Shipping crude oil from the Gulf Coast to California, a distance of just over 500 miles, takes weeks due to a severe lack of ground infrastructure, resulting in the black gold being carried via tanker through the Panama Canal.
Even worse for California refiners, due to the Merchant Marine Act of 1920, also know as the Jones Act, the cost to carry American crude by sea is 10 times more expensive than the current market rate. California currently imports 24% of its crude from Saudi Arabia and another 13% from Iraq. With a glut of crude oil in America's heartland, who is profiting from the Jones Act and shouldn't Congress make a temporary compromise to ween ourselves off OPEC crude?
This segment is from Thursday's edition of "Digging for Value," in which sector analysts Joel South and Taylor Muckerman discuss energy and materials news with host Alison Southwick. The twice-weekly show can be viewed on Tuesdays and Thursdays. It can also be found on Twitter, along with our extended coverage of the energy and materials sectors, @TMFEnergy.