Oil bottleneck gives Rockies cheaper gasoline

Published on NewsOK Modified: February 1, 2013 at 12:39 pm •  Published: February 1, 2013
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New York has the highest gasoline taxes (69 cents), followed by California (67.1 cents). California also has specially blended — and pricier — gasoline.

While the Rockies aren't exactly awash in oil, the region's relative abundance has an effect, said Jim Ritterbusch, president of energy consulting firm Ritterbusch and Associates in Galena, Ill.

"There's pipeline construction going on all over the place trying to get that crude moved out of North Dakota," he said. "Most of the interest has been eastward toward the Midwest and trying to get that stuff toward the East Coast."

Proposed projects such as Calgary-based TransCanada's 1,700-mile Keystone XL pipeline, which could carry Canadian and potentially North Dakota oil to Gulf Coast refineries, could have a big effect on U.S. oil supplies, he said. Environmental groups oppose Keystone and the project is under review by the State Department.

"It's all a slow-moving process," he said. "But it's all good. We are becoming a big producer of crude oil again."

In just six years, North Dakota rose from the No. 9 oil-producing state to No. 2, behind only Texas. North Dakota now accounts for about 12 percent of U.S. oil production, up from 1 percent five years ago.

Horizontal drilling and hydraulic fracturing — blasting water, sand and chemicals down wells to split open deposits — made it possible. Much of North Dakota's oil has to be shipped elsewhere by rail because of the tight pipeline.

There is upward pressure on gas prices. Nationwide, including in the Rockies, gasoline prices are up slightly for the first time since last summer amid higher global oil prices driven by rising global demand, analysts said.

Meanwhile, unpredictable events overseas and closer to home — such as last summer's California refinery fire and pipeline shutdown that drove prices close to $5 in parts of that state — could drive up prices.

Hitch said he's not one to let high gasoline prices interfere with his travel plans. "I keep an eye on it, but it doesn't slow me down, where I'm going or anything," he said.

His sister in California feels a bit more strongly.

"She complains about it being over $4 most of the time," Hitch said. "It's nice to be in a place where it's cheap."

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