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REDRUBY
Generic female, idealist
Articles Posted: 54; Links Seeded: 3131
Member Since: 1/2006Last Seen: 11/27/2009
Member Since: 1/2006Last Seen: 11/27/2009
12 Votes
13 Comments
Oil Industry Says Biofuel Push May Hurt at Pump
News Type: Event — Seeded on Thu May 24, 2007 3:50 AM EDT
Article Source: The New York Timesadvertisement
Gas prices are spiking again — to an average of $3.22 a gallon, and close to $4 a gallon in many areas.
And some oil executives are now warning that the current shortages of fuel could become a long-term problem, leading to stubbornly higher prices at the pump.
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- Groups: Left of Center, Open Mic
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 | The Truth About Oil Prices | Novanglus | Wed May 23 | 49 |
- Public Discussion (13)
- Left of Center
- Open Mic
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10
2.1
{"commentId":730326,"authorDomain":"redruby"}
What a punishing way to manipulate the market.
{"commentId":730326,"threadId":"106621","contentId":"736596","authorDomain":"redruby"}
- 4 votes
#1 - Thu May 24, 2007 3:54 AM EDT{"commentId":730653,"authorDomain":"chum"}
That has forced many oil companies to reconsider or scale back their plans for constructing new refinery capacity.
Hmmm...considering they haven't built one in 30 years and have been seeing record profits, I don't feel much sympathy for the oil companies. I'm sure this will be their excuse for more record profits.
{"commentId":730653,"threadId":"106621","contentId":"736596","authorDomain":"chum"}
- 2 votes
#2 - Thu May 24, 2007 9:23 AM EDT{"commentId":730950,"authorDomain":"kylen"}
It seems logical to me, we are asking them to invest $50-100 billion and 5-10 years into building capacity that at the same time we say we don't want to use? I think I would find that a risky investment.
For a different perspective, who makes more money Wal-Mart of Neiman Marcus? The oil companies aren't stupid, they would sell more gas cheaper and make the same or more money. The fact they aren't means there is more to it than evil companies trying to hurt you personally.
If anything the people standing to gain the most from all of this are the environmentalists. Why isn't anybody accusing them of colluding with the oil companies? If prices stay high or get higher people will start putting real effort into cutting back and funding alternate transportation.
{"commentId":730950,"threadId":"106621","contentId":"736596","authorDomain":"kylen"}
- 1 vote
#3 - Thu May 24, 2007 11:07 AM EDT{"commentId":731554,"authorDomain":"redruby"}
Seems to me they've got the money to put into research and perhaps diversify rather than simply milk every last drop of profit from a dwindling resource.
{"commentId":731554,"threadId":"106621","contentId":"736596","authorDomain":"redruby"}
- 2 votes
{"commentId":731704,"authorDomain":"kylen"}
It's a different time frame, what they are earning today is from investments 10-15 years ago. It cost them $50-100 billion in investments last decade and now they are about to break even on that today. However they have to decide on investing another $X billion into tomorrow, and they are it's just a matter of where and how much.
Oil production is a moving target because fields go dry, and new technology allows oil fields to be somewhat productive again. Meaning their investments in that are always 'fresh' or new, they can't exactly milk anything for awhile they spend $500 million developing a field and it produces $750 million @ $50 / barrel for it's lifetime then it's off to a new well/field production facility with a new cost analysis.
Refining is different in that you don't need to build new refineries constantly. But refineries need a steady capital investment because they wear out fast, new technologies require upgrades, and they really have made amazing progress in getting more from less over the last 10-15 years or more from the US based refineries. They haven't been allowed to build more, so they expand and upgrade what they have. Old refineries in the 90s were at the end of their days, just too old making them very dangerous to operate (see BP issue last year) so they starting having to close them down. In the 90s there was a decent refining over capacity as well so it made sense. Now demand continued to increase beyond long term forecasts and refiners haven't been able to build new plants at old sites so we get into a crunch.
Now they are trying to decide how much to spend on refining, and we are sending very mixed signals. They can spend it anyway and hope that the government doesn't come along and pull the rug out from under them but that wouldn't be responsible to their shareholders. In the current political environment of blame first I think it's downright nuts to trust the government because it will backstab them at the first opportunity. Which is why I think we are going down this road, mutual distrust.
A large part of the country has manufactured a common enemy in oil companies to rally their political support and it's leading to complications unsurprisingly. Someday perhaps people will realize that oil companies like all companies are not monolithic and that behind the name are real people and quit the demonizing and hate mongering and start working together.
{"commentId":731704,"threadId":"106621","contentId":"736596","authorDomain":"kylen"}
{"commentId":731852,"authorDomain":"luckydog"}
If they weren't holding a gun to our heads while picking our pockets, their explanations would be comical. Whether supplies are high or low they don't build refineries. Same with prices, although low was a long long time ago. In the national interest I think the time has come to break up these monopolies into smaller companies. Make additional refinery capacity a condition of offshore leases. Refiners and producers should not be allowed to be in the same company. As Bush would say 'this is not rocket surgery folks'.
{"commentId":731852,"threadId":"106621","contentId":"736596","authorDomain":"luckydog"}
- 4 votes
#4 - Thu May 24, 2007 3:16 PM EDT{"commentId":731928,"authorDomain":"hallo"}
{"commentId":732548,"authorDomain":"redruby"}
No matter whether refineries were closed or not, big oil had astronomical profits over the past several years...profits=net after expenses, repairs, depreciation,etc.
{"commentId":732548,"threadId":"106621","contentId":"736596","authorDomain":"redruby"}
- 3 votes
#6 - Thu May 24, 2007 7:57 PM EDT{"commentId":733022,"authorDomain":"hallo"}
{"commentId":740230,"authorDomain":"the-pitytorium"}
In recent weeks, refiners point out that they have been increasing output: gasoline production in the United States is at its highest level ever, 8.85 million barrels a day.
...
But demand is outstripping supply. In the first three quarters of the year, gasoline use grew by 2 percent, nearly twice last year's pace. Domestically produced supplies, though, have increased by only 0.5 percent a year on average.
Why not blame the drivers for creating the demand? These two paragraphs offer numbers which seem to dispel most conspiracy theories. Highest level ever makes it sound like they're doing their best to produce more gas, if only to cash in on the record-approaching adjusted market prices.
I'm no fan of Big Oil, but corporations exist to make profits for their shareholders. Does an oil company have any requirement to increase production if they can make greater profit margins by making less fuel? I'd like for that to be the case, but what exists right now to compel it? Congress' attempt earlier this week was feeble at best, and won't ever make it into the lawbooks anyways, with Bush's veto all but certain.
The real criminals are the people who through poor planning over the last few decades allowed every aspect of the nation's well-being to be so intimately tied to the price of gasoline.
{"commentId":740230,"threadId":"106621","contentId":"736596","authorDomain":"the-pitytorium"}
- 2 votes
{"commentId":745862,"authorDomain":"redruby"}
TomPitys...is there no moral compass required to guide the actions of corporations?
{"commentId":745862,"threadId":"106621","contentId":"736596","authorDomain":"redruby"}
- 2 votes
{"commentId":746411,"authorDomain":"the-pitytorium"}
Is there one? I don't think so.
Ought there be one? That's open for debate, though considering how often it would clash with their primary purpose, it might be a hard sell.
I work for a family-owned small business, and it seems we're able to exercise a lot more latitude in regards to making ethical business decisions than a corporation with stockholders to appease/enrich.
{"commentId":746411,"threadId":"106621","contentId":"736596","authorDomain":"the-pitytorium"}
- 2 votes
{"commentId":747431,"authorDomain":"redruby"}
Yeah, I can see that it would be easier to make ethical decisions in a small business than otherwise but I think we as a society need to demand ethical practices in all realms. It seems to me to be the foundation for building a more just society.
{"commentId":747431,"threadId":"106621","contentId":"736596","authorDomain":"redruby"}
- 2 votes
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