The looming shutdown of the East Coast's largest refinery is poised to push gasoline prices higher in the region and leave the area more dependent on imported fuel, government analysts and industry representatives told House members today.

Three pending refinery closures in the mid-Atlantic are propelling local fears over already-rising gas costs climbing even higher, concerns that were little assuaged by cautious testimony from two Obama administration witnesses at a Pennsylvania field hearing of the House Homeland Security Committee's counterterrorism subpanel.

Even in the best-case scenario of gasoline reaching Eastern consumers on tankers from the Gulf Coast or Europe, the resulting regional economic toll appeared to weigh on Democrats and Republicans alike.

"It's hard for me to imagine that our homeland security is not threatened in some way by" the potential for Sunoco's Marcus Hook and Philadelphia refineries as well as ConocoPhillips' Trainer refinery to go offline by this summer, Rep. John Carney (D-Del.) said.

The prospect of losing the three refineries, which together constitute more than half of the East's total ability to process crude into gas, would ramp up the "offshoring of refining capacity ... would make the U.S. less energy independent," Carney added.

Energy Information Administration acting chief Howard Gruenspecht sought to balance his prediction of "likely" price increases in the East as a result of the refinery closures by noting that maritime shippers are preparing to increase the availability of U.S.-flagged vessels that could legally ship gas refined in the Gulf Coast north to Eastern ports.

But a spike in imports of certain fuel products remains likely, Gruenspecht said, telling lawmakers that "you could even imagine a trade where the Gulf sends distillate products into foreign markets and foreign markets provide distillate products to the U.S."

That outcome -- Eastern consumers paying more to import certain types of fuel while other types are exported from the refinery-rich Gulf of Mexico -- would represent potent political ammunition for Republicans and oil-industry advocates already slamming the White House over its bid to balance pollution limits and domestic drilling in an "all of the above" energy agenda.

American Fuel and Petrochemical Manufacturers President Charles Drevna and American Petroleum Institute downstream operations director Robert Greco steered the mid-Atlantic debate toward their groups' nationwide push to win approval of the Keystone XL pipeline and slow down U.S. EPA emissions rules.

Greco suggested that, to help keep U.S. refineries more competitive, EPA should ease up on a slate of new air-toxics limits it is planning. "We can't do both" greenhouse gas limits and curbs on sulfur in gasoline, or "Tier 3" tailpipe emissions, Greco said. "When you start layering on environmental regulations, you're increasing the costs of compliance for every refinery."

EPA last month pushed back at industry's dire warnings of gas-price increases as a result of its Tier 3 rules, once anticipated for release this month but still unsubmitted for White House regulatory review. Consumers should only expect to pay a penny more per gallon once the standards take effect, the agency said (E&ENews PM, Feb. 28).

East Coast refiners typically face an economic disadvantage over their Midwest and Gulf Coast counterparts, relying on lighter crude from the North Atlantic and Europe while their mid-country cousins take heavier fuels from the booming Bakken Shale region of North Dakota and Canada. The Keystone XL pipeline would unleash new supplies of that heavier crude but do little to alleviate a summertime price crunch in the East because existing pipelines leading there from the Gulf are already nearly full, Gruenspecht noted today.

"If some of our capacity is turning out to not be economically competitive," said the EIA chief, regarding East Coast refiners, "the question is, what do you do? That's a question for policymakers."