The real truth about the cost of oil in America today.

[AndyA]

We all know about the oil company mergers over the last decade or so. The oil companies say they must do this to remain powerful in a worldwide oil market. So, they merge and grow. It has happened so many times it's almost impossible to keep track of them all. Conoco/Phillips and Shell/Texaco are just two examples.

In the aftermath of these mergers, they've moved corporate headquarters, shuffling thousands of employees and their families from one city to another, which costs the company millions of dollars. And to cut costs, they close facilities, including refineries. 55 of them since 1990.

And now, due to supply and demand, the cost of gasoline has gone through the roof. Oil companies say refining capacity is maxed out, contributing to the supply vs. demand imbalance. So the oil companies make billions in profits. Yet they don't reopen the refineries. Why?

The big oil companies say that they must reinvest these profits to remain competitive, yet I hear very little about how they are reinvesting this money, unless they consider paying their CEOs a vulgar salary "reinvesting."

If refining capacity is one of the core issues with supply, why aren't these closed refineries being reopened to increase capacity? Because the oil companies like things the way they are right now.

The American people are being taken for a ride, and our current Republican-led Congress and Administration is allowing them to do it. Because they're all friends.

The truth is, they don't really care if it's a burden to you. They don't really care if you have to change your lifestyle or do without other necessities to keep the gas tank in your vehicle full. All they care about is how much money they can make.

After all, how many vacation homes are enough? How many cars are too many? How many private jet trips at the slightest whim are too much?

Think about that next time you fill up your tank, and wonder why no one seems to be doing anything about it.
____________________

(Some of the facts stated herein were presented in the House of Representatives last week, although I don't remember who presented them.)

[BlueEyedSon]

1. the truth is that refining capacity is not the bottleneck

and if that is not true right-at-this-moment it will be very soon, so they will not recoup the costs of reopening/rebuilding those "extra" refineries EVER.

[AndyA]

6. If true, by opening or reopening refineries, they would quickly prove the

statement that there isn't enough refinery capacity in the United States is just another lie. Then they'd have to come up with something else.

I think they want everyone to believe that the price of oil is completely out of their hands, and that they have absolutely nothing to do with the price at the pump, which I just don't believe. Especially after hearing about record earnings announcements every quarter.

[BlueEyedSon]

20. so why not let cars get bigger and China & India get middle class

lifestyles AND refine more gas. That all would equal even MORE profits, sooner.

The crude just can't be pulled up fast enough, even the Saudis have no "excess capacity" these days....

[LiberalEsto]

2. $13,700 an hour

That's what the CEO of Exxon/Mobil gets paid.

Notice I didn't say he EARNED it.

[AndyA]

7. How could ANYONE possibly be worth that much money?

What, specifically are they uniquely able to do that others can't? It's just mind boggling!

[LiberalEsto]

12. I didn't say he was worth it

just that he's managed to weasel his way into that heap of lunch money. I hope he chokes on it.

:evilgrin:

That's more than I make in a year. Of course my husband's paycheck is what pays most of the bills.

[paparush]

16. Its Hard Work

Raping the land and robbing the 'poor'.

[rman]

3. Certainly refining capacity is a factor - but not the only one.

It can be used to create an artificial bottleneck.
But the fact the refineries have been closed does not prove that another factor is not causing a natural bottleneck - it does not prove there's no such thing as Peak Oil.

My take on it is that Big Oil is creating the financial circumstances required for them to deal with Peak Oil:
Increased price of oil will make it worthwhile to exploit low yield sources such as heavy crude, tar sand and oil shale. And their current profits will allow them to deploy new technologies needed to extract and refine those sources. All this won't prevent decrease of production and increase of price.

[AndyA]

8. What could other artificial bottlenecks be?

Do you suppose they're intentionally taking their time repairing pipelines in Iraq, so that the oil supply from there is not enough to impact the world market?

Perhaps they're even sabotaging the pipelines themselves, and blaming it on terraists.

[rman]

11. Why do you ignore the natural bottleneck?

[AndyA]

17. Natural bottleneck as in peak oil?

I don't know who to believe. Some experts say we've reached peak oil. Some say it has happened already. Others say not yet. Who do you believe?

If this isn't what you meant, I've missed the subtlety of your point.

[rman]

21. you don't know who to believe - yet you draw conclusions

by presenting reduction of refinery capacity as the single cause of increased prices.

[natrat]

4. why do you think they pushed those absurd tax credits for suvs

[European Socialist]

5. yup, Dumya is letting big oil game the system. K&R

[underpants]

9. Texaco, Chavron, and Mobil internal memos here

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x1021779

[Sinti]

10. I do believe we have a winner! Chuck, tell him what he's won...

an all expenses trip to the reality of greed. They are taking advantage of what the market will bear, gas for us is like food, we need it to stay alive at this point.

If they are, as some would say, trying to make enough money to be able to "deal with Peak Oil," why are they pocketing so much of it. How much is going into R&D? Why do they still promote the driving of gas guzzlers? Nah, I can't believe in Peak Oil -- or at least, I can't believe they think they're going to suffer because of it. There is an increase in demand from China, India, and other developing nations that are finally getting over the curve, if you will. So they're going to burn the hell out of us, because we never built the infrastructure (public trans) to deal with what was an easily foreseen outcome.

I guess we're going to have to figure out how to fend for ourselves on this one, too. :( Only drive if you have to, get a bicycle, plant a garden if you can... may god have mercy on you if this continues at its current pace.

[rman]

13. If they increase prices just to make more profit, i'd not expect them

to tell us to use less of it.

Conserving at the urging of oil giants
http://www.chron.com/disp/story.mpl/business/steffy/3844989.html

Rex Tillerson, Exxon Mobil's new chief executive, has a surprising message for everyone who's upset about high gasoline prices: Stop using so much of it.

-snip-

"We just have to ask people to make sure they are using energy wisely," he told CNN. "Be efficient with it, don't waste it."

[Sinti]

14. Any capitalist would tell you decrease demand and the price will go down

This is the gospel of Adam Smith (who I truly believe would roll in his grave witnessing our current situation) Have you read the memos? They actually did reduce refining capacity to increase profits back in the day, not too long ago.

You can find them here.
http://www.consumerwatchdog.org/energy/fs/


Internal Mobil Memo Showing Effort to Reduce Refining Capacity

...read more

Internal Texaco Memo Showing Effort to Reduce Refining Capacity

...read more

Internal Chevron Memo Showing Effort to Reduce Refining Capacity

I would post some of the text, but they're images/scans of the docs converted to PDF. I'm not disputing that the "oil is running out," if you will, but they are hammering you for their own benefit.

[mdmc]

15. gas is not too expensive

we really need to change the course of our common, collective lives. We need to use less gas.

[Sinti]

18. Tell that to the guy who makes $8-$12 an hour and has to drive to work

because there's no public transportation. The same guy that has to live way out, because closer to his job the price of real estate and rent is far to high for his paycheck. :( We really need to realize that we actually have a common, collective life and create better ways of getting around.

[mdmc]

19. I am the person. Really.

Except that I don't currently have a job. Bottom line, we really need to change. There is an old Grateful Dead lyric, "Once in a while you get shown the light, in the strangest of places if you look at it right."

There is a lot that needs to change. Lower gas prices will never create change. It sounds like tough love, but it really is the truth. From pain comes growth. The sooner we change (carpool, advocate public transportation issues), the better.

I would also like to add a thank you for your advocacy of the working class. I think that your thoughts regarding the working class are honorable and worthy.

peace!