John Calce, America First Refining Talks Gas Prices

**Nigel** (0:00)
Hi, my name is Nigel, Jason Hammer is out, Ethan Hatcher is in.
I think gas prices aren't quite where they need to be, although they are on a steady decline, it seems like, over the past couple of weeks. Will it last all summer, especially with, I'm sure, record numbers of travelers hitting the road this summer. For more on this, we'll go to the hotline and bring on oil and gas industry expert, John Calce. John, welcome to the program. Maybe just a little bit about your background first in the oil and gas industry and then we can start talking gas prices.

**John Calce** (0:33)
Sure. Thanks for having me on and hope y'all are having a wonderful day.
I've spent the last couple of decades primarily in the upstream space, drilling and well been in the shale as they say the scale revolution. So started that in the early 2000s and have been a part of watching the business grow across the country from Texas to Pennsylvania and Ohio and North Dakota, et cetera, and realized about a decade ago that we are going to be making a lot of very light oil in this country and so developed this business, America First Refining to take advantage of that.

**Nigel** (1:09)
Light oil. What does that mean light oil?

**John Calce** (1:13)
So oil has different grades just like if you think about different consistencies. So heavy oil, which is what comes out of Venezuela or Mexico or some parts of the Middle East or Canada specifically, is sludgy kind of asphalting.

**Nigel** (1:33)
Yes. I've heard that.

**John Calce** (1:35)
Light oil is the other end of that spectrum. So think of light oil that looks more like, it's a light color, it's much more viscous, it has a different boiling point, it has much less asphalts in it.
And so there are different types of oil that come out of the ground. And as a result, you need to process those oils differently.

**Nigel** (1:57)
We want a lot of light oil. Is that what you're saying? Because I heard the stuff coming out of Venezuela was like just awful to process and things like that.

**John Calce** (2:07)
Well, we do have a lot of light oil and that's what the shale revolution has brought. As a matter of fact, we export about 5 million barrels a day of light oil.
Because our refiners can't process anymore. We're making about 15 million barrels a day and our refiners for the most part were designed around a heavier barrel. So when Venezuela began opening up and producing more oil or when President Trump looked at working with a keystone pipe plant in Canada, it's because our refining plant generally in the US is designed around a heavier barrel. So today we produce lots of light oil and we export a lot of it.

**Nigel** (2:48)
And I do want to get to something later on in this conversation you're involved with, building the first new US oil refinery in more than 50 years, which is absolutely fascinating to me. We'll get to that. We're speaking with John Calce, oil and gas industry expert. So was my assessment at the beginning of this segment about how gas prices aren't where they need to be, but it seems like they're coming down a bit. Can you zoom out and maybe just give us a big picture of what consumers can expect here this summer?

**John Calce** (3:21)
I can try. We've seen oil prices come down from a high in West Texas intermediate crude price in the hundred and teens range to this morning, it's around $87.
Obviously contrast that with late 2026, early 27, before the Iran conflict started when oil was in the $60 to $70 range. So you're seeing gasoline price of the pump come down from a combination of things. One, oil price in general has come down on hope for peace in the Middle East. Also typically around Memorial Day, gasoline prices tend to creep up.

**Nigel** (3:56)
Yeah.

**John Calce** (3:57)
And that occurs for two reasons. One, there are different blends of gasoline because gasoline is very temperature sensitive. So in the summertime when it's warmer, the refiners have to switch over their blending process to produce a different grade of gasoline which causes some tightness in the market around Memorial Day.
And also Americans hit the road for the Great American Road Trip. So demand goes up. So unfortunately, this year you had the kind of perfect storm of that normal switch over where gas prices go up around Memorial Day combined with this Iran conflict which drove prices higher. So you're seeing prices come down. If we get a lasting piece in the Middle East, I think you'll see prices by the end of the year come back down to where they were before the conflict, which is what we all are hoping for.