Obama's EPA Busy Shutting Down Energy Industry
Over just the past six months, three refineries supplying about half the gasoline, diesel and jet fuel to the East Coast have closed, including two owned by Sunoco Inc. They say they simply cannot make money anymore.Candidate Obama promised to cause energy prices to skyrocket, and expressed a desire to see US gasoline prices rise much higher. That is one promise that he is keeping.
Philadelphia-based Sunoco's refinery business in the Northeast has lost almost $1 billion over the past three years as U.S. demand for gas fell and the cost of foreign crude soared.
But over the same period, it had to shell out "significant expenditures for environmental projects and compliance activities" to satisfy onerous EPA mandates, according to the company's latest 10-K report.
In fact, it's spent more than $1.3 billion just to comply with stricter EPA rules, which carry stiff fines or penalties for violations. Sunoco fretted that these regulatory costs would grow exponentially under the Obama administration, which has hit some of its refineries with fines.
"During 2009, the EPA indicated that it intends to regulate carbon dioxide emissions, (which) could result in increases in costs to operate and maintain the company's facilities, as well as capital outlays for new emission control equipment at these facilities," the company warned investors in its 2011 report filed with the SEC.
"Compliance with current and future environmental laws and regulations likely will require us to make significant expenditures, increasing the overall cost of operating our businesses, including capital costs to construct, maintain and upgrade equipment and facilities," Sunoco added.
"To the extent these expenditures are not ultimately reflected in the prices of our products or services, our operating results would be adversely affected."
In the end, the company could not weather market crosscurrents long enough to recover the government-induced costs. It bled so much money that it decided to exit the refining business entirely.
A Sunoco spokesman confirmed in an interview with IBD that "the cost of complying with environmental requirements" was one of the factors that led it to decide to exit refining. _Investors
In many ways Obama's EPA -- and his entire administration -- is a huge governmental wrecking ball set loose in the US economy on a path of destruction. The US constitutional system of checks and balances on governmental abuses is being strained to its limit. It is a tribute to the caliber of persons who wrote the original US constitution that the republic is able to continue under a government grown so oppressively large and corrupt.
A look at some of the early congressional pushback against US EPA abuse of power and ideological caprice. Expect to see an increasing amount of scrutiny and opposition to malicious EPA counterproductiveness over the next several months.