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Gasoline Prices Fueled by Graying Users, Rusty Refineries

Wednesday, 16 May 2007 | 12:13 PM ET

Are outages and maintenance issues causing our refineries to operate too inefficiently? James Halloran, energy analyst with National City’s private client group, appeared on “Morning Call” to discuss whether refining capacity is having an effect on what you pay at the pump.

Refinery Review
Insight on why the U.S. hasn't built more refineries, with James Halloran, National City Private Client Group energy analyst and CNBC's Liz Claman

According to Halloran, there continues to be more demand than supply. “Americans are not giving up on gasoline, no matter what the price is. So, the demand continues to remain constant or go up slightly, even with higher prices.”

The last refinery built in the U.S. was the Marathon plant in Garyville, La. in 1976. And Halloran said, “It’s a long, long lead time to build the refineries that people think would cause the problem to go away.”

Halloran also said that people are losing sight of the demographics of the U.S., which he believes have a great impact on gasoline prices. “We are living longer, healthier and are driving longer. People are moving to places with less public transportation. The demand side is just as much to blame as the lack of refineries,” said Halloran.