Posted on 05/17/2004 5:34:34 AM PDT by machman
Edited on 07/19/2004 2:14:12 PM PDT by Jim Robinson. [history]
May 17 (Bloomberg) -- President George W. Bush allowed an increase in oil refinery mergers to go unchecked since he took office and may have contributed to the highest gasoline prices in 20 years as the November election approaches.
The Bush administration approved 33 takeovers totaling $19.5 billion, on top of 21 deals worth $7.3 billion under President Bill Clinton, Bloomberg data shows. Reduced supplies were already pushing up gas prices in Clinton's term, according to a Federal Trade Commission study conducted after pump prices rose to more than $2 a gallon in Milwaukee and Chicago in 2000.
(Excerpt) Read more at bloomberg.com ...
No look at WHY refiners have merged, its been a bad business for many, many years, mandated enviro capital spending, with no return. I didn't seen stories on how the refining industry was hurting when prices were low.....
It has nothing to do with mergers. It has everything to do with the increase in the price of crude. If the refinery industry has anything to do with it, it's because we have not built a new refinery in this country for more than 15 years.
Bloomberg is a conundrum: they talk about capitalism while banging the Anti-Bush drum.
All their radio updates include some sort of dig against the President: "Stocks remained stable today, suggesting a continuation of the worst economy since September 2000".
Democrat schills.
"ConocoPhillips, which produces a sixth of the nation's gasoline, said its plants are operating at 97 percent of capacity. No new refineries have been built in the U.S. since 1976 because of the difficulty in getting approval to build plants and the cost of construction, said Drevna of the National Petrochemical & Refiners Association".
I suspect the above has far more to do with the supply problem than mergers. I just read an article on the CNN website of all places that said there's currently a $5 to $10 premium on the price of a barrel of oil because of the terrorist problem. Seems to me that mergers don't even come into play as far as gas prices are concerned but that's the best way for this author to try and pin the blame on Bush. What a pile of feces!
Exactly.
bump
Regardless of who is responsible for the rise in gas prices, the auto manufacturers need to use improved technology so that cars can run efficiently on renewable sources of energy. And the vehicles and energy sources needs to be affordable for every income bracket. Speaking from the perspective of fixed income living, these rising prices - gas, food, medical care - makes my so-called budget look like a piece of Swiss Cheese! Dang, I just paid $1.90 for regular and almost $20 to fill the tank. Haven't had my full measure of caffiene yet so I'm just a tad cranky.
Exxon Mobil Corp., the second-largest U.S. refiner, on April 29 reported its highest first-quarter refining earnings in 13 years. Valero Energy Corp., the No. 3 U.S. refiner, said on April 28 that profit will almost triple in the current quarter after increased demand for gasoline spurred a 46 percent earnings gain in this year's first three months.
If this is true, then higher crude prices are not all of the problem. Higher crude prices don't make the refining effort less expensive.
They are dangerous, so there is a great deal of legal exposure with every accident, and the government increasingly requires expensive new equipment, for environmental, safety, or the boutique gasoline formulas.
If you were a major oil company, you'd make far more money investing in Treasury Bills than spending it on a refinery on a historical level. That's not true today during this price squeeze, but the price squeeze is the result of years of policies which made refineries a horrible investment.
You forgot the barf alert (for the title, not necessarily for the article info)
Not sure about the merger part but it's certainly not because the price of crude has gone up. A 6-7 dollar hike in the price per barrel of crude should never equal a 50-60 cent per gallon increase to the consumer. Just in my area alone the price at the pump has increased another 15 cents in the last week.
I think this oil price issue has been in the works for a while. Democrats jumped on this issue very early even when gas prices were not that big of a deal. I do believe OPEC and the Middle Eastern nations have been planning this for a while. They cannot stand Bush.
The single biggest problem in refining and marketing is the requirement for all the different gasoline formulations to satisfy air concerns. We could solve this problem overnite by specifying just two formulations nationwide; one for summer and one for winter, instead of the many we have.
it also has to do with the unbelievable variety of regionally mandated gasoline blends. Even when one region has spare capacity, they cannot use it to make extra gas for say, California, because California's gas is totally different from all the others.
"Regardless of who is responsible for the rise in gas prices, the auto manufacturers need to use improved technology so that cars can run efficiently on renewable sources of energy."
What technology would you suggest they use? In your infinite knowledge of the auto companies please enlighten us. BTW, if you honestly don't realize that it takes 4 years to put out a new vehicle with current powertrain technology it would take 15 years, or longer, to put out a vehicle with new powertrain technology.
Thanks to government intervention into their markets and thanks to the litigation lottery and thanks to inflated labor cost caused by the UAW, they are unable to dedicate enough investment money to developing new powertrain technologies.
Not to worry tho', there was the electric Ranger that you probably didn't buy. Did you buy the "Think" technology? How about shopping for a Prius or any other "hybrid"? What do you drive.
you beat me. I should have kept going to the end of the thread.
It is all the fault of Bush. He just doesn't have enough time to run those refinery's with the war and all.
Exactly how does the refineries having to pay $42/barrel make it THEIR fault that gas prices are so high?
Refinery margins have ranged anywhere from $1 - $3 dollars per barrel over the last twenty years. Refiners are hardly to blame when the price of crude has gone up $20 dollars per barrel over the last few years.
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