Fearing gas price spikes on the East Coast this summer, Washington pols are trying to talk refiners out of closing unprofitable plants. It's the EPA they ought to hector. The untold story behind soaring pump prices is that major U.S. refineries are going out of business and creating at least regional shortages thanks in no small part to costly EPA rules. 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. 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.
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