Closing Philadelphia-area refineries will make gas prices volatile

Two idled Delaware County refineries and a third in Philadelphia threatened with closure make up 50 percent of the East Coast’s oil refining capacity. Congressman Pat Meehan chaired a hearing today on the fate of the three troubled refineries.

Experts at the hearing in Delaware County were tentative in their predictions on what closing the money-losing refineries will mean for gas prices.

Congressman Meehan emphasizes there are tens of thousands of jobs directly or indirectly tied to the plants.

“The decisions that are being made in theory have real-time implications to this community. because people are making decisions today based on their assessments of the overall market. and those decisions impact people’s lives, people’s jobs in this community,” Meehan argued.Meehan has concerns about whether the East Coast will continue to get the fuel it requires. Howard Gruenspecht, acting head of the Energy Information Administration, the research arm of the U.S. Department of Energy says importing fuel from further away can push up prices, but that markets are dynamic and can move to meet demand.

“I think it will move here if the price is right. I don’t know right for who, right for the suppliers or right for the consumers, which tend to have different perspectives on this,” Gruenspecht noted.Gruenspecht says the closures could make gas prices on the East Coast more unpredictable. He says regions of Pennsylvania and Western New York that have gotten their fuel pumped straight from the refineries will have the biggest obstacles to overcome.

“There can be localized shortages and when you get localized shortages you get localized price spikes. but we’re not smart enough to project when those might occur, if they might occur or where they might be,” Gruenspecht said.

To compensate for the drop in locally refined fuel, Gruenspecht stated that the East could bring more refined product from the Midwest, Gulf Coast, or from Europe.