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Gas Price Surge Under Bush Follows Unchecked Increase in Refinery Mergers
Bloomberg News ^ | 5/17/04 | Jim Efstathiou Jr.

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 ...


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; Front Page News; Government; News/Current Events; Politics/Elections; US: Alaska; US: California; US: Louisiana; US: New York; US: Texas
KEYWORDS: doomberg; energy; environment; gasoline; gasprices; gloomdoomberg; gwb; oil; refining; texas
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What else is new, its all Bush's fault........

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.....

1 posted on 05/17/2004 5:34:34 AM PDT by machman
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To: machman

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.


2 posted on 05/17/2004 5:40:33 AM PDT by Brilliant
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To: machman

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.


3 posted on 05/17/2004 5:40:57 AM PDT by Old Sarge
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To: machman

"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!


4 posted on 05/17/2004 5:42:35 AM PDT by Arkie2
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To: Brilliant
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.

Exactly.

5 posted on 05/17/2004 5:43:23 AM PDT by machman
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To: Arkie2

bump


6 posted on 05/17/2004 5:43:58 AM PDT by holdmuhbeer
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To: machman

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.


7 posted on 05/17/2004 5:50:03 AM PDT by tob2 (Old Fossil and proud of it!)
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To: machman
The rise in gasoline prices helped refiners generate the highest margins from refining crude oil into gasoline and other fuels in the first quarter since at least 1990. ConocoPhillips, the largest U.S. oil refiner, last month posted its biggest quarterly profit since the 2002 acquisition that formed the company. ChevronTexaco Corp., the second-biggest U.S. oil producer, said earnings rose 33 percent to the highest level since a 2001 merger formed the company. Chevron's first-quarter refining profit doubled.

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.

8 posted on 05/17/2004 5:54:42 AM PDT by Bryan24
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To: machman
Refineries are a lousy business. Most of the time they register a profit of 5 cents or less per gallon, and there have been years when they actually lose money on each gallon.

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.

9 posted on 05/17/2004 6:07:03 AM PDT by Dog Gone
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To: machman

You forgot the barf alert (for the title, not necessarily for the article info)


10 posted on 05/17/2004 6:10:16 AM PDT by CedarDave (May God bless our brave sailors & all who have died serving our country, and comfort their families)
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To: Brilliant
"It has nothing to do with mergers. It has everything to do with the increase in the price of crude."

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.

11 posted on 05/17/2004 6:10:28 AM PDT by JustAnAmerican
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To: machman

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.


12 posted on 05/17/2004 6:13:46 AM PDT by truthandlife ("Some trust in chariots and some in horses, but we trust in the name of the LORD our God." (Ps 20:7))
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To: truthandlife

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.


13 posted on 05/17/2004 6:19:58 AM PDT by umgud (speaking strictly as an infidel,,,,,,,,,,,,,,,,)
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To: machman

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.


14 posted on 05/17/2004 6:25:26 AM PDT by babble-on
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To: tob2

"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.


15 posted on 05/17/2004 6:25:28 AM PDT by CSM (Vote Kerry! Boil the Frog! Speed up the 2nd Revolution! (Be like Spain! At least they're honest))
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To: umgud

you beat me. I should have kept going to the end of the thread.


16 posted on 05/17/2004 6:26:05 AM PDT by babble-on
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To: machman

It is all the fault of Bush. He just doesn't have enough time to run those refinery's with the war and all.


17 posted on 05/17/2004 6:30:22 AM PDT by Piquaboy
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To: Bryan24
"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."

You are absolutely correct! There are only 42 gallons of oil in a Barrel of crude, ergo each incremental $1.00 rise in crude adds $0.023 to each gallon of gasoline. The problems are:
1)Lack of refinning capacity.
2)Distrabution difficulties due to different formulations.
3)Disincentive regulations.
4)Supply and demand.
5)And way down the list, Crude prices.
18 posted on 05/17/2004 6:31:19 AM PDT by River_Wrangler (Gun powder for me and a beer for my horse!)
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To: machman

Exactly how does the refineries having to pay $42/barrel make it THEIR fault that gas prices are so high?


19 posted on 05/17/2004 6:31:42 AM PDT by Blood of Tyrants (Even if the government took all your earnings, you wouldn't be, in its eyes, a slave.)
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To: machman

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.


20 posted on 05/17/2004 6:36:36 AM PDT by Rodney King (No, we can't all just get along)
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