Marathon Oil delays Detroit refinery expansion

Oil & Gas Journal ^ | Mar 12, 09 | OGJ editors

[thackney]

Marathon Oil Corp. plans to delay for 18 months completion of a $2 billion expansion of its 100,000 b/d refinery in southwest Detroit—Michigan's sole refinery.

The company originally intended to finish the expansion in fourth-quarter 2010, but a slowdown in gasoline demand and a delay in the company's Canadian crude production pushed the completion date to mid-2012.

Construction, which began in June 2008, will not stop but will continue at a slower pace, a company representative said.

Due to the delay and other factors, Marathon raised its cost estimate for the project to $2.2 billion, up 15% from the original estimate of $1.9 billion.

[ZULU]

WHY NOT?

Crude is selling a record lows and gasoline and heating oil are at bearable prices. Makes much more sense to wait until the economy recovers and you can sell the stuff at an extortion rate, ripping off the consumers and other businesses by wailing that there isn’t enough refinery capacity.

Just another reason why oil should be handled just like gas and electric - as a regualted public utility.

[Kozak]

Because the government does such a great job at running an economy. Why stop there? No doubt they can work wonders in Health Care, Housing and producing our food.

[thackney]

and you can sell the stuff at an extortion rate

Oil industry makes about 8¢ on the dollar sold. Hardly extortion, but there appears to be lots of ignorance.

There certainly isn't any shortage of gasoline and diesel. Stock levels around the nation are not low.

Just another reason why oil should be handled just like gas and electric - as a regualted public utility.

You really believe we would benefit from this? You lack information. Take natural gas for example.

The average residential price of natural gas is more than double what the producers get for it. Natural gas doesn't have to go through a refinery or receive the taxes added to gasoline and diesel.

US Natural Gas Prices
http://tonto.eia.doe.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm

[nascarnation]

Avoiding Michigan is a no-brainer.

[ZULU]

No, no, no. Not any of that.

Public Utilities seem to do a good job of delivering electricity -— wait a second. Scrap the whole idea. Our electricity grid is in bad shape.

Maybe a public utility is not a good idea after all.

[ZULU]

Thanks for clearing that up.

I just get so ticked off at having to pay such high prices for gasoline.

[Eric in the Ozarks]

How about groceries, too ?

[grellis]

If you would like to be added or dropped from the Michigan ping list, please freepmail me.

[ZULU]

Give me a break.

Read my later posts - a bad idea.

[PSYCHO-FREEP]

Crude is NOT selling at record lows. In fact it was at $25 higher at it’s lowest point recently, than it was during ‘84. (10 dollars)

[thackney]

Oil companies pay about 3 times as much in taxes as they keep in profits. I’m glad we now agree, more government involved would only make it worse.

[ZULU]

I thought it was selling in the $40 - $50 per barrel range.

[thackney]

It is now around $45. Earlier this year it was in the mid~high $30’s.

[thackney]

than it was during ‘84. (10 dollars)

And the late 90's...

[PSYCHO-FREEP]

No, in 1884-85, Oil was selling as low as 8 dollars per barrel briefly. (Canadian Crude) The lowest it has been recently was $30 (dollars).

[Paladin2]

in 1884-85, Oil was selling

Likely pennies/bbl.

[thackney]

No, in 1884-85, Oil was selling as low as 8 dollars per barrel briefly.

Even worse for some others then (1980's). Take a look what happened to Alaskan in 1986 with the West Coast glut and the export ban.

http://tonto.eia.doe.gov/dnav/pet/hist/f005071__3m.htm

[PSYCHO-FREEP]

Production came to a standstill, which hindered Domestic production all the way into 2000.

The same thing is about to happen, during a most inappropriate time.

[biff]

Don’t know about the late 1800’s but in the 1940’s, 50’s and 60’s it was $3 and my dad told me in the 30’s it was 30 cents a barrel if they could find anybody to buy it.

[PSYCHO-FREEP]

I was in Alaska, on the North Slope during that time. Exploration went from 20 rigs down to 4. I was one of the extremely lucky 4 rigs left. Although we took severe pay cuts, lost all benefits, etc.

[Eric in the Ozarks]

Actually, there was a time, not too long ago, when state-regulated investor owned utilities did what they were supposed to do. They built power plants, strung lines and poles and provided a fair rate of return on their shares (widows and orphans rated.) Then, in about 1980, utility executives decided they could make more money by paying themselves bonuses in stock, followed by a sell off or merger of their companies with other utilities. Low interest loans and bonds, some backed by government, now accrued to these executives. The bonuses were essentially fraudulent because their market areas were limited and protected and state regulators set their rate of return. Many very fine power companies that existed and served their areas for decades have been looted and the service has declined. I am beginning to think the best solution to this might be found in the city of Omaha and state of Nebraska where the city and state run their own production.

[SunkenCiv]

Thanks grellis.

Sharpie-’stached’ Suspect Turns into Cop Shop
WXYZ.COM | 3-13-2009 | WXYZ
Posted on 03/13/2009 9:12:49 PM PDT by Westlander
http://www.freerepublic.com/focus/f-chat/2206323/posts

[varon]

I can’t understand why any oil company would want to expand their refining capacity. With the government hell bent on switching the power plant in vehicles to electric; why increase production of a commodity, the demand for which is decreased by government dictates.

[shove_it]

Speedway 79 - $0.25 per gallon in the fifties in Detroit ...

http://www.youtube.com/watch?v=s8NGHqqaHY8