mainly refined on the US West Coast, but when production was higher some made its way to the US East/Gulf Coasts. I'm not sure if that law has been repealed or not, but as of about 10 years ago it was still in effect.

    US Oil Refineries have also been modified over the years to process other crude oil blends. When crude oil prices were about $15/bbl (1980's - 1990's), Saudi Arabia and Venezuela invested money in US oil refineries so that they would process THEIR crude oils. That gave them a secure outlet at a slightly better margin, since both nation's crudes sell at a discount vs Brent or WTI (West Texas Intermediate).

  • Report this Comment On April 10, 2013, at 1:19 PM, Duane1957 wrote:

    pharpost "West coast refineries prefer and run lighter crudes because they are able to meet the state's strict environmental regulations much easier and cheaper." - this is an oversimplified picture. Some of the west coast refineries run a very very heavy slate (heavy CA crude is 13-15 api gravity), some run Mideast crude - lighter but more sour, and some in the pacific northwest run Alaskan or similar crude - lighter and less sour

  • Report this Comment On April 10, 2013, at 1:41 PM, mbagrad wrote:

    Good point Duane1957! Some California crudes are among the most difficult to process due being heavy (low API gravity), high sulfur, high nitrogen, and high organic metals content.

    Venezuelan crude on average, like the heavy California crudes, are heavy and require more refinery investment to process profitably. Citgo (owned by the Vens) investment a lot of money in US refineries over the years to be able to process heavy Venezuelan crude oil.

    I'm not a big fan of the Oil Companies, but for the conspiracy (they control oil, gasoline, etc prices) theorists a question: Why did oil drop below $10/bbl in the mid 1980's and stay consistently (on average) below $20/bbl through the 1990's? That doesn't sound like effective price control (maximizing profit) to me.

  • Report this Comment On April 10, 2013, at 2:18 PM, mbagrad wrote:

    Apologies for some grammatical errors in recent posts, but I tend to type fast and I have other things (much like other posters here) going on.

    Bottom line the gasoline or gasoline component export issue as being responsible for higher gasoline prices (the implication for this story) is BOGUS. Some refineries cannot blend certain gasoline components due to EPA mandates. Since they can't use them in their own gasoline blends, they can sell them domestically or on a foreign market. The reason it makes economic sense to ship them farther (typically for export market) is because other US refiners also have the same gasoline blend restrictions. Mexico, Venezuela, etc do not have those same EPA gasoline restrictions, so those gasoline components are more valuable to them.

    We can discuss the implication of various EPA gasoline specification mandates (including ethanol requirements), cost to the consumer, and impact on the environment separately....if there is real interest.

    I'd also like to hear from the Oil Company conspiracy (they control oil and oil product prices to rape the public) supporters, per their explanations for various periods of low oil, gasoline, etc prices in recent history!

  • Report this Comment On April 10, 2013, at 3:36 PM, retiredfire wrote:

    End Gasoline Subsidies NOW!!

  • Report this Comment On April 10, 2013, at 3:50 PM, maverik008 wrote:

    How about some new news. Changing the date on the articles is not news. It is called old crap.

  • Report this Comment On April 10, 2013, at 4:53 PM, mikegrimm79 wrote:

    Ok maybe someone can help me understand something better.. it seems (from what i can remember) that from the time 9/11 occured to the start of the war in Iraq that gas prices slowly rose then spiked and stayed there.. now what im having a hard time with is why this happened?? Yes i understand that in war time the use of gasoline will go up and therefore could drive up costs, but as far as the production of gasoline and refining in the U.S... what changed?? Why are the prices still high? Gas was 0.89 cents when i was in high school back in '97.. I know Clinton dipped into the national reserve to ease prices but for the most part it was around $1.25 till 9/11.. and now we are selling more gasoline and its still this high?? Come on enough is enough... From what I understand its these new additives that are driving up gas prices.. or it could be another way for the government to try to eliminate the middle class to what they are apparently trying to do!

  • Report this Comment On April 10, 2013, at 5:45 PM, mbagrad wrote:

    You said: ",,,what changed??....Gas was 0.89 cents when i was in high school back in '97..."

    It isn't just about US ... the USA. There is an entire WORLD out there, that is doing their own thing, and demanding oil and energy products to develop themselves. Oil prices are set per some semblance of basic supply vs demand on a World market.

    You said: "I know Clinton dipped into the national reserve to ease prices but for the most part it was around $1.25 till 9/11.. and now we are selling more gasoline and its still this high??"

    The national SPR (strategic petroleum reserve) releases by a number of Presidents, in response to oil price increases, have been purely political, psychological and ineffective.

    The SPR (oil stored in massive underground salt domes in Texas and Louisiana) could supply some fraction (maybe +/- 3 million barrels per day) of oil for well under 1 year time frame. The SPR is about providing a reserve to a potential 1973 style Arab oil boycott. It was never designed to be used as a long time market price influence.

    You said: "From what I understand its these new additives that are driving up gas prices.."

    Do you care to document that factoid?

  • Report this Comment On April 10, 2013, at 7:28 PM, oldcheme wrote:

    1) It's not "our" oil, this is a free country with private property ownership. 2) oil from public lands is paid for by producers who bid on blocks of drillable acreage. This practice is not new and is practiced in varying degrees worldwide. 3) what is wrong with using American capital, labor and resources to produce a product (gasoline) for export. Saudi Arabia used to do it and it made them quite a bit of $. (They're actually an importer of gasoline now, although they remain the largest crude exporter.)

  • Report this Comment On April 11, 2013, at 3:17 AM, sgjb wrote:

    It's so comical, what started with Great Britain and The USA log ago to carve up the middle east for the purposes of cheap petroleum, installing a "western friendly" regime in Iran, then putting Saddam in power in Iraq which led us to Saudi Arabi. All for cheap Oil, in which most of the proceeds in those countries went exclusively to the rich families that were in control...Not to the majority of the population...and now we find our government and big oil doing the same with our own oil, not for the good of America but for the good of the rich. Most scoffed when folks pointed out how the US was scheming and plotting in the Middle East and that it wasn't about Oil....You were right..it wasn't about Oil..it was about profits, and the few...It's about how the gap between Upper and middle class has widen so much that they have now coined new phrases to break the top 1 percent into categories such as elites and super rich....All at the expense of not just the middle and the lower class but at the expense of what was once a great nation. Now, Made in America, American Pride, Proud to be An America are punch lines for the Politicians who are bought and paid for by the very people who keep lining their coffers, these people have no loyalty, no patriotism, only money and profit...

  • Report this Comment On April 11, 2013, at 3:58 AM, woody3691 wrote:

    At the fear of being labeled a Communist or worse, a Socialist or liberal, this is laissez-faire capitalism at its finest. I always believed that the natural resources of a country should be owned by that country and the development of those resources be leased out to private industry for profit. But the final disposition of those resources should be determined by the government. Since natural resources are finite and so integral into the welfare of a country, they are too valuable to be left to the whims of for-profit private enterprise.

  • Report this Comment On April 11, 2013, at 7:00 AM, nofoolhereeither wrote:

    The solution: hydrogen power, it is made from water. Even if we have drought we do have oceans. If car makers started making more cars that run on it and gas stations sold it, we wouldn't need the Arabs or Venezuela.

  • Report this Comment On April 12, 2013, at 5:06 PM, oshuneer wrote:

    Let that be a lesson for those who are counting on low NG prices for decades to come. NG demand for NG in China, India and several industrialized nations is expected to double over the next five years.

    As to those who argue that exported gasoline is just a fraction of our national consumption: It only takes a small reduction in supply to trigger a disproportionate rise in pricing.

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