(Robert Campbell is a Reuters market analyst. The views expressed are his own)
By Robert Campbell
NEW YORK, March 12 (Reuters) - America's periodic gasoline price debate is usually a mix of willful ignorance and cynicism that achieves little but oil executives must be hoping the latest episode dies down before the United States' massive fuel exports get much attention.
After all, exports of diesel fuel, and increasingly gasoline, are now crucial profit centers for many U.S. refineries, hard pressed by shrinking domestic demand.
As long as the export trade was concentrated in diesel, refiners were relatively shielded from populist ire by the fact that few consumers buy diesel fuel regularly.
But with exports of gasoline reaching nearly 650,000 barrels per day in December, or more than the combined consumption of drivers in the states of New York and New Jersey, the situation may soon get less comfortable.
Whether or not the industry is prepared for the inevitable backlash that will come when these figures are discussed in public is unknown.
But this debate will have profound implications, not only for global refined product balances, but also for the way North America will handle its emerging bounty of light sweet crude oil.
To be sure, refiners will doubtless argue that some of the gasoline they export is of a lower quality than can legally be sold in the United States.
They may also point out that limiting exports could simply prompt refiners to reduce the amount of oil they process rather than sell gasoline into the domestic market.
In both cases, they may well be right but these talking points are hardly calculated to win over irate consumers and politicians bidding for cheap electoral points.
Even if countless investigations have failed to turn up evidence of collusion in U.S. fuel markets, popular suspicion about the oil industry will be easy to fan.
CRUDE OIL EXPORTS
For now, refined products offer U.S. oil companies an easy way around tight federal restrictions on crude oil exports.
Companies shipping refined products abroad still need an export license but the rules make it clear that these are to be granted as a matter of course.
While the United States was a major importer of refined products, the impact of this loophole on the local market was at best theoretical.
It also helped U.S. refineries offload oil products unwanted on the local market, such as residual fuel and off specification products.
More recently, the United States' exports have probably restrained some of the recent increase in global crude oil prices by avoiding a repeat of the scenario seen in 2008, when tight refining capacity was a major culprit behind surging oil prices.
By allowing the sophisticated refineries of the Gulf Coast to meet international demand, the world has so far avoided the surge in refined product prices that would be needed to allow simple refineries to replicate their output.
Indeed, any step to take the United States out of the oil product export market in a bid to cut domestic fuel prices would probably backfire for this very reason.
But of course, this is no guarantee that U.S. politicians will not try it given their lengthy track record of misguided attempts to shape the oil market to their satisfaction.
Here is where the risks to oil exports are starting to build.
Although an attempt to ban the use of the proposed Keystone XL oil pipeline to support exports was defeated in the U.S. Senate last week, the issue is slowly gaining political traction.
While controls on exports are far from the mainstream policy discussion, the speed at which opponents of the Keystone XL pipeline were able to seize control of the agenda should be borne in mind. (Editing by Marguerita Choy)