Report cites unanticipated refinery closures as one key factor in last year’s gasoline shortages and resulting price swings
After Klobuchar introduced legislation requiring refineries to report maintenance schedules to the Department of Energy, the Energy Information Administration (EIA) has begun releasing information about planned oil refinery outages to avoid overlapping closures
WASHINGTON, D.C. – U.S. Senator Amy Klobuchar (D-MN), Vice Chair of the U.S. Congress Joint Economic Committee, today released a report outlining the economic costs of last year’s spike in Midwestern gas prices, showing it cost businesses and consumers in Minnesota more than $109 million dollars and totaled $1 billion across the Midwest region. The report cites unanticipated refinery closures as one key factor in last year’s gasoline shortages and resulting price swings.
After Klobuchar introduced legislation requiring refineries to report maintenance schedules to the Department of Energy to help prevent simultaneous closures and avert shortages after multiple refinery closures led to a surge in gas prices, the Energy Information Administration (EIA) has now begun releasing new information about planned oil refinery outages to avoid overlapping closure that could lead to price spikes.
“This report clearly outlines the economic pain wrought on Minnesota by last year’s gasoline price spikes, which took more than $100 million dollars out of our state economy,” Klobuchar said. “The Administration is now acting on my recommendations for improving information about refinery outages, and I will keep pushing to help prevent future supply disruptions and price spikes.”
Klobuchar’s report shows that the average retail price for a gallon of regular gasoline in Minnesota shot up 81 cents between April 15 and May 20 of last year. Prices did not come back down until five weeks after that peak. During that same time frame, prices for a regular gallon of gasoline increased by 42 cents across the Midwest region.
While a number of factors can influence the national cost of gasoline, regional price spikes are often triggered by problems in local refinery output and distribution. This was the case in the Midwest last year, when a number of routine refinery closings coincided with additional, unanticipated shutdowns. Those closures, combined with transport and delivery delays, caused a supply chain breakdown and region-wide gasoline shortages.
In addition to its provisions addressing refinery closures, Klobuchar’s bipartisan Gas Prices and Refinery Capacity Relief Act would also address the issue of low gasoline storage capacity in the Midwest, by asking the Secretary of Energy to look at the potential for additional fuel storage in the region. Klobuchar has also worked to crack down on excessive oil speculation on Wall Street and deliver more options to consumers at the gas pump, working to promote an “all of the above” energy agenda integrating next generation biofuels with traditional fuel sources.
The full report can be found here.