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| Posturing at the Pump; George Will | |
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| Tweet Topic Started: May 17 2007, 08:51 AM (793 Views) | |
| George K | May 17 2007, 08:51 AM Post #1 |
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Finally
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http://www.washingtonpost.com/wp-dyn/conte...opinion/columns Democrats, seething at the injustice of gasoline prices, have sprung to the aid of embattled motorists. So resolute are Democrats about defending the downtrodden, they are undeterred by the fact that motorists, not acting like people trodden upon, are driving more than ever. Gasoline consumption has increased2.14 percent during the past year. That probably is explained by the inconvenient (to the Democrats' narrative) truth that Speaker Nancy Pelosi was characteristically overwrought when she said that Democrats intend to do this and that because the price of gasoline recently " set a record" at $3.07 a gallon. In real (inflation-adjusted) rather than nominal dollars, $3.07 is less than gasoline cost in 1981. Pelosi vowed, as politicians have been doing since President Richard Nixon set the fashion, to achieve "energy independence." Such vows are, as Soviet grain production quotas used to be, irrational reflexes that no serious person takes seriously. Pelosi baldly asserts that "energy independence is essential to reducing the price at the pump," but she does not say how. As Steven Hayward of the American Enterprise Institute notes, there is no yearning for national self-sufficiency concerning other essential goods, such as food, automobiles, airplanes or medicines. Are Democrats worried about security of oil supplies? In some ways, Hayward says, America's energy supply is more secure than it was in the 1970s, partly because "since 1975, energy consumption per unit of gross domestic product has fallen 48 percent." Furthermore, "oil represents a shrinking share of total U.S. energy consumption -- from 44 percent in 1970 to 40 percent in 2005." The oil America consumes -- only one-eighth of which comes from the Middle East -- is used almost entirely in transportation. Half of America's electricity is generated by coal, of which the United States has a huge abundance. America has about 22 billion barrels of "proven" oil reserves, defined as "reasonably certain to be recoverable in future years under existing economic and operating conditions." In addition, there are an estimated 112 billion barrels that could be recovered with existing drilling and production technology. Make that, with existing drilling and production technology and fewer Democrats like Pelosi who, while promising energy independence, are opposed to any drilling in the Arctic National Wildlife Refuge and much drilling offshore, where 87 billion of the 112 billion barrels are located, as is much of the estimated 656 trillion cubic feet of recoverable natural gas. Pelosi announced herself "particularly concerned" that the highest price of gasoline recently was in her San Francisco district -- $3.49. So she endorses HR 1252 to protect consumers from "price gouging," defined, not altogether helpfully, by a blizzard of adjectives and adverbs. Gouging occurs when gasoline prices are "unconscionably" excessive, or sellers raise prices "unreasonably" by taking "unfair" advantage of "unusual" market conditions, or when the price charged represents a "gross" disparity from the price of crude oil, or when the amount charged "grossly" exceeds the price at which gasoline is obtainable in the same area. The bill does not explain how a gouger can gouge when his product is obtainable more cheaply nearby. Actually, Pelosi's constituents are being gouged by people like Pelosi -- by government. While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes. Pelosi and others who just know, evidently intuitively, the "fair" price of gasoline must relish what has happened in Merrill, Wis., where Raj Bhandari owns a BP gas station. He became an outlaw when he had what seemed, to everyone but the state's government, a good idea. He gave a discount of 2 cents per gallon to senior citizens and 3 cents for people who support local youth sports programs. But Wisconsin's Unfair Sales Act requires retailers to sell gasoline for 9.18 percent above the wholesale price. The state's marvelously misnamed Department of Agriculture, Trade and Consumer Protection has protected consumers from Bhandari's discounts by forcing him to raise his prices. Some customers now think he is price gouging. Some Wisconsin legislators are considering changing the Unfair Sales Act to allow retailers to discount gasoline to benefit things those legislators think should be benefited. In Madison, Wis., as in Washington, D.C., it is considered eccentric to think that government should butt out, let people buy and sell as they please, and let markets equilibrate |
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| ivorythumper | May 17 2007, 09:09 AM Post #2 |
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I am so adjective that I verb nouns!
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If the Democrats really wanted to lower the price at the pump, then the simplest thing over which they have direct control would be to eliminated the federal taxes put on gas. I won't hold my breath - they are more interested in the appearance of aiding the citizens than doing anything that will actually help them. |
| The dogma lives loudly within me. | |
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| Axtremus | May 17 2007, 10:16 AM Post #3 |
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HOLY CARP!!!
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Too much posturing, indeed. The language of HR 1252 is a joke. (But, is it alone in this regard?) |
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| rontuner | May 17 2007, 10:56 AM Post #4 |
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Junior Carp
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crude oil last year $70/barrel crude now $63/barrel Oil companies have always asserted that price fluctuation responsive to crude prices... Now they claim supply/demand issues with refineries that the big oil companies have managed to reduce production to increase profit. Hmmm.... Anti-trust time? |
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| Axtremus | May 17 2007, 11:04 AM Post #5 |
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HOLY CARP!!!
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Why no new refinery: http://blogs.chron.com/lorensteffy/archive...s_views_on.html http://www.tompaine.com/articles/2006/06/0..._refineries.php http://www.theleftcoaster.com/archives/004253.php |
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| JBryan | May 17 2007, 11:04 AM Post #6 |
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I am the grey one
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Actually, the price of gasoline has been effected mainly by supply of refined product for several years now. There has not been a new refinery built in this country for 30 years and it has been taking its toll. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| rontuner | May 17 2007, 12:06 PM Post #7 |
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Junior Carp
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**Actually, the price of gasoline has been effected mainly by supply of refined product for several years now*** Since the secret VP / energy comission meetings??? And what's the explanation for profitable refineries going offline.... Could it have something to do with the internal memos warning that if supply stays high, profits would be stagnant? Something smells - |
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| rontuner | May 17 2007, 12:09 PM Post #8 |
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Junior Carp
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Reform needed for nation’s oil industry By Dennis Draves | Monday, May 07, 2007 (Quad City Times) I wouldn’t fear the terrorists from abroad, as much as I would fear big business in this country, especially big oil. By strategically cutting the number of refineries almost by half since deregulation of oil in 1981, the refiners have created conditions under which price spikes can occur regularly. Inventories are kept low so that when there is a problem that might reduce the flow of oil, the market anticipates a shortage and sends the speculative price of fuel sky-high. Refiners make a killing because it doesn’t cost them any more to produce the fuel. If there was ever a need to go back to regulations, it is now. Experience shows the necessity of protecting the people from the greed of the economically powerful. If you recall at the turn of the 20th century, the abuses by the railroads nearly destroyed agriculture. Also, there’s the abuses of employers during the first half of the last century, or the abuses of traders that resulted in the crash of 1929. The truth is that an unregulated economy results in periodic violent shifts in prices, and these fluctuations are much harder on those with little money than those with full pockets. Deregulation may be appropriate for caviar. It is not for goods and services essential to the well-being of the people. The oil industry is not the only culprit. Dennis Draves |
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| JBryan | May 17 2007, 12:12 PM Post #9 |
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I am the grey one
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ron, you really don't need stick your entire head into the koolaid. Come up for air. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| George K | May 17 2007, 12:27 PM Post #10 |
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Finally
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That quote, Ron, is from a letter to the Quad City Times op-ed page: http://www.qctimes.com/articles/2007/05/07...02656636669.txt Here's another: http://www.qctimes.com/articles/2007/05/11...6c976561694.txt Gas prices high for a number of reasons By Eugene J. Axnix, Moline | Friday, May 11, 2007 Let’s do a little reasonable, professional and honest journalistic research before running off at the mouth and regurgitating radical left wing propaganda regarding the energy complex. 1. Record profits, yes! But oil companies are only making reasonable returns on their considerable investment. Compare their return on investment ( ROI) with any other well-run company. 2. You blame refiners for sabotaging themselves just to keep oil prices high. How stupid. Econ 101 tells us that as the supply goes down, the cost goes up. Consequently the demand for it falls and profits go out the window. 3. You radical leftists have not allowed a new refinery to be built in the U.S. for more than 30 years. What do you expect from 30-year-old infrastructure? 4. Something liberals do not understand is competition. Don’t you think that if one of the refiners could produce their product for less money at a higher profit that he wouldn’t do it in a heartbeat? Any one of them would cut the throat of their competitors and the American public would be the winner. 5. Radical environmentalists do not allow oil drilling in Alaska or offshore. Why are Democrats cutting this supply off? When supply goes up, prices go down. 6. You have an unreasonable stranglehold on building atomic energy plants in the U.S. Even though there has not been one single fatal atomic accident in the U.S., you people cannot be reasonable and give ground to modern technology. America needs a reasonable and comprehensive energy policy. ==-=-=-=-=-=-=-= |
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| Red Rice | May 17 2007, 01:11 PM Post #11 |
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HOLY CARP!!!
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http://money.cnn.com/2007/05/16/news/econo...dex.htm?cnn=yes |
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Civilisation, I vaguely realized then - and subsequent observation has confirmed the view - could not progress that way. It must have a greater guiding principle to survive. To treat it as a carcase off which each man tears as much as he can for himself, is to stand convicted a brute, fit for nothing better than a jungle existence, which is a death-struggle, leading nowhither. I did not believe that was the human destiny, for Man individually was sane and reasonable, only collectively a fool. I hope the gunner of that Hun two-seater shot him clean, bullet to heart, and that his plane, on fire, fell like a meteor through the sky he loved. Since he had to end, I hope he ended so. But, oh, the waste! The loss! - Cecil Lewis | |
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| kenny | May 17 2007, 01:20 PM Post #12 |
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HOLY CARP!!!
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They charge a lot for gas for the same two reasons dogs lick their balls. 1. It feels really good 2. They can |
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| rontuner | May 18 2007, 07:40 AM Post #13 |
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Junior Carp
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----3. You radical leftists have not allowed a new refinery to be built in the U.S. for more than 30 years. What do you expect from 30-year-old infrastructure?--- Umm... There's only been ONE application for a refinery in that time period, and it was approved! ----5. Radical environmentalists do not allow oil drilling in Alaska or offshore. Why are Democrats cutting this supply off? When supply goes up, prices go down.--- Even though the industry claims the problem is not crude supply, but refinery output? --6. You have an unreasonable stranglehold on building atomic energy plants in the U.S. Even though there has not been one single fatal atomic accident in the U.S., you people cannot be reasonable and give ground to modern technology. America needs a reasonable and comprehensive energy policy.--- Maybe when Al Gore is "energy czar" things will get balanced out! :-) |
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| George K | May 18 2007, 08:01 AM Post #14 |
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Finally
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You miss the point of my response, Ron. What you posted was a letter to a newspaper written by someone who lives 20 miles west of Moline, IL. Though the opinions in that letter may (or may not) be correct, the writer holds no more credibility than you or I do in this matter. It's just someone writing a letter, as is what I posted. It's akin to posting what your barber told you. That's why I posted a response to that letter by another nobody. If you want to get into a discussion of the opinions, perhaps those of someone other than a private citizen in the Quad Cities of Illinois would carry more weight. |
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| JBryan | May 18 2007, 08:16 AM Post #15 |
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I am the grey one
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Why would you apply for a refinery that you know is too expensive or impossible to build once you figure in compliance with all regulations, NIMBY, etc. Applications mean nothing. Refiners are smart enough to know whether they can make money on a project long before that. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| rontuner | May 18 2007, 08:24 AM Post #16 |
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Junior Carp
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Old news, but still on topic September 1, 2005 New Study Finds Oil Company Profiteering Behind Gasoline Price Spikes; Bush Called Upon To Prevent Profiteering California's Sales Tax on Gasoline Makes Government Complicit With Oil Companies Santa Monica, CA --- A study released by the Foundation for Taxpayer and Consumer Rights California (FTCR) today found oil company profiteering and the government's failure to respond to it are the cause of recent gasoline price spikes in California. Click here to read the report. The study by petroleum industry analyst Tim Hamilton showed, for example, that from January 17th to April 18th 2005 gasoline prices jumped 65 cents per gallon and refiner profits rose by 61 cents per gallon. The extra four cents went to the state in increased sales tax collection. The study concluded that California's percentage sales tax provides an economic incentive for government officials to promote high prices at the pump because they result in greater tax collection -- an estimated $1 billion more in California during 2005 due to the price gouging. The consumer group recommends a "windfall profits rebate" be instituted. FTCR sent President Bush a copy of the study today and called upon him, in a letter, to warn oil companies against profiteering in the wake of Hurricane Katrina and issue an executive order prohibiting profiteering if necessary. (The full letter can be read at the end of the press release.) "Oil company profiteering, not increased production costs, is the cause of the price spikes at the gasoline pump and Californians deserve their money back," said FTCR president Jamie Court, who served with Hamilton on the California Attorney General Gasoline Pricing Task Force. "Hurricane Katrina will only increase the probability of profiteering and should be a wakeup call to legislators." "The continued failure of public officials to compel refiners to create more refining capacity and increase inventories will result in gasoline prices rising to $4 per gallon relatively soon," stated Hamilton. "The system is rigged for price spikes and the refiners know it." The study examined the causes of the doubling of the average price of gasoline from $1.36 per gallon on January 03, 2000 to $2.72 on August 15, 2005. Among the main findings are: Increases in the prices charged for oil by OPEC countries are not primarily responsible for the dramatic increase in gasoline prices in California. Much of California's crude oil is harvested locally by major refiners who control their own fields. OPEC nations only supply approximately 20% of the oil delivered to refineries in California. Fields controlled by the oil companies in California or Alaska provide the majority (66%) with the remaining 14% coming from non-OPEC foreign locations California consumers will pay an estimated increase of $15.5 billion more at the pump in 2005 than in 2000 because of profiteering by oil companies and government's failure to act. No public evidence exists of substantive increases from 2000 to 2005 to oil companies in the cost of a) producing crude oil; b) refining oil into gasoline or diesel; or c) transporting the refined products to market. The 2005 California gas prices spike -- with pump prices increasing from $1.93 of January 17 to $2.72 by August 15th -- was directly tied to the exportation of large quantities of CARB motor fuel in 2005. By exporting fuel out of the country, refiners and traders deliberately decreased available supplies during a period of peak demand. Inflated profits for California oil companies from their refining operations -- including an increase of 61¢ per gallon in profits from January 17 to April 18 -- were a principal factor in the jump in gasoline prices. California, which also collects a gasoline excise tax, is one of only 9 states that maintains a sales tax on purchases at the pump. Gasoline price increases in California will increase collections of the 7.25% state/local sales tax during 2005 by an estimated 6¢ per gallon (40%) or approximately $1 billion -- creating the largest gas tax increase in the history of the state. California's percentage sales tax provides economic incentives for government officials to promote high prices at the pump. The sales tax has created an implied partnership between the oil industry and California government as both dramatically benefit from the rise at the pump. The risk that elected officials constantly searching for additional tax revenue will become "hooked" on high pump prices is real. While gasoline sales tax collection increased by over 150% after adjustment for inflation since its enactment in 1972, the minimum wage level, also set by the legislature, has fallen nearly 12.5% during the same period. |
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| rontuner | May 18 2007, 08:33 AM Post #17 |
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Junior Carp
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Here's the news on those refinery memos: Internal Memos Show Oil Companies Intentionally Limited Refining Capacity To Drive Up Gasoline Prices Santa Monica, CA -- The Foundation for Taxpayer and Consumer Rights (FTCR) today exposed internal oil company memos that show how the industry intentionally reduced domestic refining capacity to drive up profits. The exposure comes in the wake of Hurricane Katrina as the oil industry blames environmental regulation for limiting number of U.S. refineries. The three internal memos from Mobil, Chevron, and Texaco (Click here to read the memos.) show different ways the oil giants closed down refining capacity and drove independent refiners out of business. The confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990s in order to raise the price at the pump. "Large oil companies have for a decade artificially shorted the gasoline market to drive up prices," said FTCR president Jamie Court, who successfully fought" to keep Shell Oil from needlessly closing its Bakersfield, California refinery this year. Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty." "It's now obvious to most Americans that we have a refinery shortage," said petroleum consultant Tim Hamilton, who authored a recent report about oil company price gouging for FTCR. (Click here to read the report.) "To point to the environmental laws as the cause simply misses the fact that it was the major oil companies, not the environmental groups, that used the regulatory process to create artificial shortages and limit competition." The memos from Mobil, Chevron and Texaco show the following: * An internal 1996 memorandum from Mobil demonstrates the oil company's successful strategies to keep smaller refiner Powerine from reopening its California refinery. The document makes it clear that much of the hardships created by California's regulations governing refineries came at the urging of the major oil companies and not the environmental organizations blamed by the industry. The other alternative plan discussed in the event Powerine did open the refinery was "... buying all their avails and marketing it ourselves" to insure the lower price fuel didn't get into the market. Click here to read the Mobil memo. * An internal Chevron memo states; "A senior energy analyst at the recent API convention warned that if the US petroleum industry doesn't reduce its refining capacity it will never see any substantial increase in refinery margins." It then discussed how major refiners were closing down their refineries. Click here to read the Chevron memo. * The Texaco memo disclosed how the industry believed in the mid-1990s that "the most critical factor facing the refining industry on the West Coast is the surplus of refining capacity, and the surplus gasoline production capacity. (The same situation exists for the entire U.S. refining industry.) Supply significantly exceeds demand year-round. This results in very poor refinery margins and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline. One example of a significant event would be the elimination of mandates for oxygenate addition to gasoline. Given a choice, oxygenate usage would go down, and gasoline supplies would go down accordingly. (Much effort is being exerted to see this happen in the Pacific Northwest.)" As a result of such pressure, Washington State eliminated the ethanol mandate -- requiring greater quantities of refined supply to fill the gasoline volume occupied by ethanol. Click here to read the Texaco memo. FTCR is nonprofit, nonpartisan consumer group. For more information visit: http://www.consumerwatchdog.org |
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| George K | May 18 2007, 08:35 AM Post #18 |
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Finally
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What's a fair profit margin for a grocery store, a hardware store, or a piano tech? How about Menards, Macy's or Costco? 5%? 8%? 10%? I don't know, the carping about obscene profits seems to want to hold one industry to a different standard than others. Correct me if I'm mistaken. |
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| JBryan | May 18 2007, 08:43 AM Post #19 |
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I am the grey one
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So, the reduction in refining capacity is a conspiracy by oil companies to drive up prices. What a crock. As if you could get them to collude with each other on anything. If it was profitable to build a refinery it would be built by someone. My brother has worked at an independent refinery (Frontier) for 20 some years. He was a shift supervisor before they moved him into the planning department. He would howl with amusement at these items posted by rontuner. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| rontuner | May 18 2007, 09:20 AM Post #20 |
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Junior Carp
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How many independants remain? |
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| rontuner | May 18 2007, 09:30 AM Post #21 |
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Junior Carp
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This is fun if you like graphs: (Canada) http://www.direct.ca/trinity/gasprices2.html |
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| George K | May 18 2007, 09:37 AM Post #22 |
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Finally
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Since you like graphs:
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| rontuner | May 18 2007, 10:51 AM Post #23 |
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Junior Carp
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Yup, that was the old standard - but not profitable enough, so the standard was switched - by design?... |
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| Daniel\ | May 18 2007, 11:39 AM Post #24 |
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Fulla-Carp
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Gas more than doubled in price in five years. Something is wrong. |
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| taiwan_girl | May 18 2007, 11:47 AM Post #25 |
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Fulla-Carp
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The thing that amazes me is that even with gas prices so high, people are driving more than ever and consuming more gasoline. That only tells me that while people complain, nobody is actually willing to change their habits to deal with it. |
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