Who is preventing new refineries??

Discussion in 'Current Events' started by BrownShark, Apr 29, 2008.

  1. BrownShark

    BrownShark Banned

    Back during George H. Bush's administration, 27 refineries were shut down by the oil companies because wall street analyst said they were only operating at 11% output and keeping the price of oil at 15 bucks a barrel. Once shut down, the price of oil began to rise. During Clintons term, more oil companies began shutting down refineries to INCREASE profits. The right wing media will have you believe its enviromentalists who are preventing new refineries, yet leave out that the oil companies and the republicans in conjunction with oil companies shut down refineries willingly.

    Big Oil Looking for a Government Handout
    By Matt Dougherty
    Apr 18, 2006, 16:55

    Shortly after Hurricanes Katrina and Rita blasted through the South, petrochemical refineries in and along the Gulf of Mexico were flooded and damaged, unable to produce gasoline. As a result, the price of gasoline jumped to over $2 a gallon across the country, a 90 percent increase since January 2001.

    Many gas stations reported that they were running dry and would not be re-fueled until a much later date. Lines of frightened drivers waited in for hours in order to fill up on what gas was left. The media reported that Americans were scared of the monetary effects the increase would have on their families. The United States was now in the midst of what many were calling an "energy crisis." Others believed that this was only a short-term situation. It was how politicians chose to react to the "crisis" which might be the real reason it will ultimately be remembered.

    "A 'crisis' is something that must be fixed, right now, or a catastrophe will result," University of Texas professor and oil industry expert Dr. David Prindle said. "Such a description does not fit the situation after Katrina. Prices went up. That's all."

    On Sept. 26, 2005, Rep. Joe Barton (R-Tex), head of the Energy and Natural Resource Committee, introduced the Gasoline for America's Security Act 2005, to the House of Representatives in what he said was a response to the present energy crisis. The most significant part of the bill gave the authority for the government to subsidize the construction of new refineries for petrochemical companies, despite the fact that the oil companies had intentionally been closing down refineries for years prior to the hurricanes. It would allow for oil companies to construct refineries on military bases and government controlled areas offshore. The bill also included a clause in which several environmental restrictions on the oil companies would be repealed.

    "The bill was an example of yet another free giveaway for 'big oil'," former Texas Agriculture Commissioner and talk-show-host Jim Hightower said. "They have their hands deep in the pockets of politicians."

    The bill passed the House of Representatives by two votes on Oct. 7, 2005, with a narrow 212-210 vote. The bill, which was supposed to be open for vote for only five minutes, was held on the floor for 90 minutes, to the chagrin of Democrats who chanted "Shame!Shame!."

    During that time, the Washington Post reported that Rep. Tom DeLay (R-Tex) twisted the arms of moderate Republicans who were originally opposed to the legislation, ultimately convincing them to vote 'for' the bill. Environmentalists and their Democrat and Republican allies argued that the country could not stand any relaxation of the Clean Air Act.

    The critics argued in a year when oil companies were getting ready to announce industry-record profits, and since they were the ones who were shutting down the refineries just four years earlier, shouldn't they be the ones paying for the construction of new refineries.

    From 1995 to 2001, American oil companies shut down 24 oil refineries along the West Coast. Gas prices in the mid-1990s were low -- too low for the likes of the oil companies. Refineries were operating efficiently, producing large quantities of gasoline and therefore cheapening the cost of gas at the pump.

    According to a 2001 report by Sen. Ron Wyden (D-Ore.), oil companies deliberately shut down refineries in the mid-1990s in order to increase the price of gasoline. Wyden based this conclusion on his acquisition of internal oil company documents written in 1996.

    One Mar. 7, 1996 Internal Texaco document said: "As observed over the last few years and as projected well into the future, the most critical factor facing the refining industry on the West Coast is the surplus refining capacity, and the surplus gasoline production capacity. The same situation exists for the entire U.S. refining industry. Supply margins, and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and or increasing the demand for gasoline."

    A Nov. 20, 1996 Internal Chevron document said: "A senior energy analyst at the recent API (America Petroleum Institute) convention warned that if the U.S. petroleum industry doesn't reduce it's refining capacity, it will never see any substantial increase in refining margins...However, refining utilization has been rising, sustaining high levels of operations, thereby keeping prices low."

    "The oil companies are like the old Texas ranchers used to be," Hightower said. "They don't just want their land but they want all the land next to their's too. It doesn't matter how much they end up making, they always want more."

    Last year, ExxonMobil, ChevronTexaco and ConocoPhillips broke profit records across all industries. ExxonMobil at $125 billion made the highest income of any company ever, in the history of the world.

    "Oil companies' influence is just as great today as it has always been," Hightower said. "Joe Barton, and his cronies, are simply working in the best interest of the oil companies when he composes legislation like this; not in the best interest of the people."

    According to opensecrets.org, a watchdog group that monitors monetary contributions to politicians, Barton alone has received close to $2 million in campaign contributions from energy companies and their political action committees since he has been in office. The oil and gas industry has been the top industry contributor to his campaign. This does not include contributions from individuals who work for petrochemical companies, though. Last year, employees from Anadarko Petroleum alone, contributed $50,000, opensecrets.org reports.

    Barton's office would not return World Internet News' phone calls after several messages.

    "Anybody who has money, and is willing to invest it in politicians, has influence in Texas politics," Prindle said. "Therefore, the oil industry is still important in Texas politics."

    After weeks of trying to contact ChevronTexaco and ExxonMobil for comment, they would not return World Internet News' phone calls.

    On Oct. 24, 2005, the bill moved to the Senate. No vote was taken. It has been referred to the Committee on Energy and Natural Resources where it remains.
  2. BrownShark

    BrownShark Banned


    it is clear that the republicans allowed the Oil company speculators to skyrocket the price of oil to record levels just to get the american public to beg them to drill in Anwar province.

    This was predicted prior to GW taking office by many in politics and today as price hits $4.00 a gallon here in california, Pres. Bush gave a press conference where he asks the american public to consider drilling in anwar.

    He knows, this will have no effect on gas prices.

    This oil is not intended on american use, its intention is to sell this gained oil to china and the pacific rim.

    Our oil companies want to be a player in the global oil market and not be specifically tied to the american oil markets where profits are typically low as compared to other countries.

    This is all about money, not the economy. They know that if oil gets high enough, americans will beg for an oil well in their back yards..

    The President showed his cards today.

  3. brett636

    brett636 Well-Known Member

    Here in the U.S. we have what is called a "free market" economy, or atleast something close to it. The oil companies are "capitalist" companies, meaning they are in business to churn a profit. When a company is turning razor thin profits and has an excess capacity, that company cuts their capacity. Its unfortunate, but true. We all have fond memories of the gas prices of the late 90s, and yes the oil companies did shut down some refineries. Thats just the name of the game in keeping the business going for the long haul. The price of oil has little to do with this as the price has been rising due to increasing demand from China and India coupled with a weaker dollar and a democrat controlled congress has caused it to skyrocket.

    Now keep this in mind. Even with the skyrocketing price of oil and limited refining capacity the oil companies only make about 6 cents per gallon of gas sold. The goverenment on the other hand earns upwards of 60 cents a gallon depending on what state you are located. Now who is in a better position to lower the price of gas? I can tell you right now that it is not the oil companies, and both barak obama and hillary clinton both support higher taxes on gasoline to help reduce the farce known as "green house gas" emissions.

    Today we can't increase refining capacity if we wanted to. The government has such strict rules on building a new refinery that it isn't feasible for the oil companies to do so. This is given the oil companies can find a parcel of land where the neighbors will allow them to build one at all.

    While this is a problem, it has very little to do with the oil companies and a lot to do with our government policies. If something isn't done soon this will only get worse.
  4. BrownShark

    BrownShark Banned

    Heres a good link to understand the cost of fuel going back to reagan.

    Pay close attention to clintons term (the lowest cost to americans at pumps) and those of the three republican presidents.


    Clinton was 92 thru 2000.

  5. brett636

    brett636 Well-Known Member

    And? clinton had little, if anything to do with the price of fuel then, just as George Bush has little if anything to do with it now.
  6. BrownShark

    BrownShark Banned


    I can respect a well formatted response with an opinion that you can believe in. No insults from me on this one.

    I will however, debate "some" of your positions as I believe they are incorrect or slightly off the mark.

    Lets begin with this:
    Indeed, we have a "free market" economy, but what makes it work has many varibles. Sometimes, regulation has to be in place to keep things from reaching a gouging point. In some cases in America, once de-regulation occurs, prices become out of control. Oil may be facing regulation in the upcoming years and only time will tell.

    No argument here. The oil companies have turned a profit under this president unlike any other president in history. In fact, the rate of profit in 8 years is larger than the combined profit of all the oil companies in all the years before Bush took office.

    This one i am not sure you really want to apply to the oil companies. "Razor thin profits"? This hasnt been the case for oil in 8 years. Record profits quarter after quarter, new ALL TIME profits for larger oil companies and CEO's making over 300 million in bonus and salaries.

    Indeed, cutting capacity is occuring. In the first quarter of this year, consumer use of gasoline dropped almost 5 % following a trend of decline from the last quarter of 2007 of 5%, and these "capitalist" decided to DECREASE gasoline refining capacity from 98% output to 84% output.

    What does this do? Its simple. By reducing refining output, it falsely manufactures a shortfall of expected delivery of gasoline in the coming months, then the oil speculators discuss this with the oil companies and then falsely raise the price of a barrel of oil for the next month because of expected delivery shortfalls.

    This is the problem. This started with Bush 1 and the oil companies. When Bush 1 decided to ALLOW the oil companies to begin a systematic shutdown of 27 refineries in the USA, they knew the price of oil would be manipulated.

    They figured out that if they can encourage consumption and decrease production, the price of a barrel of oil would reach new "margins" (profits).

    Under Clinton, he used a threat of flooding the market with oil out of the strategic reserves to keep the price of oil down.

    With this threat, the price of oil remained stable in the US for 8 years.

    Under Bush 2, if you look at the chart, almost immediately, the price of oil went up and the price of gasoline shot up to $2 bucks a gallon for no reason at all.

    China and India are using more oil, yes, but that has nothing to do with "our" levels of fuel in this country.

    In China, the goverment subsidizes the price of gas to their citizens by almost $1.50 a gallon. This is why they pay less than we do.

    Under Bush 2, he has taken no action to curb prices to the american public. He has not encouraged anyone to conserve fuel usage. He has not put into action, any car pool incentives as Clinton did for 8 years.

    If Bush 2 wanted to get the price of oil down, why didnt he ask the republican congress and senate to pass his energy bill that allows drilling in Anwar during the 6 years they controlled congress and the white house??

    Why wait until the democrats control congress to try and pass an energy bill?

    Well, this is a simple one to answer.

    There is no incentive for oil companies to increase production.

    They are making outrageous profits right now and no one is stopping them, so to invest in any projects that increase production and "LOWER" the price of oil is simply rediculous.

    Why would they go from $125 a barrel to $50 a barrel?

    This one just isnt true at all. In 2005, a bill was passed to ease restrictions on oil refineries and goverment land was available for construction of such projects. Again, the oil companies are not interested. Its counterproductive to profits.

    I will ask you to consider these scenarios:

    In a free market economy, what if all the dairy farmers get together and decide to milk fewer cows per day and reduce the output of milk and raising the price of milk to $10 a gallon?

    Would you be cool with this?

    What if chicken ranchers raised less chickens and harvested less eggs and decreased production and raise the price of a dozen eggs to $10 a carton?

    Would you be cool with this?

    What if wheat farmers cut their fields in HALF and provided 50% less wheat and then raised the price of a loaf of bread to $7?

    Would you be cool with this?

    What if beef farmers got together and decided to raise less cows and cut beef production by 50% and provided less product to markets and restaurants causing a steak to cost over $30.

    Would you be cool with this?

    If you believe that we are in a free market economy, and a company has a right to churn a profit, and that company has the right to cut excess capacity, would you be comfortable paying $57 bucks for a Steak, Egg, Milk Bread breakfast after all these entities manipulated the market just for profit???

    How many americans could afford this??

    i am curious.

  7. brett636

    brett636 Well-Known Member

    Shell Oil president: To cut price, produce more gasoline in U.S.

    (CNN) -- Gasoline prices set a record for the 16th consecutive day Wednesday. A gallon of gas cost an average of $3.62, according to AAA, and much more in some markets.

    Shell Oil Co. President John Hofmeister says a boost in U.S. production would startle the world market.

    All three presidential candidates have weighed in on the issue, and President Bush on Tuesday addressed it during a news conference.

    John Hofmeister, president of Shell Oil Co., the U.S. division of Royal Dutch Shell, addressed rising gasoline prices during an interview Wednesday with John Roberts on CNN's "American Morning."

    ROBERTS: What do you say to people who are in this budget crunch of trying to fill up the family car?

    HOFMEISTER: I say we need more gas to be produced in this country. I've been saying that for three years, ever since I took this position [as president of Shell].

    If the U.S. set a goal to produce 2 to 3 million barrels more a day in this country, we would send a shock around the world that would immediately say to the speculators, hey, U.S. is serious. President [Bush] said something yesterday about this. I didn't hear him, but I think that's good news. But we should set a specific target.

    The presidential candidates should be out there on the postings saying let's increase domestic production by 2 to 3 million barrels a day. That would be something that would put money back into this country, jobs back into this country, and it would bring more supply toward the Americans who need it.

    ROBERTS: The president is advocating more drilling on U.S. territory. Isn't it true that globally we're starting to reach a peak in production and that within maybe a decade or two oil production will begin to decrease?

    HOFMEISTER: Well, I think there is some argument [that] with convenient, easy oil we will peak sometime in the next decade. I think Shell sees that coming, but in terms of total oil supply to the world, we're a long way from reaching peak oil because it doesn't take into account unconventional oil.

    I think the president brings up a good point in that we could, we have the available domestic supplies off the coast of Alaska as well as [the Alaska National Wildlife Refuge]. Shell has won $2 billion worth of high bids for the Chukchi Sea -- that's a few years off before we could begin production.

    But let's remember there's more than 100 billion barrels of untouched oil and gas in this country that is subject to a 30-year moratorium. Now, there's only one body in this country that can set a 30-year moratorium, and that's the U.S. government.

    ROBERTS: Sen. Hillary Clinton wants to slap you with a 50 percent tax on what she calls windfall profit, profit above a certain level. Is that a good idea?

    HOFMEISTER: Look at our revenues and our income for the last quarter. If we had made $7.8 million on $114 million of revenue, nobody would call that excessive, because that's 7½ percent. We made $7.8 billion profit on $114 billion revenue -- same 7½ percent. So to me that is not an excessive number when banks and pharmaceuticals and IT companies earn a whole lot more.

    ROBERTS: Would it hurt you if she put in place this tax on the windfall profits?

    HOFMEISTER: Sure it would. It would slow down investment. Taxing the oil companies was tried in the '80s. It drove us to do imports, which is exactly the problem we have today.

    ROBERTS: Where is the top of all this? How high can the price of a barrel of oil go? How high will the cost of a gallon of gasoline go?

    HOFMEISTER: I heard somebody say the other day it's as long as a piece of string. We don't know.

    ROBERTS: The president of OPEC said $200 a barrel.

    HOFMEISTER: Yeah, well, there are some countries out there subsidizing the cost of their energy to their consumers and industries to compete with America -- or against America -- because they think America won't solve the problem.

    ROBERTS: You're saying you have no idea where the top is.

    HOFMEISTER: We don't know. But we should produce more oil in this country.
  8. av8torntn

    av8torntn Well-Known Member

  9. av8torntn

    av8torntn Well-Known Member


    I do not know how interested you are in this subject but I found some things you may be interested in.

    Here are some good charts you can look at. I think someone on here suggested that since there are fewer refineries there is less fuel so the price is higher. Table 3,4,5 and Figure 1 are the most interesting.


    This is a pretty good and basic article.


    Here are some interesting facts from the Department of Energy.

    Worldwide production of oil by FRS companies increased by 0.4 percent in 2006 while production of natural gas increased 1.5 percent.
    Finding costs for FRS companies increased to $17.23 per barrel of oil equivalent in the 2004-2006 period, 51 percent higher than the previous period (2003-2005).
    Lifting costs increased 17 percent to $8.32 per barrel of oil equivalent in 2006.
    Finding and lifting costs combined increased to 39 percent to $24.29 per barrel of oil equivalent in 2004-2006, the highest since the 1983-1985 period.

    Not to leave you out BS here is an article to challenge your way of thought a little.


    And this one since you brought up China.