ITWASSOOTED: Don't Export the Oil

Wednesday, October 12, 2005

Don't Export the Oil

The following commentary by Jamie Court was broadcast on Tuesday, October 11, 2005 on the Marketplace Radio Program on National Public Radio. -------------- Click here to listen the audio of the commentary.

Kai Ryssdal (Host): You'd think, times and pump prices being what they are, that all the oil and gas that's produced in this country would stay in this country. But Jamie Court says part of our supply is on its way overseas.

Jamie Court (FTCR): Refineries make the residential heating oil that warms your home. Part of the reason home heating prices are skyrocketing is there are barely enough refineries to meet demand. Oil companies like it that way. A scarce commodity keeps their prices and profits high.

So the push is on in Washington to increase American refinery capacity. There's one catch though. If we want to see prices fall, then oil companies have to sell their heating oil and petroleum products here in America, not in Singapore or Chile.

You see, right now in a period of peak demand and limited supply, oil companies are exporting our heating oil all across the globe. That's creating a shortage right here at home and driving up the price.

Department of Energy data show that oil companies exported 1 and a half BILLION more gallons of liquid heating products in the first seven months of 2005 than during the same period last year.

That amount is about 20 Times greater than the size of the entire North East Strategic Reserve for heating oil. At the same time, the energy department numbers show that imports are falling.
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