(repost)Don't Blame Prices On Environmentalists

http://journals.democraticunderground.com/underpants/45

Tue May 30th 2006, 09:40 AM
Editor, Times-Dispatch: The oft-cited excuse for rising gas prices is the lack of new refineries in the U.S. This is echoed by people who should know better.

Blaming this on radical environmentalists is naive (sic). If the American Petroleum Institute wanted to initiate a lobbying effort to build a refinery in the middle of the James River, it would -- and it would get it, too. Big Oil doesn't bow to environmental pressures; in fact, it bows to no one, let alone the Sierra Club.

The important factor here is the companies' margin on refining and not over-investing in capacity; they are dealing with a finite supply, you know. There are currently half as many oil refineries in the U.S. as there were in 1981 but refining capacity has only decreased 10 percent. Google "Chevron memo refineries" and read for yourself (search for Texaco and Mobil memos, too). Big Oil has control over supply primarily through control of refining.

Oil companies enjoy the rare ability these days of price control and they apparently have willing followers to chant their message for them. Would you make a U-turn to get a $2.50 gallon of gas? Would you have a year ago?

Any way they can increase their profit margin is OK with them. And since jacking up the price of gas doesn't hurt them, they don't care. After all, they lose more pocket change in their limos than most WORKING Americans make in a year.

as if anyone can name a formal developed refinery proposal that was shot down for any reason anywhere since greed is good Reagan introduced trickle down to the national stage.

It's NIMBY and it's "let someone else deal with the shit." Same reason you go out to eat--great meal, someone waits on you, and no dishes...sometimes, it's no more expensive, and sometimes, it's actually cheaper than firing up the old range and cooking that meal yourself!

but the reason is that the price of oil was depressed for so many years that investment in plant and exploration dried up. This situation was completely predictable. The oil companies, of course, have no interest in expanding supply, which will lower the price.

Any responsible government would have a policy for an effect this large. It is possible just to ride it out and hope that free-market economics will expand the supply and lower prices. But it doesn't always work that way.