Saturday, April 14, 2012

A bit of economic geography:

In fact, refiners in the central U.S. have such a competitive advantage through their access to cheap locally produced crude that they have turned the U.S. into a net exporter of refined products like gasoline, despite the fact that we of course are still a huge net importer of the crude petroleum itself. We use pipelines to ship gasoline and diesel to the Gulf of Mexico, and tankers from there to sell refined products around the globe. The flip side of this is that refiners on the East Coast find themselves at a huge disadvantage. Refineries accounting for half of East Coast capacity are set to close.

That means that if you live in New York and complain about paying more than drivers in the central United States, you could soon see that differential increase even more.

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