House Democrats reject bill that would make it easier to build refineries

One would think that someone worth $400 million could figure out a way to increase refinery production without needing handouts from American taxpayers or being subsidized by ignoring pollution costs. I also find it interesting that the political appointee is arguing for refinery production as the cause, while the other expert says the recent price increases are a result of our policy of confrontation with Iran and unrest in Nigeria, both of which could be improved with good diplomatic efforts on our part if the Administration was really interested. My guess is the truth is closer to the political side because if it were primarily refinery issues, the magic of the free market system would have solved that problem by now. Also, this seems eerily reminiscent of the California crisis in 2000 when it was clear the energy companies were constricting the flow to drive up prices.

 

We should give large tax breaks and subsidies, if needed, to Detroit, and tell them it's dependent on Detroit mass-producing hybrids. This could have a very real impact on consumption, and might help save our auto industry. I live in a suburb in Austin, one that seems "closer in" all the time, and I can tell you that there won't be any rail transit out here for the foreseeable future, and folks out here aren't going to ride buses, not the vast majority. I certainly agree with your sentiment, but we need to be realistic, as well. Change the kinds of vehicles Americans are driving, in order to lower energy consumption, and work on mass transit and hydrogen/electric solutions for a long-term fix.


Keep D&D Civil.

 

Another story...

 

that's the price of crude. not gasoline futures. they're related...but not entirely. you will see times where one goes up and the other goes down. there are other factors at play.

again..Shell is increasing the size of one of it refineries big time. but you're talking about corporations which are run by people who owe a fiduciary duty to their shareholders regarding the bottom line. they're not gonna deal with heavy regulation if it's not immensely profitable. not when they can keep supplies tighter and profit from that as well.

let's just nationalize the whole damn thing, and move on.

 

gasoline futures are directly related to crude futures. the price of oil goes up, the price of gas goes up, regardless. gas is oil, refined. its the biggest cost in gas of course gas futures are going up.

 

watch the prices day to day. they're not the same. gasoline futures will rise even though oil goes down...or vice versa. happens all the time. there are other considerations. particularly, how quickly can it be turned to gasoline to hit the market? what other factors are disrupting refineries' ability to meet demand? when you have no margin for error, one hurricane can mean a huge difference in price at the pumps.

 

This is what gets me ...if the cost of crude goes up, how is it that the oil companies are making record profits?

If I make furniture and the cost of wood goes up, how does that translate into me making record profits? I don't remember reading that chapter in Econ101.

Well, you say that the oil companies provide their own product, crude? If that is true, then why does everybody make such a big deal out of oil dependence from other countries?

Somebody with a bigger brain, please explain.

 

by the way...here's an article that suggested gas futures rose big time on news about refinery capacity issues:

http://www.infinitytrading.com/unleaded_gas_futures_report.html

Gasoline futures surged nearly 7 percent Tuesday on word of a large refinery snag, marking an almost 50-cent-per-gallon increase over the past month that is sure to send pump prices higher.

"We are looking at retail prices that will soon be above $2.50 gallon nationally, and could perhaps eclipse the $2.60 per gallon" level, said analyst Tom Kloza at Wall, N.J.-based Oil Price Information Service.

The average retail price of unleaded gasoline was $2.37 a gallon last week -- the highest level since November, according to the Energy Department.

Gasoline futures rose 12.27 cents to settle at $1.866 a gallon on the New York Mercantile Exchange. Brokers said the rally was sparked after Amerada Hess Corp. said Tuesday that over the weekend it unexpectedly shut a gasoline producing unit at a refinery in St. Croix that it co-owns with Petroleos de Venezuela SA. The spokesman said repairs to the unit, which refines roughly 150,000 barrels of crude per day, could take up to two weeks.

"I don't think anybody was expecting to see that at the start of the day," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York. "The gasoline market has been pretty strong recently anyway because we're getting into the peak turnaround season."

The so-called turnaround season is when refiners shut down their plants to perform maintenance ahead of summer, which is traditionally the busiest period for gasoline production. It often causes supplies to tighten and prices to rise.

A month ago, gasoline futures settled at $1.38.

 

because they own that oil, too. and they're not just in the United States selling it.

but i won't pretend to have a bigger brain, i promise!

 

I used to wonder this too, but its quite simple. the cost of oil is based on demand and supply. when demand is up, the price goes up, but the costs to the drillers are the same.

its just like any commodity, if the demand for corn goes up, the farmers of corn don't have any extra costs. they just clean up off the increased revenue.


that's why the issue with the refineries is b.s. to me. its the same concept. if refining pressure was so tight causing these refineries to make more money on the lack of supply, refiners would build more refineries because it would be in their best interest take advantage of that situation.


dependence on oil from other countries is a different subject.

 

texxx, obviously some House Republicans weren't sold on this plan either. What's the matter, GWB32 is such a career killer these days he couldn't convince them to go along with it?

 

More repub bellyaching.

 

Don't blame democrats. Blame weak republicans, who control congress, to get the law passed.

 

I'm still wondering why Republicans killed a Dem plan to lower gasoline taxes.

 

If only we had a transportation system like Curitiba, Brasil, bigtexxx would give up his F-150 and gas prices would plummet.

 

You know, with the amount of things you've blamed on the Democratic minority, it's got to be disconcerting to you how weak the Republicans apparently are. With control of both the House and Senate as well the Presidency, your party still can't get anything passed. How pathetic is that?

 

well for what its worth, oil and gas prices are sliding today on a report of supply growth.

 

But they don't want to build more refineries.

1) We are running at 88% of capacity. The other 12% is from plant maintenance and Katrina leftover. 100% capacity is optimum for profits.
2) It takes billions to build a refinery and most are spending their money on debt pay down.
3) Where are they going to build it? No one wants one in their backyard. Add more to TX City? There are strict restrictions on where you can build one even in an existing refinery area. And I'm sure if they could see a good return on their profits, they'd find a way to build one, but building one will strip them of billions in capital and may take them year to make that money back. They won't build one until it is good business and they can get a good ROE.
4) They've found that it is cheaper to expand current structures than build new. The problem though is that does disrupt the current process at that plant so it's not done without great consideration.

IMO - Building more refineries won't significantly help with gas prices now. But now when a hurricane season comes around, extra refineries would be nice as a cushion for when an area takes a hit. The problem is that the new plants would most likely be around hurricane alley (Corpus - Biluxi).