Dorgan’s Energy Summit Stumbles Upon The Obvious And Already Known
As reported in the news Senator Dorgan, D-ND chaired a hearing November 20 at Bismarck of the Senate Sub-committee on Energy and Water Development; purpose of the hearing was to delve into the recent shortages of gas and diesel motor fuels, and the resultant high prices, in North Dakota since late summer. Written and oral testimony was received by the senator from six representatives of the industry who spoke for retailers, distributors, refiners, and pipelines plus the Deputy Administrator of the Energy Administration. Questions by the senator were directed at all of the panel asking to how the severe shortage of gasoline and diesel fuel developed and why it seemed to affect North Dakota more than any other area.
The testimony revealed that a combination of events came together--a rain/flood in Kansas, a refinery down for planned upgrades, and essential maintenance of others created a shortage of product in the central area. Capacity is coming on line and the situation is easing, but supplies of gasoline are still tight and diesel is very tight. Winter grade diesel is very low and home heating oil is also very low; mild weather so far this fall has kept the shortage from becoming severe.
Here is an interesting twist; North Dakota now produces about 125,000 barrels of crude per day; just under half of that is refined in-state to fuel products; the remainder of the crude and much of the refined product is piped out of the state (amount not specified at the meeting). During this shortage period from late summer to present, the pipeline terminals at Fargo and Grand Forks have been out of product or severely limited. As a result tanker trucks must go to Alexandria, Mn. or further, to wait in line sometimes for 12 hours, to get product and haul it back into ND. This gasoline and diesel product may be the same product produced at Mandan, now being hauled back.
Near the conclusion of the one hour and 45 minute meeting the question was asked of the panel, “What do you see as the solution to this problem?” The answer takes two forms which are nearly the same in the end: the short term solution is more refining capacity by adding to existing refineries; the long term solution is building new refineries. So, building refineries is the solution. Does that surprise any one? How long have we known that? A dozen years, or more?
Senator Dorgan said that Congress is now at work on a new energy bill--how reassuring. This will be the umpteenth energy bill out of congress since Nixon was president; all of them intended to free us from the dependence on foreign oil. The dependence has increased every year since and the price continues to go up. We are importing gasoline and diesel fuel from Mexico and Canada because we can’t refine our own crude. There has not been a new refinery built in the U.S. for over 25 years. So, Senator Dorgan, how will the “new” energy bill fix that?
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