Sep 22, 2017 4 min read

An operator of a cross-state pipeline that is seeking to partially reverse a portion of its flow of gasoline and diesel fuel from the East to bring more product from Midwest refineries to Western Pennsylvania, said Friday the change could bring lower prices to motorists here.

Bill Hollis, senior vice president for Allentown-based Buckeye Partners, told members of Washington County Chamber of Commerce the company has a proposal before the state Public Utility Commission seeking to partially reverse the flow on Buckeye’s Laurel Pipeline, which brings fuel from refineries in the East to Western Pennsylvania.

The proposal is part of a plan Buckeye said would enable it to bring less-expensive fuel produced in the Midwest.

“The abundant supplies of crude oil now being produced in North America, combined with significant investments by Midwest refiners, are providing consumers to our west with a more affordable and reliable supply of the gasoline, diesel, jet fuel and heating oil,” Hollis told the audience during the chamber’s breakfast meeting at Southpointe Golf Club.

“Our project, which is driven by clear, long-term and compelling market trends, is good for America and good for Pennsylvanians,” Hollis said. “This is a win-win for consumers.”

But at least one member of the audience, whose company supplies fuel to area motorists, said Friday he wanted to see suppliers here have more choice through the ability to purchase fuel from both directions.

Buckeye has proposed to the PUC that it be permitted to partially reverse the flow on Laurel between the Pittsburgh and Altoona areas. The company has said the $200 million project would bring as much as 40,000 barrels per day of more affordable fuel into Pennsylvania.

The proposal, according to Buckeye, is a response to increasing pressure from Midwest refineries seeking new outlets for their growing production of domestically sourced fuel – a result of oil being produced from shale in the Midwest, Canada and the Texas Permian Basin – and sharply declining deliveries to Pittsburgh on Laurel from East Coast refineries that rely on imports from OPEC nations and other countries.

According to figures provided by Hollis, capacity at East Coast refineries has fallen 26 percent, or about 340,000 barrels per day, between 2005 and 2016. At the same time, refineries in the Midwest have seen capacity grow by about 353,000 barrels per day.

Hollis said in 2007, fuel from the Midwest was about 5 cents more expensive, but now is about 2 cents per gallon less than fuel refined in the East.

He said two recently constructed pipelines are providing about 130,000 barrels per day of new capacity to the Pittsburgh region.

Buckeye’s proposal has received the support of civic and elected leaders, small businesses, trade unions and free-market analysts.

Last week, state Rep. Jim Christiana, R-Beaver, joined state Rep. Jim Marshall, R-Beaver/Butler, and state Sen. Elder Vogel Jr., R-Lawrence, in sending a letter of support of the project to the PUC

But Giant Eagle spokesman Dan Donovan, who attended Friday’s breakfast meeting, said his company, which operates 90 GetGo fueling and convenience stores in Pennsylvania, including 70 in Southwestern Pennsylvania, favors having a choice of fuel distribution options coming from both east and west.

Donovan said Giant Eagle, which has partnered with competitor Altoona-based Sheetz, another popular stop for motorists’ fueling needs, and several Eastern refiners to oppose the Laurel reversal.

“For us, it’s about choice,” Donovan said. He said later that the company currently receives about 50 percent of its fuel supplies from Eastern refineries, adding that about eight months out of each year, fuel supplied from the East is less expensive than from Western suppliers.

Hollis said reversing the flow of Laurel between Pittsburgh and Altoona would cost about $200 million, with most work occurring at pumping stations on the line, noting that the pressure profile would be changed with the reversal.

Hollis said the PUC will begin hearings on Buckeye’s request Nov. 6, and that a decision should be made by early next year.