• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!
  • Welcome to our archives. No new posts are allowed here.

so for those that were blaming Bush for high gas prices....

As someone in the oil and refining industry, I'd like to comment on the above quotes by scottyz. First, I'm familiar with the Shell refinery issue in CA. Indeed, the feedstock for that refinery is limited and significant overhauls will be needed in order to change the refinery's process and accept a different grade of crude (i.e. Maya sour, Venezuelan or Canadian sour). Refineries are not all the same, and the cut (product slice) you get from a one grade of crude oil is different than the cut you get from another. For example, a refinery that is set up to take sweet crude will get more propane, gasoline and kerosene from its distillation process; whereas, a refinery consuming sour crude will get more jet fuel, diesel and asphalt. Now, take each grade of crude (sweet and sour - just like Chinese food ;) ) and there are different "flavors" in each of those categories. So you can see, feedstock is an issue faced by refiners.

Regarding the other quote on refineries shutting down, that's just a simple economics challenge from the mid 90's. the memos you use are from 1996 and were based off economics from the late 80's thru the foreseeable future. However, the two quotes just don't line up from a time table standpoint. The market in the early to mid 90's was vastly different from the market of the past 3 or 4 years. from the late 80's thru 1999, crude oil was comparatively cheap cheap, gasoline was cheap and supply was outweighing demand every year from the late 80's thru 2000. I remember trading $10 crude oil in 1998 and OPEC was constantly talking about production cuts. And back then, there was nobody complaining about "if the oil companies were making enough money", the opposite of today's gripe. And guess what, we had to still invest the same amount of dollars into research, assets, drilling, etc. Capital is invested in good market conditions and bad.

I understand you're trying to tie big oil's profits to what seems to be a counter productive measure like reducing refinery capacity. However, the only problem is that your quotes are a decade apart and world's apart commercially. The Shell refinery in California issue is feedstock challenge and the Texaco issue of closing down refineries was a supply side issue. Heck, Texaco hasn't existed in several years, they're Chevron now.

Hope that helps.
 
alienken said:
I'm on the fence about blaming the Big Oil executives.I hear the economist say that the market dictates what the price per barrel is but at the same time prices came down fast after the Senate "investigation" (more like politicians getting face time).Industries are very afraid of the Senate. Did big oil get nervous and bring down the prices in fear of more Federal interferance?
Click to expand...


alienken,
Lawmakers struggling to define gasoline price gouging and scrutinizing execs shows how phony the current Congressional jihad against the oil companies is. "Price gouging" is one of those phrases that evoke strong emotions but have no definition.

Where particular states have passed laws against "price gouging," their different definitions reveal how slippery and arbitrary the concept is. Kansas attempts to define price gouging as selling at prices more than 25 percent higher than they were before some disaster. Georgia makes it illegal for prices to rise after the state government has declared a state of emergency, unless the seller can prove that his costs have gone up.

What all this boils down to is that prices higher than what observers are used to are called "gouging." In other words, prices under normal conditions are supposed to prevail under abnormal conditions. This completely misunderstands the role of prices.

When hurricanes knocked out both oil drilling sites and refineries around the Gulf of Mexico, there was suddenly less supply of oil. That meant higher prices and higher profits. Was what happened gouging because it helped lead to record profits? Hardly. Year in and year out, oil companies invest the same amount of capital on exploration, production and distribution whether oil is selling for $10 a barrel or $60 a barrel. As for the cost of a barrel of oil, the price is set globally, not domestically. The best way to judge whether the record profits reflect gouging is to look at the profit margins of the companies to see whether they are out of line with the industry.

The American Petroleum Institute reports that the average profit per dollar of sales within the industry was 7.9 cents during the second quarter. This compares with 13.8 cents for McDonald's and 21.2 cents for Coca-Cola.

So in our current market, what do higher prices do? Force people to restrain their own purchases more so than usual, i.e. cut back on driving, buy hybrids, walk more, take public transportion, etc. What do higher profits do? Cause more money to be invested in producing whatever is earning higher profits, and this in turn expands output, i.e. increased improts of unleaded gasoline from Europe, Mexico and Canada. Isn't a larger supply of oil and a reduced consumption of it what we want? Sure it is. And guess what? Prices will fall and investments in the infrastructure will have increased and we will once again find ourselves in a net long supply position, i.e. supply is outweighs demand . . . prices drop and we start all over again.

I hope that helps you alienken
 
Last edited:
FireUltra 98 said:
alienken,



When hurricanes knocked out both oil drilling sites and refineries around the Gulf of Mexico, there was suddenly less supply of oil. That meant higher prices and higher profits. Was what happened gouging because it helped lead to record profits? Hardly. Year in and year out, oil companies invest the same amount of capital on exploration, production and distribution whether oil is selling for $10 a barrel or $60 a barrel. As for the cost of a barrel of oil, the price is set globally, not domestically. The best way to judge whether the record profits reflect gouging is to look at the profit margins of the companies to see whether they are out of line with the industry.

The American Petroleum Institute reports that the average profit per dollar of sales within the industry was 7.9 cents during the second quarter. This compares with 13.8 cents for McDonald's and 21.2 cents for Coca-Cola.

So in our current market, what do higher prices do? Force people to restrain their own purchases more so than usual, i.e. cut back on driving, buy hybrids, walk more, take public transportion, etc. What do higher profits do? Cause more money to be invested in producing whatever is earning higher profits, and this in turn expands output, i.e. increased improts of unleaded gasoline from Europe, Mexico and Canada. Isn't a larger supply of oil and a reduced consumption of it what we want? Sure it is. And guess what? Prices will fall and investments in the infrastructure will have increased and we will once again find ourselves in a net long supply position, i.e. supply is outweighs demand . . . prices drop and we start all over again.

I hope that helps you alienken
Click to expand...
Yes, it really does look like it is just the market forces at work here. The Senators that are demonizing "Big Oil" are the same ones that fight drilling in Alaska which would put more supply bringing the prices down. If the Senators really wanted to get the gas prices down to help the little guy there are several things they can do. Reduce regulations that make it hard, if not impossible to build more refineries. They can open up drilling in Alaska and other areas like Colorado. This is the easiest - cut gas tax. The Feds. make more money on the gallon of gas than the gas companies do.......The prices are coming down. I was amazed when I seen it at $2.15, so I stopped and filled up only to see it at $2.oo down the road.It's hard to figure out where the bottom is, it's like dealing with the stock market.
 
JOHNYJ said:
RE : Proud American # 15
We are not talking stock ownership. These are personal feriends of the President.People who have secret meetings with the administratio when its making national policies having to do with energy.
Its also the people that President Bush and Cheney are going to get positions on their boards of directors.For which they will be paid hundreds of thousands of dollars.
Click to expand...

I note you did not respond to the salient questions and replied with this garbage. So tell me what exactly is it that you aledge Bush and Cheney are doing for the dastradly people in return for their seats on the boards?
 
Hoot said:
I don't resent oil companies making profits.

What I resent is Bush giving them 8 billion in tax breaks,
Click to expand...

What specific special tax breaks are you talking about?

while the oil companies report 10 billion in profits in the last quarter!
Click to expand...

And what percentage profit did that represent and how much profit don't you resent?
 
Obviously big bil was feeling the heat for having record profits, while charging record prices. As a monopoly in collusion they can up the price any time they want to. The prices are still way above what they were last year.

Until a NASA-like program for American energy independence is launched, we're going to be at the mercy of big oil and the middle east.
 
Hoot said:
I don't resent oil companies making profits.

What I resent is Bush giving them 8 billion in tax breaks, while the oil companies report 10 billion in profits in the last quarter!
Click to expand...

Still waiting for an answer to the questions I posed to you.................................

Quote:
Originally Posted by Hoot
I don't resent oil companies making profits.

What I resent is Bush giving them 8 billion in tax breaks,


What specific special tax breaks are you talking about?

Quote:
while the oil companies report 10 billion in profits in the last quarter!

And what percentage profit did that represent and how much profit don't you resent?

I would think that if you are going to resent these things you would have an answer.
 
Stinger said:
What specific special tax breaks are you talking about?
Click to expand...

I would assume he is speaking about the House Energy Bill.

http://www.washingtonpost.com/wp-dyn/articles/A63958-2005Apr18.html

Hoot did make it sound as if the oil companies got an exclusive 8 billion dollar tax break, which they did not. It is spread out through a lot of the energy companies. Though they seem to be getting a "large portion".
 
Gibberish said:
I would assume he is speaking about the House Energy Bill.

http://www.washingtonpost.com/wp-dyn/articles/A63958-2005Apr18.html

Hoot did make it sound as if the oil companies got an exclusive 8 billion dollar tax break, which they did not. It is spread out through a lot of the energy companies. Though they seem to be getting a "large portion".
Click to expand...

And specifically which tax breaks are objectionable and why? That is the question to Hoot.
 
alienken said:
Yes, it really does look like it is just the market forces at work here. The Senators that are demonizing "Big Oil" are the same ones that fight drilling in Alaska which would put more supply bringing the prices down. If the Senators really wanted to get the gas prices down to help the little guy there are several things they can do. Reduce regulations that make it hard, if not impossible to build more refineries. They can open up drilling in Alaska and other areas like Colorado. This is the easiest - cut gas tax. The Feds. make more money on the gallon of gas than the gas companies do.......The prices are coming down. I was amazed when I seen it at $2.15, so I stopped and filled up only to see it at $2.oo down the road.It's hard to figure out where the bottom is, it's like dealing with the stock market.
Click to expand...
I'm still not sold on the idea that opening up oil drilling in Alaska will help the price of gas drop significantly. It may help a very little in the short term, but not for the long term.

I was sorry to see Senator Cantwell's bill proposal failed regarding the gas gouging fines on companies that take advantage of federal disasters. Even Senator Grassley claimed the proposal had merit. Her bill would have made price gouging a federal crime. Might have been a step in the right direction considering we don't know what's going on with the oil executives. One day they are in front of Congress telling everyone, without taking an oath, they are not part of a task force led by Cheney, the next day there is evidence supporting they were in fact part of the task force. And then we start arguing the definition of "participation"...:doh
 
culturalrider said:
Who's blaming Bush for higher gas prices?
Click to expand...

Its no secret that President Bush is in the pocket of the Oil companies and that he would never do anything that woud cut their profits.
He is, as we are speaking about to give them another 6 billion dollars in tax breaks. When the heads of the oil companies appeared on capital hill to testify.The Republicans blocked their being put under Oath,so any lies hey told couldn't be prosecutable.
 
Because of President Bush gas increased to almost $3.50 a gallon at one time, am I going to thank him because it is now down to $2.50 a gallon, no! Am I going to thank him when prices drop to $2.00 dollars a gallon? Not yet

How about $1.50, nope, 99 cents? No, because it was 99 cents when President Clinton was in office, remember? I do!

Now, if somehow gas prices drops to 50 cents, hell even 75 cents a gallon then and only then will I praise Bush and gladly give him credit.

Hell, I'd probably even vote for him. :cool:
 
culturalrider said:
Who's blaming Bush for higher gas prices?
Click to expand...

Tell me you didn't bring back a four-month-old thread for THAT nugget of wisdom...
 
KidRocks said:
Because of President Bush gas increased to almost $3.50 a gallon at one time, am I going to thank him because it is now down to $2.50 a gallon, no! Am I going to thank him when prices drop to $2.00 dollars a gallon? Not yet

How about $1.50, nope, 99 cents? No, because it was 99 cents when President Clinton was in office, remember? I do!

Now, if somehow gas prices drops to 50 cents, hell even 75 cents a gallon then and only then will I praise Bush and gladly give him credit.

Hell, I'd probably even vote for him. :cool:
Click to expand...
What was the price when Clinton left?
 
The price of gas should be high. But not for the profit of oil companies. The oil companies should also not be receiving any form of re-imbursement or tax relief from the gov when they are reporting record profits.
As for blaming bush? Sure, he started a war that directly related to gas prices growing, and so many ppl of his party/administration are in bed (as well as himself) with big oil they simply turn a blind eye to big oil making rediculous amount of money.
 
JOHNYJ said:
Its no secret that President Bush is in the pocket of the Oil companies.
Click to expand...
If it's no secret, then you'll have no problem presenting evidence on this.
 
What would be realy great is if Congress made it illegal. For an former President of the USA. To take a job with a company that did business with the govt. for 5 years. Than president Bush couldn't take all those high paying board of directors jobs. Hes going to get from the Oil companies when he leaves office. Also the ones at the drug companies.
 
You must log in or register to reply here.
Back
Top Bottom