The CEO of Valero Energy says, thanks to developments which are the 'most amazing development' of his long career in the oil industry, consumers, barring unexpected issues, should not budget for rising gas prices this summer, nor should we have to deal with sudden spikes in gas prices, 1200 WOAI news reports.
"Gasoline prices have come down, and to be honest, I don't see gasoline prices going up," Bill Klesse told reporters following Valero's annual meeting.
Klesse said there will always be 'volatility' in gas prices, because, as any commodity, they are subject to the usual market ups and downs.
But Klesse says thanks to the Eagle Ford, the Bakken Shale in North Dakota, and other amazingly productive fracking plays, there is a lot of oil out there, and there is not the demand, at least in the United States, for all of it.
"Demand is only running about 8.4 million barrels per day," Klesse says. "It has not recovered anywhere near where we used to have demand."
Analysts say since gasoline demand peaked in 2006, it has fallen due to the Recession, due to better gas mileage in today's cars and pickups, and due to commuters making major, and permanent, changes in their driving habits. Industrial use of gasoline is also falling due to efficiencies in the manufacturing process.
But Klesse says demand is still growing in Asia, and Valero is exporting more gasoline and other refined products than ever before.
He says refining crude oil and exporting it is a surprising source of jobs in the United States.
"I visited a refinery recently, and there were 5,000 people working in that refinery," Klesse said. "Those are Americans working good jobs here in America."
He says North America and Europe are 'no longer growth markets' for gasoline.
Klesse bemoaned the fact that pipelines, including the highly controversial Keystone XL Pipeline, are being held up by environmental groups and endless legal challenges, but he says Valero is rising to that challenge, transporting crude oil in other ways.
"Crude is moving by rail to the east coast and west coast, and it should move to the Gulf Coast by pipe, but if it doesn't, it will get there by barge and rail," Klesse said.
Ironically, Klesse said moving crude oil by rail is actually more worrisome environmentally than moving it by pipeline, but it has to be by the more environmentally troublesome route...because environmentalists are blocking pipeline construction.