Flashback from 2005: Memos Show Oil Companies Closed Refineries To Hike Profits

[ck4829]

If you believe the oil industry's response to Katrina, you'd think demanding environmentalists are to blame for $3 per gallon gasoline because the tree huggers shut down refineries with tough new rules. President Bush even mimicked the industry excuse by waiving environmental standards in the wake of Katrina. Well, the industry's own internal memos show the intentional shrinking of American refinery capacity in the 1990s was the oil companies' own idea to pump up profits.

Take this internal Texaco strategy memo: "(T)he most critical factor facing the refining industry on the West Coast is the surplus of refining capacity, and the surplus gasoline production capacity. (The same situation exists for the entire U.S. refining industry.) Supply significantly exceeds demand year-round. This results in very poor refinery margins and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline." The memo went on to discuss a successful campaign in Washington State to shrink refined supply by removing other additives in the gasoline that filled gas volume.

Another Mobil memo shows the company promoted tough regulations in California to shut down an independent refiner. A Chevron memo acknowledged the industry wide need to shutter refineries and discussed how refiners were responding in kind.

Large oil companies have for a decade artificially shorted the gasoline market to drive up prices. Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty. It's time for government to regulate the industry's supply. The fact that President Bush received $2.6 million from the oil industry for his reelection in 2004 should make regulation of the nation's gas supply one of the Democrats' most important talking points.

http://www.huffingtonpost.com/jamie-court/memos-show-oil-companies-_b_6980.html

[nytemare]

1. And now, the price of everything goes up, inflation is up

The dollar isn't worth squat. Profit margins for oil companies are higher than ever. The average American citizen is suffering. People are getting laid off because average people can't afford the products that these average companies sell.

It is all spiraling downward because of high fuel prices.

[dkf]

2. Refiners aren't the problem now.

Look at refining margins, take a look at a chart of an independent refiner...VLO, TSO, FTO. They are not doing very well lately.

Next take a look at the cost of a barrel of oil.

Refiners don't do well when oil is expensive because they have to buy the oil they refine.

[acmavm]

3. Of course they did. Informed Americans know this, our 'representatives'

know this. But when the lies start rolling off the tongues of oil company propagandists, no one speaks up and says a word for the American people.

We are the old USSR.

[ladjf]

4. The fix is in and has been for years.

If the U.S. would press to provide 15% of their energy needs from alternative sources, i.e. wind, solar, geothermal and tidal, the price of oil would drop to $60 a barrel and the monopoly would have been permanently broken. That 15% goal is absolutely doable. If fact, within seven or eight years, we could be beyond that.

With the oil monopoly broken, there would be a major power shift away from the criminals who are now extorting the world because of their monopolistic advantage.

[Individualist]

5. K&R

[Subdivisions]

6. Isn't it strange that the links to these so-called memos at

the links referenced in the article are not valid?

I read that refineries were closed for various reasons including environmental regulations preventing upgrades to process heavier, sour oil, they could not refine oil with higher sulphur content, or the refineries were to old and not worth upgrading in lieu of the need for more modern refining technology.