AP Analysis: Firms Crimping Oil Supplies

[lindisfarne]

http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=ap&src=601&news_id=ap-d8lkf8a80&date=20061125
Saturday November 25, 8:55 PM EST
<snip>
That's why the rumor sounded so wrong here in California's lower San Joaquin Valley, where petroleum has gushed up more riches than the whole gold rush. Why would Shell Oil Co. simply close its Bakersfield refinery? Why scrap a profit maker?

The rumor seemed to make no sense. Yet it was true.

The company says it could make more money on other projects. It denies it intended to squeeze the market, as its critics would claim, to drive up gasoline profits at its other refineries in the region.


Whatever the truth in Bakersfield, an Associated Press analysis suggests that big oil companies have been crimping supplies in subtler ways across the country for years. And tighter supplies tend to drive up prices.

The analysis, based on data from the U.S. Energy Information Administration, indicates that the industry slacked off supplying oil and gasoline during the prolonged price boom between early 1999 and last summer, when prices began to fall.
more at link

[William769]

1. Is there any kind of pressure the new Congress put on these companies?

[Kagemusha]

2. I'm sorry, what do you expect here?

What's Congress going to do, FORCE them to build and operate refineries? Their ideology of capitalism does not come with a moral responsibility, nor the laws of the nation with a legal responsibility, to keep increasing the number and quality of refineries in the face of what was a historic production glut. If building refineries is going to lose these corps money, what power is going to MAKE them build more? The financial incentive is what has them in business in the first place. It's not an anti-trust issue because it's not conspiracy - they can explain their actions up front and to your face by saying that they aren't going to pour money into loss operations. So I don't know what everyone expects of them.

[William769]

4. Take away their tax havens for starters I would think.

[Kagemusha]

5. Well I'm not saying that's a bad thing but, it's 100% separate

It has nothing to do with making anyone build refineries. And likely wouldn't lead to such a result.

[KSU Wildcat]

6. You took the words out of my mouth but

you stated it much more eloquently than I could. It is their oil and their refineries.

[Trajan]

10. It isnt 'their' oil ... its OUR oil .....

[KSU Wildcat]

13. What??..... that is debatable but

what is not debatable is the refineries. It is their refineries and they can run them as they choose.

[Trajan]

17. I have no problem ....

Using the power of Eminent Domain to take control of refineries, oil fields, distribution centers, et al, so that the AMERICAN PEOPLE can recapture their rightful claim to the minerals in their domain. Its time for the petrochemical corporations to STOP raping the american people ....

As I said in another post: IF it's 'ok' for a government owned organization from Dubai to run the nations ports .... then how can it NOT be ok for our own government, on behalf of it's citizens, to operate the nations refining operations ? .... Why the double standard ?

While I completely agree with a regulated capitalist economic model, I believe some sectors, energy, health care, etc, should be controlled by the government on our behalf, with the operations activities put out to bid so private companies can bid for the work on a fixed cost basis ....

It is absurd to allow a tiny sector of the population to reap astronomic profits from the rest of the population, selling them products that actually belongs to THEM in the first place ....

Perhaps, at least, VERY strict price controls should be slapped onto these gouging, UNpatriotic theives ... along with a steep windfall tax ...

This private greed is sucking our nation's wealth .... It would be RIGHT to redirect that wealth back to the citizens who actually own this land .....

[Trajan]

9. I expect us, as a nation, to take control of those operations ...

and hire Exxon-Mobil, Shell, BP or any of the others to subcontract, for a fixed price contract which is won in open bidding ....

Its time WE take control of our resources through the power of the legislature ...

If it belongs to us in perpetuity, then why dont WE have a say in the production of those resources ?

[Demeter]

14. Nationalize the Refinery and Operate It

Or let California do so, with eminent domain (a legitimate use of the procedure).

Help the workers buy it and operate it as a co-op.

Any number of ways to stop this foolishness.

[kestrel91316]

3. The sollution is not more OIL production or OIL refineries. The

solution is diversification with increasing use of renewables and decreasing use of fossil fuels, particularly those from unstable regions.

[gratuitous]

7. Ron Wyden, Senator of Oregon, has been pushing on this

Of course, as a Democrat, he hasn't had the gavel to convene hearings or put anyone under oath. That should change come January.

My recollection is that the oil coming out of the south end of the Alaska pipeline was supposed to be for the American market. However, for years the oil companies have been selling it to the Asian market, where they can get a better price. Much of the oil has also been extracted from public lands, and the royalty payments have been a bit, shall we say, slow. Considering the profits that have been announced for the last several quarters, it's doubtful the oil companies will be able to successfully plead poverty if the Senate comes calling on them.

[Trajan]

11. Hooray for Ron ....

Enough of the lying and cheating .... Its OUR damned oil ....

[Trajan]

8. If the nationalization of Iraq's oil industry makes sense ....

Then WHY doesnt it make sense here ? ....

IF using oil profits to boost the development of infrastructure makes sense in Iraq, then WHY doesnt it make sense here ? ...

If awarding the control of our nation's ports to a 'government-owned entity' in Dubai makes sense, then WHY doesnt it make sense for the US to do the same thing ? .... In health care ? .... in Education ? ....

The national resources in our land belong to ALL of us, not just the rich .... WE should be getting a piece of that action, but the GOP (and some in the Democratic Party) have GIVEN BACK the paltry sums which we used to receive as royalties ... WE subsidize the exploration of potential fields, and THEY take that money, locate deposits, TAKE what isnt theirs, and pay us back ZILCH ! ....

They TAKE and TAKE and TAKE, and never return .... All they return is deception, price manipulation and greed ....

Tell me WHY it doesnt make sense for the american people to nationalize the energy sector, the health sector, and the education sector ? ....

[yurbud]

12. if they want to crimp supply, we should look at higher royalties for the oil they suck out of our

ground.

I will now await the GOP shill reply that oil companies will simply pass that cost on to consumers.

[tom_paine]

15. No surprises here. This confirms the obvious. 55% of us are correct.

Big Oil has always been corrupt and manipulative. But since the Bushevik rise, let's just say that Big Oil's corruption has increased along with the rest of the Bushevik side of the nation.

[Igel]

16. The refinery under discussion was

previously--and yet again before that--under discussion. Note that as soon as the writer gets to the refinery as exhibit A, all mention of dates stops.

It was probably all settled in spring '05.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/01/11/BUGQ9AO59V1.DTL&type=business

The rest is of a piece.