NYT: Gas Prices Rise on Refineries’ Record Failures

[babylonsister]

http://www.nytimes.com/2007/07/22/business/22refine.html?_r=2&hp=&oref=slogin&pagewanted=all&oref=slogin

Gas Prices Rise on Refineries’ Record Failures


By JAD MOUAWAD
Published: July 22, 2007

Oil refineries across the country have been plagued by a record number of fires, power failures, leaks, spills and breakdowns this year, causing dozens of them to shut down temporarily or trim production. The disruptions are helping to drive gasoline prices to highs not seen since last summer’s records.

These mechanical breakdowns, which one analyst likened to an “invisible hurricane,” have created a bottleneck in domestic energy supplies, helping to push up gasoline prices 50 cents this year to well above $3 a gallon. A third of the country’s 150 refineries have reported disruptions to their operations since the beginning of the year, a record according to analysts.

There have been blazes at refineries in Louisiana, Texas, Indiana and California, some of them caused by lightning strikes. Plants have suffered power losses that disrupted operations; a midsize refinery in Kansas was flooded by torrential rains last month.

American refiners are running roughly 5 percent below their normal levels at this time of the year.

“You have a system that is taxed to the limit,” said Adam Robinson, an energy research analyst at Lehman Brothers. “This is what happens when spare capacity is eroded.”

more...

[Selatius]

1. What do they propose? More oil refineries?

If supply kept up with demand, gas prices would be lower, thus slimmer profit margins per unit of gasoline sold.

[babylonsister]

2. I don't know but it seems as if we're paying because they screwed up, and

we have absolutely no recourse.

[RC]

3. Who says they are screwing up?

Their obscene profits are even higher because of these so called screw ups. It should be so easy for the rest of us.

[Selatius]

4. Well, for some reason the CEOs of Exxon-Mobil, Chevron-Texaco, and others don't see any need to...

build more refineries. Unless, of course, they want the federal government to foot the bill on building more refineries. In which case, the federal government gets us, the taxpayer, to pay for something they could've paid for themselves through their own yearly profits.

I think it's because of what I said earlier. It doesn't make sense to do something that actually decreases profit margins, like building more refineries to meet demand.

[babylonsister]

6. They're not even competent enough to keep the refineries they have

working, and we pay for it.
Compare that to an airline, with all their challenges. If a plane has maintenance problems, the airline is required to put people up in hotels, reschedule flights, etc., until that plane is fixed or another one found. Seems as if responsibility is built into these rules. I wish that were the same for the oil industry, with their huge profits. Let them fix their problems and don't make it our problem.

Whistling in the wind, I know, but it irks me.

[mod mom]

8. Intentional incompetency=larger profits. Just like the current administration.

[entanglement]

5. The increase hasn't hit retail prices (yet)

http://66.70.86.64/ch.gaschart?Country=Canada&Crude=f&Period=1&Areas=USA%20Average,,&Unit=US%20$/G

[tecelote]

7. Pure Greed!

We're talking about companies with the highest profits of any company ever.

The refinery rationale is bull. They just want more profits at our expense.

Corporate Profit. That is what America is about.

That's why nothing makes sense anymore. We're trying to justify greed with morals and ethics. 'Doesn't work. Morals and ethics have nothing to do with America anymore. Profit reigns supreme.

[Subdivisions]

9. Peak Oil spin continues.

Refineries catch fire because they are not designed to handle heavier sour crude oil which has a higher sulfur content and produces sulfuric acid as a byproduct.

New refineries are not being built because they cost billions and take years to build. Oil companies and refiners will not build a refinery they know will never see enough crude to turn a profit because by the time a new refinery can be built, the Oil Age will have ended. Edited to add: A new refinery is about $15 Billion and takes up to 15 years to bring online. ExxonMobil alone is approaching record revenues of nearly $200 Billion this year (Someone correct me if I'm wrong on that but I'm sure even if I'm wrong and it's less, it's still plenty to build a new refinery). With profits like that from gasoline, indeed, why wouldn't they build one? Because, as far as oil is concerned, if they build it, the oil will not come.

I posted this story to PeakOil.com http://www.peakoil.com/fortopic30857.html">HERE. Also, if you want to know about the situation with oil, don't listen to the people whose best interests are not served by your knowing. Listen to petrogeologists and industry analysts at http://www.theoildrum.com">TheOilDrum.com who've made it their business to find and then tell us the TRUTH!

[Toasterlad]

10. Is Anyone Buying This Shit?

[libertypirate]

11. Not a bit... sounds like engineering mistakes

aka. plausible deniablity

You know like many things that occur around * type people...

If it was your business that was failing could you so easily bilk your customers for the costs...