The Wall Street Journal analyzes the Carlyle Group’s decision to expand Philadelphia’s Sunoco Refinery, concluding it’s a sign the company is doubling down on the domestic energy boom brought on by shale drilling:
With the Sunoco deal, Carlyle is betting it can improve margins partly by taking advantage of a new twist in the energy landscape—the bounty of oil and natural gas unleashed in the U.S. interior in recent years as producers learned to crack open energy-rich shale formations.
Refineries along the Eastern seaboard and in the Caribbean have struggled to access this newly abundant oil from the U.S. interior, as the current pipeline system doesn’t adequately serve them.
That has left them to pay more for imported oil than their competitors on the Gulf Coast and Midwest, which are closer to domestic oil fields.
While historically the price difference between domestic and foreign oil was within a few dollars a barrel, currently it is more than $13 and has been as high as $27 in the past year.