Reflex wrote:
retmil46 wrote:
Increase refinery capacity? Last week, national refining capacity was only running at 83%. As was pointed out, in the 90's the oil industry shut down 50 refineries because they had overbuilt capacity in the 70's and 80's, and as the GAO reported the decision to shut them down was purely business to tighten supply and drive up prices.
As was pointed out, our fuel prices are almost exactly the same as those in Europe, Japan and Korea once you take the taxes off of all of them. That strongly suggests that the price is due to the market price of oil, not conspiracy theories about refineries. BTW, many of the refineries that were shut down in the 90's were old designs not able to comply with modern environmental regulations, they were compensated for by increasing capacity at more modern facilities(as they are doing at the largest one in Texas right now, with most of the new capacity going to diesel production, thankfully). Furthermore, most refineries are independent of oil companies and have a fixed markup, which makes it unlikely they would close down to 'drive up prices' since they would be reducing their profit potential by reducing thier capacity, a higher price does not benefit a refinery.
Not saying the oil industry has no culpability, when prices caved in the late 90's the response by the industry was to end most exploration for new sources, which is the real reason prices have gone up so badly combined with increasing demand from the third world.
Boy oh boy, you sure do know everything don't you? How about some links to some corroboration hmm? Oh, right, you never post any of that, we are just supposed to take your word for it, or ask Dork Cheney to investigate if there is any collusion among his golfing buddies.
The concept of ANY refiner having a "fixed markup" is just as unbelievable as, oh Santa Claus being real, and delivering in July this year. Why would they limit themselves as a business?
If you ran a business selling widgets, and you were the sole determinant for the selling price of those widgets (if they ARE independent as you CLAIM) then why not get as much as you possibly could for each and every unit? Would you decide "No, I'm not going to get 100% profit on these, I'll just have to settle for 20% even though the market MUST have what I'm selling"
Be realistic. They WILL reduce capacity to "stabilize" the prices (read that as continue watching them rise) just like OPEC WILL cut production to also "stabilize" those same prices so they can afford their 50th Bentley. After the 2004 / 2005 hurricane seasons, the refineries that were operating, were burning the candle at both ends and running at 98% capacity for MONTHS. Thus disproving the oil executives that had previous-to-the-storms stated that refineries couldn't be run at full capacity for months, it just wasn't possible to run them over 85% for any length of time. Yea... Don't think so. Once the broken ones started coming back online, they have all been slowly dialing back the outputs, CAUSING the price skyrocketing. Demand WORLDWIDE since 2001 has not risen 300%, so why have prices both per barrel, and per gallon? The devil is in the details, and can be found by following the billions in profits that weren't there before 2001.
As for the refiners being "independent" of the oil companies... Yea, I'm not buying it. They may LOOK independent, if you only look at the name on the sign out front, but with mazes of shell corporations and holding companies that exist on paper only... Can anyone really hope to answer that question? Doubtful.
A perfect example of this is the power grid. FPL (Florida Plunder and Loot) owns generation capacity in several states. They *claim* to not own any transmission equipment beyond the local level, those big lines are "owned" by another company. Yet FPL has an 11 BILLION dollar "equipment depreciation fund" that is being paid into to cover the depreciation of the resale value of large-scale equipment that was damaged during the hurricanes. At the same time, their own "investment group" that actually is a separate company that owns FPL the power company... Also has a major stake in the transmission company that FPL supposedly doesn't own.
Yea, the "power company" might not own them, but the paper "investment company" does own them.
See what I'm getting at? Its all about shifting the costs and showing more profits. Accounting voodoo designed to avoid taxation, and at the same time, opens the potential for bookkeeping black holes. The wonderful humanitarian company of Exxon Mobil has lots of these "wholly owned subsidiaries" or other types of child corporations. Some operate rigs and drill... Others operate pipes and ships and transport... Others refine, still others sell it to the shlub with the Escalade. Yet ALL are paying shareholder dividends up the stream into the big 40 billion pot. And they aren't "fixing" their markup just to be nice. They are adjusting it as they see fit to avoid potential legislation, and maximize those profits.