East Coast Gas Squeeze Expected

In 1902, Sun Oil, later Sunoco, opened a refinery in Marcus Hook, Pa., just south of Philadelphia. For its first few decades the facility refined Texas crude into gasoline. Eventually, it imported its crude from West Africa and other foreign sources. Marcus Hook, along with a second Sunoco plant and one nearby owned by ConocoPhillips, came to account for half the gasoline, jet fuel, and diesel produced on the East Coast.

These Philadelphia refineries could play a crucial role in determining the price many U.S. motorists pay for gasoline this summer—not because they will be refining oil into gas but because they probably won’t. All three are for sale, unprofitable, and outdated. Marcus Hook closed in December. ConocoPhillips’s refinery went idle in September. If Sunoco can’t find a buyer for its South Philadelphia refinery by July, it’ll close that one, too. “Sunoco’s Northeast refining business has lost nearly $1 billion over the last three years,” says company spokesman Thomas Golembeski. In February, Hovensa, a joint venture between Hess and Petróleos de Venzuela, closed its St. Croix refinery, which alone processed some 350,000 barrels of oil a day, most of it for the East Coast.