"Posted by carl in alaska to Enterprise
On News/Activism 06/26/2005 12:47:27 PM PDT · 23 of 28"
"This article doesn't tell the whole story, of course. If I recall correctly, demand for gasoline declined significantly in the early 1980's as the average mileage of the US vehicle fleet increased dramatically in the 80's. (Introduction of the catalytic converter allowed engines to become much more efficient while still reducing emissions.) After gasoline demand declined for a few years, demand then started growing again as the number of vehicles steadily increased. So some of these refineries may have been closed in the early 80's when demand in many areas was flat or declining. Some of these refineries may have also been closed because nearby sources of crude oil were depleted so that the refineries could no longer operate efficiently near full capacity. As imports increased, we have had to move refineries near the coasts and the Gulf of Mexico so the refineries are next to ports where oil tankers unload. This exact scenario just happened recently in Bakersfield, CA, where a refinery was closed because there is no longer enough crude oil being produced in the San Joaquin Valley of California. The refinery didn't make any money because it was running way below its capacity. Shell Oil offered to sell it to any willing buyer but I don't think anyone wanted this refinery. This just goes to show, the MSM only tells you the anti-business side of the story and you have to dig around to find the other side. Oil refining was a lousy, unprofitable business all through the 80's and early 90's and it isn't the responsibility of investors to invest in a business that doesn't make a good return on investment. That said, government regulators need to keep an eye on this industry to make sure they're not working together to prevent profitable investments in refineries by independent refiners."
In searching through his past posts I learned that Carl has a Biochem degree from UC San Diego.
I nominate Carl as the resident oil industry expert at FreeRepublic!
Thanks for the nomination for oil industry expert. I'm not really an oil industry expert yet, but I understand the basic economic forces that drive this industry and I'm working on acquiring greater expertise. There are some other posters who know the oil business quite well. As I recall, M. Espinola is one of them.