"US supplies of gasoline are being shipped out of the country to travel thousands of miles via the Bahamas before finally ending up in California, a state battling shrinking fuelmaking capacity and high pump prices. Shipments on the circuitous route are increasing. California imported more gasoline in November than ever before, with more than 40% coming from the Bahamas. RELATED: Valero confirms Bay Area refinery will shutter, leaving questions of site's future"
"The lengthy journey adds another layer of cost to California's already expensive gasoline market. Yet the phenomenon isn't likely to disappear soon, thanks to a combination of disappearing oil refineries, a lack of interstate pipelines and a loophole in a 106-year-old maritime law. California has among the strictest environmental regulations in the US, making it costly for energy companies to operate in, though a wave of upcoming refinery closures is prompting officials and regulators to soften their stance."
"With Valero Energy Corp. set to close a Northern California refinery this spring, and no fuel pipelines connecting the US Gulf's oil-producing powerhouse to the West Coast, the nation's most populous state will likely depend on imports to bridge the gap. Under the Jones Act, any goods shipped between US ports must travel on US-built, owned and operated vessels. Those tankers are in short supply and expensive to charter."
US gasoline supplies are being exported and rerouted through the Bahamas before arriving in California, with shipments on that circuitous route increasing. California imported a record level of gasoline in November, with over 40% originating from the Bahamas. The extra voyage adds transportation costs that amplify already high state pump prices. Contributing factors include refinery shutdowns, an absence of interstate fuel pipelines to the West Coast, California's stringent environmental regulations, and a Jones Act requirement that domestic shipments use scarce, costly US-flagged tankers. Analysts estimate refinery closures could raise consumer gasoline prices by about five to fifteen cents per gallon.
Read at www.mercurynews.com
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