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Gas Price Surge Under Bush Follows Unchecked Refinery Mergers

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Ichingcarpenter Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 01:33 PM
Original message
Gas Price Surge Under Bush Follows Unchecked Refinery Mergers
May 17 (Bloomberg) -- President George W. Bush allowed an increase in oil refinery mergers to go unchecked since he took office and may have contributed to the highest gasoline prices in 20 years as the November election approaches.

The Bush administration approved 33 takeovers totaling $19.5 billion, on top of 21 deals worth $7.3 billion under President Bill Clinton, Bloomberg data shows. Reduced supplies were already pushing up gas prices in Clinton's term, according to a Federal Trade Commission study conducted after pump prices rose to more than $2 a gallon in Milwaukee and Chicago in 2000.

``We're in a much worse position than we were when the federal government broke up the Rockefeller oil companies of the early 1900s,'' Jon Meade Huntsman, a registered Republican and founder of Salt Lake City-based Huntsman Co., the largest privately held chemicals maker, said in an interview. ``The average guy on the street is getting killed because this administration does not care.''

Refiners Benefit

Under Bush, the FTC hasn't tried to block any proposed refinery takeovers. During Clinton's eight years in office, the government sued once to block an oil industry merger. In February 2000, the FTC sought to stop BP Plc's $33.1 billion purchase of Atlantic Richfield Co. after concluding the combination could lead to higher prices of oil pumped from Alaska. BP completed the purchase in April 2000 after agreeing to sell oil fields in Alaska and terminals and pipelines in Oklahoma.

The rise in gasoline prices helped refiners generate the highest margins from refining crude oil into gasoline and other fuels in the first quarter since at least 1990. ConocoPhillips, the largest U.S. oil refiner, last month posted its biggest quarterly profit since the 2002 acquisition that formed the company. ChevronTexaco Corp., the second-biggest U.S. oil producer, said earnings rose 33 percent to the highest level since a 2001 merger formed the company. Chevron's first-quarter refining profit doubled.

From 1993 to 2003, the market share of the five-biggest U.S. refiners grew from 35 percent to 52 percent, according to Public Citizen. For the top 10 refiners, market share rose from 56 percent to 79 percent. The Consumer Federation of America says 77 percent of the market on the East Coast and 67 percent on the West Coast were controlled by the top four refiners as of 2000. Between 1977 and 2002, the number of U.S. refineries dropped to 153 from 282. Refining capacity over that period has increased 2.4 percent to 16.8 million barrels a day from 16.4 million barrels a day, according to the Energy Department. U.S. demand for gasoline has grown 27 percent in that period.



http://www.bloomberg.com/apps/news?pid=10000103&sid=aI4...

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magellan Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 01:42 PM
Response to Original message
1. This is the first I've heard about this
Deregulation and the "free market" strike again. When are Americans going to figure out that it's the corporatists on both sides of the aisle that are destroying us?

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Ichingcarpenter Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 01:45 PM
Response to Reply #1
2. Look who started it, that was my surprise
The mergers and acquisitions allowed this thing to get out of control.
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magellan Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 02:04 PM
Response to Reply #2
5. You mean BC
Five years ago (before I found DU) that would have surprised me. I voted twice for him. But I've since learned that much of the good he did was undermined by his pro-corporate decisions: undoing the Fairness Doctrine, approving NAFTA, repealing Glass-Steagall...and now this.

IMO, just because the effects take longer to realize that doesn't make corporatist Dems more desirable than in-your-face corporatist Repubs. Seems to me a lot of what Clinton did only greased the skids for Bush**, who's taken FULL advantage and then some.
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Ichingcarpenter Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 02:11 PM
Response to Reply #5
6. Yep




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aint_no_life_nowhere Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 01:49 PM
Response to Original message
3. A Chimp's fingerprints are all over this gas crisis
And how about the Chimp's policy of allowing the U.S. dollar to crash? Bush has pursued a policy of cutting interest rates to the bone by pushing the Federal Reserve because his government has had to borrow more and more to fund his military adventures. The result is a dollar that has lost more than half its value since he took office and a dollar that doesn't buy half as much as it used to on the international market, including oil.
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SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 01:50 PM
Response to Original message
4. "Smirk." - Commander AWOL
Edited on Sat May-24-08 01:51 PM by SpiralHawk
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Igel Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-24-08 10:19 PM
Response to Original message
7. The article's from 2004. n/t
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