If you’ve taken a look lately at retail gasoline prices across the U.S. it’s not terribly surprising to see high-tax states like New York and California with the most expensive gasoline in the country. But which states are paying the least?
Wyoming. Montana. New Mexico. Utah. Colorado. Idaho. While these states have lower fuel taxes than many others, they are also among those with access to cheaper Canadian crude oil which sells at a discount to West Texas Intermediate.
Canadian crude can greatly benefit coastal cities –if there was a way to get it there. Particularly in the northeast, refineries have struggled in recent years and capacity is further reduced with the latest closing of the Hess facility in Port Reading, NJ. They are adversely impacted by exclusion from lower cost crudes and reliance on higher-priced Brent oil. That’s why Sunoco recently closed its Marcus Hook, PA refinery and sold its 330,000 bpd refinery in Philadelphia.
While the U.S. gains from cheaper oil out of the Bakken oil fields of N. Dakota and Canada’s Alberta oil sands, east and west coast refineries cannot access it. Ironically, the president’s stalling on approval for the Keystone Pipeline has given TransCanada Corp. time to plan a 3,000 mile pipeline east, to the Atlantic Coast where the Canadian crude can be taken by tankers to the Gulf of Mexico; its targeted destination.
The eastern pipeline is among $22 billion in projects TransCanada has proposed or under construction, Bloomberg reported last week. CEO Russ Girling said the eastern pipeline would move as much as 900,000 bpd of western Canadian and U.S. crude to eastern refineries. He said, “Production from the oil sands and U.S. sources is expected to grow a couple million barrels a day which means that we need, as an industry, probably three Keystones to get that oil to market.”
It’s important to note here that the only Keystone pipeline for which Girling has requested approval from President Obama, does not require one dollar of U.S. taxpayer money. Rigid adherence to the green energy orthodoxy may have served a purpose before November’s election but today it’s simply counter-productive to the president’s economic agenda, and inappropriate especially since the environmental protection argument has been nullified by Nebraska’s approval of a route change that takes the pipeline away from sensitive areas.
If you were hoping last night that the State of the Union address would offer an actual energy plan, or at least an indication of whether the president is closer to approving the Keystone pipeline, you’re undoubtedly disappointed today.
The president said his administration will “keep cutting red tape and speeding up new oil and gas permits.
“…But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.
Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good.”
Is that really where federal revenue should go? Haven’t we already seen what happens when the Dept. of Energy “doubles-down” with federally guaranteed loans on risky, green energy plays? Let’s have a vote on that too.
This post was originally published on February 21, 2013.
Business Insider Emails & Alerts
Site highlights each day to your inbox.