U.S. Gas Exports Force Drivers Into Bidding War With Mexico At Pump
WASHINGTON -- Conservation, high prices, and hard times have led American motorists to dramatically decrease the amount of gasoline they buy.
But how are they rewarded? With even higher prices, in part because American refiners have started exporting enormous amounts of American gasoline to Mexico and other countries.
Exports of petroleum products -- mostly diesel and gasoline -- have increased sharply in the last two years, to about a billion barrels in 2011. For the first time, the U.S. is exporting considerably more finished products (though not crude) than it's importing.
Around 3 million barrels of petroleum products are sent abroad each day. For some perspective, consider that all U.S. motorists combined use around 8 million barrels of gasoline a day.
The top countries receiving the exports are Mexico, Canada, the Netherlands, Brazil, Singapore, Chile, Panama, Japan and China.
Most of the ongoing increases in gas prices can be traced to geopolitical concerns and rampant financial speculation that have run up the cost of crude oil. And yet, if U.S. refiners limited themselves to domestic sales, there would be a glut on the market, and diesel and gasoline prices would inevitably drop.
"The other countries are willing to pay more than we would," said James Hamilton, an economics professor and blogger at the University of California, San Diego. "And that's the price we pay, too, what they're willing to pay."
Hamilton said that's how things work in a global market. "If you are a refiner and you've got gasoline to sell, you want to sell it where you can get the highest price," he said. "If Mexico is willing to pay a higher price to Americans, you're going to want to sell it to them instead of Americans."
So what can be done to help out American motorists?
"I do not support an outright ban of exports," said Tyson Slocum, director of the energy program for the consumer watchdog group Public Citizen. "And I don't want to see the government regulating retail prices. But I don't think that it is in our best interests to be exporting at the rate at which we are."
WASHINGTON -- Conservation, high prices, and hard times have led American motorists to dramatically decrease the amount of gasoline they buy.
But how are they rewarded? With even higher prices, in part because American refiners have started exporting enormous amounts of American gasoline to Mexico and other countries.
Exports of petroleum products -- mostly diesel and gasoline -- have increased sharply in the last two years, to about a billion barrels in 2011. For the first time, the U.S. is exporting considerably more finished products (though not crude) than it's importing.
Around 3 million barrels of petroleum products are sent abroad each day. For some perspective, consider that all U.S. motorists combined use around 8 million barrels of gasoline a day.
The top countries receiving the exports are Mexico, Canada, the Netherlands, Brazil, Singapore, Chile, Panama, Japan and China.
Most of the ongoing increases in gas prices can be traced to geopolitical concerns and rampant financial speculation that have run up the cost of crude oil. And yet, if U.S. refiners limited themselves to domestic sales, there would be a glut on the market, and diesel and gasoline prices would inevitably drop.
"The other countries are willing to pay more than we would," said James Hamilton, an economics professor and blogger at the University of California, San Diego. "And that's the price we pay, too, what they're willing to pay."
Hamilton said that's how things work in a global market. "If you are a refiner and you've got gasoline to sell, you want to sell it where you can get the highest price," he said. "If Mexico is willing to pay a higher price to Americans, you're going to want to sell it to them instead of Americans."
So what can be done to help out American motorists?
"I do not support an outright ban of exports," said Tyson Slocum, director of the energy program for the consumer watchdog group Public Citizen. "And I don't want to see the government regulating retail prices. But I don't think that it is in our best interests to be exporting at the rate at which we are."
