[threadbear]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('threadbear', '
')The fact that refiners are actually shutting down refineries, and not building new ones, while they consolidate and make record profits, supports the criticism of "free market" corporate control of essential good and services, (certainly for the sustainable long term).

[jaws]

$this->bbcode_second_pass_quote('threadbear', '
')Untrue.

[CARVER]

$this->bbcode_second_pass_quote('jaws', 'I')t is human to steal? It is also human to kill. We have outlawed them for a good reason. They are bad for the peaceful order of society.

...

Obviously everyone has to pay taxes. The issue is not how much taxes should be paid but what they should be used for. If the rich pay more taxes (which they will always one way or another) but taxes are used to pay for institutions that benefit them as well as everyone else, that is not stealing. They directly benefit. But if the rich are taxed so that their income can be handed to the poor, that is not benefit to the rich and it is stealing.

[nth]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('threadbear', '
')Untrue.

[nth]

$this->bbcode_second_pass_quote('CARVER', '
')You could do it in a bit more peacuful way by taxing the rich and giving it to the poor. That way you don't have to actually go through the fight. You could also say the rich have to pay more tax for maintaining order, prevent killing and stealing. One way to do that is to give some of that tax money to the poor, to discourage them to take the risk of a fight (because there is now less need for it). You just give them enough to discourage them. And you could give them an incentive to do some useful work.

[jaws]

$this->bbcode_second_pass_quote('nth', 'J')aws,

first, refineries are making higher profits than they did in the past, especially the ones that can process sour/heavy.

second, the spread in price between sour/heavy and sweet are larger than in the past 10 years.

third, shortage of sweet crude have push prices up and we don't have a shortage of sweet crude oil refineries. We have ample capacity of sweet crude. Actually, not in US, but other countries.

[jaws]

$this->bbcode_second_pass_quote('nth', 'I') know several dot com people who did not contribute to society for the money they made. They were just there at the right time and right place. After all, some of my friends are just admins and facility managers. They did the same thing for 40-60k a year at other companies. They sure don't believe they worked harder for their millions.

[jaws]

$this->bbcode_second_pass_quote('CARVER', 'B')ut are we not allowed to compete over resources? And in this case compete, could also mean actually fight for it (not with money). You can consider it stealing, but you could also say you didn't work hard enough to defend your resources, so you did not earn it. Stealing resources is also work which pays off if you are good at it, does the entire society benefit from it, I doubt it, but part of it does.

[CARVER]

Jaws,

I'm guessing exchanging money in return of not getting killed/robbed does not count, even though both parties agree on it voluntarily. You could see it as selling a live which you do not own. But you could also see it as a service you provide: not killing or robbing, which people are willing to pay you for voluntarily.

I do not believe the poor will be able to overthrow the rich, but why not try if they have got a lot to lose by not doing so. The rich probably won't want to do the dirty work themselves, so they will hire people to provide security/protection. So now the rich still end up giving money away (to pay for security), they might as well have given that money to the poor so they would not try to attack/steal from them in the first place.

People like the things like security that civilization provides. But if you are not able to get the necessities within the rules of civilization and you are facing death, then suddenly civilization provides you nothing, it is actually benefitial to not live up to the rules. You could prevent your death by braking the rules. So society must prevent people from ending up in such a situation, but how do you do that? I think to do that you have to give those people their basic needs (or money so they can buy them), or give them an opportunity to work for these things. So in some way the rich still end up paying for those people.

Lets say there is a limited supply of clean water. A rich guy outbids the poor people for that supply (to fill his pool). The poor people now have no drinking water and know they will die soon. The poor people have nothing to offer the rich guy that is of value to him. Those poor people will now do anything to get some drinking water. Anyone who tries to stop them might get killed. Civilization could collapse. The rich have the most to lose from that, and they can do the most to prevent it from happening (giving away money or resources) to them, maybe by giving them a loan so that they might even get something of it back, (and maybe prevent that they will become rich and start competing with them over limited resources).

How else can you maintain civilization? Those who can, need to work/pay for those who otherwise would not get their basic needs. Otherwise those people will turn to their natural survival instincts.

[nth]

$this->bbcode_second_pass_quote('jaws', 'S')o for sweet crude the refinery shortage is bunk, and the claim that refineries are making excessive profits is as well. The many refineries are bidding up the price and passing on the additional costs in the form of higher gas prices.

[jaws]

$this->bbcode_second_pass_quote('nth', 'S')ince 1980. Sour Crude refining has historically been more profitable than sweet for US refineries, except in the 1990's when Western African sweet crude plummet the market and when sweet crude dropped into the low teens.

[seahorse]

Jaws,

Contrary to your earlier statements: (1) there is a refinery bottleneck and (2) Refineries are making record profit margins - see the ICF report on a refinery capacity crunch. I started a thread on it in the Peak Oil Discussion forum.

As for a refinery bottleneck, the ICF report states the world is operating at 100% refinery capacity right now (which is what Boone Pickens has been saying) and that refinery profit margins are at all time highs. ICF concludes this refinery capacity crunch will continue through at least 2010 and possibly out to 2020, bc no new refineries are being built.

Using IEA numbers, ICF says the world would need another 9mbpd new capacity by 2010 to meet estimated world demand for oil. However, very few refineries are being built (notes only 2 I think). It points out Saudi Arabia and a few other countries are talking about building some refineries, but those are even in the engineering stage and with the long lead times, will not be on-line by 2010. In fact, the recent Saudi press release that they are building some more refineries states they won't be on-line until 2011 and will only add 2.4 mbpd new capacity, which is still way short of the 9 mbpd needed to meet world oil demand for 2010.

[jaws]

I read your other thread but I didn't see anything in it about profitability being higher. I don't dispute that refinery capacity is at 100%, and that supplies are tight as a result. What I dispute is that refinery profitability is well beyond its historical average. If it were true then mothballed refineries in the U.S. would be reopened to take advantage of the higher profitability. They aren't because the money isn't there.

It isn't enough to say that refineries are making higher profits, you have to specify what kind and where. More refineries in the U.S. are not going to do any good, that's why there have been less and less refineries for the past 29 years.

[seahorse]

You ended by saying it wouldn't do any good to build anymore refineries in the U.S. I suspect your right, but don't have anything to back it up other than what Boone Pickens is said, bc of peak oil. Pickens has said the reason the world's refinery capacity is basically 84 mbpd is bc that's all the oil that's out there. He may be right. One things for sure, we will have a refinery capacity issue from now until 2010, and that was even before the hurricanes.

[jaws]

But if there isn't extra oil we don't have a refinery issue. We have an oil issue that appears to be a refinery issue. That is why we must clearly identify the profitability of refineries compared to their historical average, classified by location and type, before we reach a conclusion that the solution to the problem is more refineries.

[seahorse]

I think I'm agreeing with you, that the lack of refinery issue is proof positive that there is a lack of oil issue. It would defy capitalism to believe that refiners wouldn't be building many more refineries if they believed IEA projections for oil demand and production growth from now until 2025. Since no new refineries are being built, it seems pretty clear the refineries don't believe this projections, and this is what Pickens is saying also.

[caysal]

From The Morning Call -- October 1, 2005











Article Options
Email Print Comment RSS

Refiners capturing biggest part of rise in gasoline prices
Law of supply and demand is in play and producers benefit.

By Justin Blum
Of The Washington Post

WASHINGTON | When the average price of a gallon of regular gasoline peaked at $3.07 recently, it was partly because the nation's refineries were getting an estimated 99 cents on each gallon sold. That was more than three times the amount they earned a year ago when regular unleaded was selling for $1.87.

The companies that pump oil from the ground swept in an additional 47 cents on each gallon, a 46 percent jump over the same period.

If motorists are the big losers in the spectacular run-up in gas prices, the companies that produce the oil and turn it into gasoline are the clear winners. By contrast, the truckers who transport gasoline, the companies that operate pipelines and the gas station owners have profited far less.

The spikes caused by Hurricanes Katrina and Rita — which heavily damaged oil production and refining in the Gulf region — accentuated gains the refiners and producers already were enjoying over the past year. Exxon Mobil Corp., the Irving, Texas, behemoth that produces and refines oil, reported in July that its second-quarter profit was up 32 percent, to $7.64 billion. Analysts expect Exxon's profit to soar again this quarter.

The rapid run-up in prices at the pump when Katrina hit — and their slow decline — has infuriated drivers, many of whom complain that oil companies used the storm as a pretext for boosting prices and profits. Politicians echoed that sentiment and are calling for investigations of the oil industry.

But interviews with analysts, consumer advocates and participants in the oil markets indicate that typical market forces were at work in the price run-up. Commodities markets that determine prices for gasoline moved dramatically higher after Katrina struck the Gulf region and damaged refineries and oil production. (The effect of Hurricane Rita on refiners' profits remains to be seen.)

Rising pump prices and company profits have caused lawmakers on Capitol Hill to seek legislative changes. Sen. Byron Dorgan, D-N.D., has introduced a measure that would tax some oil company profits that are not devoted to exploration and development of new production.

''They obviously are experiencing windfall or excess profits,'' Dorgan said of the big oil companies. ''They are … profiting in an extraordinary way at the expense of the American consumer.''

Some environmental and consumer advocates are urging the government to lower oil company profits in another way. They want to reduce demand for gasoline, which has been growing in recent years, by requiring vehicles to get better mileage.

Others have called on the government to set gasoline prices, as it did several decades ago.

Officials representing some oil-importing countries complain that oil companies, including those controlled by foreign governments, have not spent enough money on new exploration and development, leading to tight supplies of oil. Consumer advocates say mergers in the refining business have diminished competition and made it easier for the companies to limit supplies of gasoline and extract higher prices.

Refiners say they are spending heavily to expand and that their industry should not face new taxes or other penalties. ''Refinery capacity is being added, but the problem is that demand has outpaced capacity,'' said Mary Rose Brown, a spokeswoman for Valero Energy Corp., a San Antonio refining company.

Hurricane Katrina shocked already-tight markets for crude oil and gasoline. It reduced oil production in the Gulf of Mexico and caused the shutdown of nearby refineries, crimping supplies of crude oil and gasoline. Traders on the New York Mercantile Exchange responded by bidding up prices for both commodities.

That influenced oil sellers and buyers who negotiate prices in an informal spot market conducted by phone and instant computer messaging. Producers cut deals with refiners to sell oil at a higher cost, pegged to the rising prices on the exchange.

For a company like Exxon, producing a barrel of oil from an existing well costs about $20, according to analysts. When the selling price rises above that, the increase is almost all profit, they said. After Katrina bore down on the Gulf Coast, the price of oil set a new high, approaching $70.

Refiners processing the oil into gasoline faced lucrative market conditions. They may have had to pay the producers more for the oil, but they were able to sell their gasoline for higher prices as a result of the short supply and the spike on the mercantile exchange. In their view, the increases were justified because the market dictated that their final product — gasoline — had risen in value.

[threadbear]

$this->bbcode_second_pass_quote('seahorse', 'I') think I'm agreeing with you, that the lack of refinery issue is proof positive that there is a lack of oil issue. It would defy capitalism to believe that refiners wouldn't be building many more refineries if they believed IEA projections for oil demand and production growth from now until 2025. Since no new refineries are being built, it seems pretty clear the refineries don't believe this projections, and this is what Pickens is saying also.

[threadbear]

From the Taipei Times:


For example, the US Senate last year questioned why the Federal Trade Commission had not really regulated gasoline suppliers' behavior in following each other with reciprocal price moves.

Jenny said that in a transparent market with only a few players, tacit agreements are often reached between companies as to when and how much prices will be hiked.

In addition, since oil distributors are highly integrated vertically, the costs for oil refining, distribution and retailing are hard to segment and therefore it is extremely difficult to unearth evidence of law-breaking and spot hidden extra profits.

http://www.taipeitimes.com/News/biz/arc ... 2003268505

[threadbear]

Jaws, Read it and weep--Free market competetive dynamics? You sure?

The memos from Mobil, Chevron and Texaco show the following:

* An internal 1996 memorandum from Mobil demonstrates the oil company's successful strategies to keep smaller refiner Powerine from reopening its California refinery. The document makes it clear that much of the hardships created by California's regulations governing refineries came at the urging of the major oil companies and not the environmental organizations blamed by the industry. The other alternative plan discussed in the event Powerine did open the refinery was "... buying all their avails and marketing it ourselves" to insure the lower price fuel didn't get into the market. Click here to read the Mobil memo.

http://www.consumerwatchdog.org/energy/pr/?postId=5110