Record failures at refineries raise gas prices
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There was a "fire" at the ESSO refinery here in February, and a rail worker strike, which sent gas prices from 77 cents/L up to $1.00. The damage was repaired and the strike was over after six weeks, but gas prices remained exactly the same, and still remain the same to this day.
That seems to be pretty much the norm. The least little hiccup will drive the price up, but nothing seems to bring the price back down.
I suspect the only thing that will make a significant dent in gas prices now would be for the price of crude to fall out the bottom, down to something like $40 to $50 a barrel.
I suspect the only thing that will make a significant dent in gas prices now would be for the price of crude to fall out the bottom, down to something like $40 to $50 a barrel.
Then there will be oil field "fires", strikes etc.
*ouch* something keeps gouging me....
When you can't build new facilities and you have to keep the old stuff running that's what happens. The environmentalists have determined that new refineries are not going to be built. They are taking care of us. They are good people and they want the rest of us to be good people just like them. There have been shutdowns in California and the price of gas already in the ground at gas stations has gone up. Every time there is a shut down they make more money and do less. Sounds like a good deal to me.
Lonnie,
I agree with you on a lot of things, but not this one.
Environmentalists have views. Environmentalists can organise petitions and protests and what not.
They do NOT decide what gets built or not.
They don't reject DAs etc. that is decided by theLocal/State/Fed Govts. who have the authority to make the decision.
A petroleum company can take the "easy" way out, not building costly infrastructure and causing the current end user pricing crises, while citing "Environmentalists" as the reason for our pain.
If the petroleum industry genuinely wanted these new refineries, then nothing would stop them from building them, and you'd be hearing constantly about them challenging every decision.
The gasoline stations probably are trying to resist passing on the price cuts they are getting. Given it time. Prices vary with seasonal trends and the gasoline stations in your area will be unable to maintain the present prices indefinitely, unless the actual cost of the gasoline rises, in which case as their profits get pinched, you will start to see additional increases in the price, but that would still be the result of seasonal trends.
There are plenty of oil wells, and plenty of gas retailers, but the limited number of players at the refinery level thwarts free market competition, for any given locale.
Shannow, you might be wrong on this one. The environmentalists have a lot of money and lobby for their goals. Many of the things they support are not founded on science. They choose a cause and throw a lot of money behind it and many times they cause more harm than good. Here's an example. I have a shop with a spray booth for painting cars. It is a modern booth and passes all requirements and has been inspected and approved. We have even done some extra things suggested by my insurance company and their rep has been here and said he was impressed with the setup. I was going to tear down the part of the shop that contained the booth to build a new facility because I wanted to clean up the land below the slab and do some other things to clean up a building that was built during WWII. An environmentalists group protested to the city and the upshot was that I could rebuild but could not re-install the paint booth. The reason? Burroughing owls. I hired a bird expert, a consultant to many zoos and I guy heavily involved in saving bird species to come and look at the problem. He said the owls were chased out during the 50's when the area, after WWII was populated and the nearest owls were over 20 miles away and they would never live in this area again because the type of habitat they likes was destroyed. He said that there are more owls now then back then and they are doing fine. I'm seven years into trying to rebuild and in fact clean up the ground under the slab but can not proceed because of these environmentalists. Their cause is good, their science is lacking. They have never done a study. They have made up their mind with not one qualified person in their group. They would not except the report because it was paid for by me. They claimed I bought this person. That is a completely unfounded statement. This man would not sell his reputation and career for a couple of thousand dollars. When you confront these people with logic they replay with hatred and character assignation. They claimed I was only interested in my selfish agenda and did not care for the welfare of the natural habitat and nature's animals. They ignore the fact that I'm cleaning up the ground around the shop and that I'm excepting the fact that I will have to honor the latest building codes with the new construction. Several of us land owners/business owners have a plan to rebuild and remove soil and start over but we are blocked by these people. They now come out here and check on us. Five years ago they had a picnic on the land behind the shop, our private property, to celebrate the owls. They [censored]ed in the bushes and left trash that we cleaned up. They have blinders on. These people are very dangerous. There is a world of responsible business owners out there. They should go after real violators. You have to remember that they are more important than you. you must go to them to ask how you should live, and they will tell you. Misguided money is vary dangerous.
Kestas
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Lonnie, that's outrageous what they've done to your shop.
I wonder what these same people do when THEIR car gets into a fender-bender?
I wonder what these same people do when THEIR car gets into a fender-bender?
This line of thinking only gets you (them) so far. If one party chooses not to add capacity, their competitor will and they will loose market share. That's how the system works. With prices high everyone who has gas to refine will want to refine as much as they can to maximize their revenue.
But is there enough healthy competition in the refining business? I don't know and this is a good question. If the system doesn't correct itself in another few years, the answer is probably "No".
Burrowing owl link with a recent survey is below. You should be able to find a map of your area to see if it has owls.
http://www.birdpop.org/burrowing.htm
http://www.birdpop.org/burrowing.htm
Lonnie, that's preposterous that the government is putting the environmentalists propaganda ahead of your documentation.
But it's not the environmentalists stopping you, they have no power over you...the people regulating your development are the ones stopping you.
If you had unlimited funds (which oil essentially does at present, with record profits), you'd win. Or build the facility somewhere else or whatever.
But as a small guy, you have to pick your battles, and fighting could cost you way more than that aspect of your business is worth.
If oil companies genuinely wanted to build more refining capacity, nothing would stop them from convincing legislators, and ultimately the courts) that what they are proposing is acceptable, and ultimately be allowed to do it.
Environmentalists can only lobby/petition, they do not directly control us.
But it's not the environmentalists stopping you, they have no power over you...the people regulating your development are the ones stopping you.
If you had unlimited funds (which oil essentially does at present, with record profits), you'd win. Or build the facility somewhere else or whatever.
But as a small guy, you have to pick your battles, and fighting could cost you way more than that aspect of your business is worth.
If oil companies genuinely wanted to build more refining capacity, nothing would stop them from convincing legislators, and ultimately the courts) that what they are proposing is acceptable, and ultimately be allowed to do it.
Environmentalists can only lobby/petition, they do not directly control us.
We're moving back the the days of Standard Oil.
They choose NOT maintain their infrastructure and make record profits?
The less product they make, the higher the prce. If there's only one refinery every 500 miles, it's very easy for them to agree not to compete with eachother.
Quote:
They choose NOT maintain their infrastructure and make record profits?
You have every reason to be suspicious.
Taking the business journal view of this, keep in mind that five years ago prices were so low that few projects were justified. There was no perceived need to keep facilities up when you're loosing money and oil is below $20 a barrel. Then a lot of things changed: 9/11, the Iraq war, Katrina, increasing demand, geo-political tensions in many oil producing states, etc. Oil soars to over $70/barrel. At that point it's easy to say, "They don't care, they make money by not managing the business." But the reality is that now they can fund the things that were missed when prices were low. This will get done, but it will take years to catch up.
Again, it's easy to take the cynical view. But if oil companies ignore future needs when they are flush with cash, they will go out of business. Why? Because "if you don't, someone else will."
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