Another part is refinery capacity. After all, we don't use crude oil in our vehicles, we use refined product. The EPA has mandated some 300 designer blends of gasoline alone here in the US for different regions and different times of the year in an effort to reduce air pollution. At the same time, this has balkanized the market so that a refinery in one state may not be able to supply gasoline to another state. This has already led to shortages and higher prices in several parts of the country. It also means that foreign refineries can't make up the slack.

The way the EPA has mandated these blends is also part of the problem. For example, they recently mandated a designer blend for Denver to take effect this summer. That ruling didn't leave the refineries much time to make the switchover, so spot shortages are likely. Current predictions call for gas prices to rise another 5 cents per gallon. Since Colorado is a relatively small market, odds are the rest of the state will be forced to use this Denver blend even though we don't have the problem.

One size doesn't fit all, and some of these blends do cut air pollution. It seems there should be a reasonable balance between a single blend and 300 blends. We also need to look at increasing refinery capacity so that an accident at one facility doesn't have such a dramatic impact on the region it serves. I've heard that the US hasn't built a new refinery in 20 years or so and several smaller ones have shut down in that time, while at the same time consumption of gasoline has increased. We could have all the oil we need, but if we can't refine it, we'll still have high prices.