U.S. Senator Bob Casey (D-Pa.) will chair a Congressional hearing next month to examine the effect closing of several refineries serving the East Coast has on energy prices.
The U.S. Congress Joint Economic Committee hearing is set for April 26, with the goal of quantifying the effect the closures have on consumers.
Rising gas prices coupled with decreasing refining capacity on the Eas tCoast raise serious questions about our ability to ensure an adequate supply of affordable fuel for American consumers, said Casey, Chairman of the Joint Energy Committee.
This hearing will shed light on the impact that decreased refining capacity will have on the price and supply of gasoline and heating oil for those that depend on it in the Northeast, he added.
The national price average for gasoline Monday jumped to $3.84, up 11 cents this month, the American Automobile Association reported.
There's no venue yet for the hearing or a witness list but John Rizzo, Casey's press secretary, said business experts will provide insight.
Rizzo would not say if Casey is likely to investigate the causes of the refinery closures.
Citing market factors, and economic viability, Sunoco (NYSE: SUN) closed its Marcus Hook, N.J., refinery, and plans to shutter another one in June. ConocoPhillips (NYSE: COP) shut down its refinery last year near Philadelphia, and hopes to sell it.
A third company, Hovensa, a joint venture with Hess Corporation (NYSE: HES), and Petroleos de Venezuela, announced in January that it, too, was closing down a refinery in the U.S. Virgin Islands.
The announcements by Sunoco and ConocoPhillips were heavily criticized at the time by Rep. Ed Markey (D-Mass.), Rep. Robert Brady (D-Pa.), and Rep. Henry Waxman (D-Calif.).
Markey, who sits on the House Natural Resources Committee, said the closures were profit driven.
In December, the U.S. Energy Information Administration released a report saying the Northeast will likely face fuel shortages following the decline in regional refining capacity.
The reason why the closures are happening, experts said, is simple economics.
There are not enough pipelines relaying the Midwest, which the majority of the nation's pipelines pass through on their way to Gulf Coast refineries, to the Northeast to satisfy the latter's demand for refined oil. As a result, Eastern refineries must purchase foreign oil at much higher prices and at a loss.
Brent crude oil in London on Monday traded for $125 a barrel. U.S. domestic oil traded in New York for $107.
With refineries spending a small fortune just to refine crude, gasoline and heating oil prices increase.
Gasoline traded up a penny Monday afternoon at $3.36 a gallon.