T Nation

Wonder Why Gas is Expensive?

Don’t like the price at the pump, blame a democrat.

http://www.breitbart.com/news/2005/10/07/D8D3903O1.html

Democrats Attack Bill to Boost Refineries
Oct 07 11:10 AM US/Eastern

By H. JOSEF HEBERT
Associated Press Writer

WASHINGTON

A new Republican-crafted energy bill, prompted by the hurricane devastation and high fuel prices, came under sharp attack Friday from Democrats who called it a sop to rich oil companies that would do little to curb gasoline or natural gas costs, while hurting the environment.

Supporters argue the measure is needed to spur construction of new refineries. The House was expected to vote on it later in the day.

In an attempt to ease approval of the bill, Rep. Joe Barton, R-Texas, removed a particularly contentious provision Friday that would have implemented clean air regulation changes long sought by the Bush administration. It would have allowed not only refineries, but also coal-burning power plants and other industries to expand and make changes without adding pollution controls even if emissions increase.

Still, Democrats and a few Republicans lambasted the legislation as debate opened on the House floor.

It does nothing to curb oil use by requiring more fuel efficient cars or promoting alternative energy sources, said Rep. Edward Markey, D- Mass. He called it “a leave-no-oilman-behind bill.”

Attempts to add requirements that automakers increase vehicle fuel economy and a measure aimed at producing more natural gas were thwarted by GOP leaders who strictly limited the ability by lawmakers to amend the bill.

“Natural gas is an issue this (Congress) needs to deal with,” said Rep. John Peterson, R-Pa., who was prevented under House rules for the bill from offering a proposal that would have opened offshore natural gas resources to drilling.

Hurricanes Katrina and Rita shut down more than a dozen refineries and disrupted natural gas supplies. Gasoline prices soared and huge increases in heating bills are expected this winter for users of both gas and fuel oil.

Barton says vulnerabilities in the fuel supply system exposed by the hurricanes show that the country needs to build more refineries, especially away from the Gulf Coast region. No refineries have been built in the United States since 1976 as the industry has consolidated to fewer, but larger facilities.

The GOP legislation also would limit to six the different blends of gasoline and diesel fuel that refiners would be required to produce, reversing a trend of using so-called “boutique” fuels to satisfy clean air demands. And it would give the federal government greater say in siting a refinery and pipeline. It also calls on the president to designate military bases or other federal property where a refinery might be built.

“The bill weakens state and federal environmental standards … and gives a break to wealthy oil companies while doing little or nothing to affect oil prices,” Rep. Sherwood Boehlert, R-N.Y., said in a letter Thursday to colleagues.

With prices soaring, “oil companies now have all the profits and incentives they need to build new refineries” without government help, he maintained.

Barton countered that it will give industry more “certainty” that a refinery project will not be delayed “without lessening any environmental law now on the books. … The bill sets in motion a chain of events for lowering gas prices for Americans.”

Among the groups trying to kill the bill were the National League of Cities, nine state attorneys general, most environmental organizations and groups representing state officials in charge of implementing federal clean air requirements. They said the bill would hinder their ability to ensure clean and healthy air.

Environmentalists also have argued that the limit to six gasoline types could jeopardize the requirement for use of low-sulfur diesel fuel. The low-sulfur diesel regulations have been touted by the Bush administration as one of the Environmental Protection Agency’s most significant accomplishments.

In 1981, the United States had 325 refineries capable of producing 18.6 million barrels a day. Today there are fewer than half that number, producing 16.9 million barrels daily. Still, refining capacity has been increasing, though not dramatically, for the last decade. Imports have made up the difference as demand has continued to increase.

“The bill weakens state and federal environmental standards … and gives a break to wealthy oil companies while doing little or nothing to affect oil prices,” Rep. Sherwood Boehlert, R-N.Y., said in a letter Thursday to colleagues.

With prices soaring, “oil companies now have all the profits and incentives they need to build new refineries” without government help, he maintained.

[quote]buffballswell wrote:

With prices soaring, “oil companies now have all the profits and incentives they need to build new refineries” without government help, he maintained.[/quote]

Why would oil companies waste their money buiding refineries that would ultimately lower their profit margin? Of course it is going to take tax breaks to make it worth their while.

Hmmm, sounds a lot more complex than “Democrats want higher oil prices” doesn’t it?

What a silly topic title.

[quote]vroom wrote:
Hmmm, sounds a lot more complex than “Democrats want higher oil prices” doesn’t it?

What a silly topic title.[/quote]

Yea really. Look at the thread i started a while back about gas prices. it stated blatantly that the oil companies are benefiting the most from these prices, as they bought this stuff at $10 a barrel and are selling it just now. What a coincidence that this happens when an oilman is in power… bullshit.

And as Thoreau once said: “What’s the sense in having a nice house if you have a planet unfit to build it on?”

Intrestingly , we are seeing some companies like Virgin, join the oil race. He’s building a refinery… i bet we see more given these crazy oil prices.

More refining capacity will lead to more gas supply. This will slow the price increase or even reduce price depending on demand.

Simple economics. Just because a stupid politician doesn’t understand doesn’t make him right.

I don’t know if the bill is a good idea or if it is corporate welfare, but the quote doesn’t make any sense.

[quote]doogie wrote:
buffballswell wrote:

With prices soaring, “oil companies now have all the profits and incentives they need to build new refineries” without government help, he maintained.

Why would oil companies waste their money buiding refineries that would ultimately lower their profit margin? Of course it is going to take tax breaks to make it worth their while.

[/quote]

And why should oil companies get tax breaks, why not give tax breaks to all big corporations?

One thing more refineries won’t do is bring down the price of crude…

[quote]vroom wrote:
One thing more refineries won’t do is bring down the price of crude…[/quote]

Yes it would.

[quote]buffballswell wrote:

And why should oil companies get tax breaks, why not give tax breaks to all big corporations?

[/quote]

To bring down the price of gas and stimulate the economy?

Really? Refineries increase the supply of crude nowadays?

Will wonders never cease!

[quote]vroom wrote:
Yes it would.

Really? Refineries increase the supply of crude nowadays?

Will wonders never cease![/quote]

haha " Will wonders never cease" ! they should put up the funny quotes of the day up on the forum boards or somethings. Gets my vote.

[quote]vroom wrote:
Yes it would.

Really? Refineries increase the supply of crude nowadays?

Will wonders never cease![/quote]

They do everything nowadays, those oil refineries.

[quote]vroom wrote:
Yes it would.

Really? Refineries increase the supply of crude nowadays?

Will wonders never cease![/quote]

I was just being argumentative there.

If y’all would like a 2nd topic here’s one:

anybody got opinions on bushy’s new proposals for future energy bills ? like promoting nuclear power and other alternative energy supplies.

The constraint is not supply it is the capacity to refine it into gasoline. The constraint causes the price to rise.

The oil companies are not refining oil they bought at “$10/bbl” a long time ago. That would have been how many years ago…10…20. The cost to store it for that long would destroy your argument.

Yes more refineries will cause prices to drop. The reason gas prices spiked is because refining capacity was hurt due to Katrina.

Oil companies will build more capacity if it makes economical sense to do so. They sold them off many years ago because it was not profitable to own them and exploration made more of a profit. This is often lost on academics and socialists but understood quite well by businessmen. It’s not popular to support big oil so the Dems will distance themselves from this bill to the detriment of the public in general in the form of higher gas prices.

[quote]thabigdon24 wrote:
If y’all would like a 2nd topic here’s one:

anybody got opinions on bushy’s new proposals for future energy bills ? like promoting nuclear power and other alternative energy supplies.[/quote]

I don’t think nuclear power will ever take off. There’s still no one who wants it near them. Hell, I wouldn’t.

even more of an issue then not wanting nuclear power plants near them, in my opinion, is not wanting the radioactive waste stored anywhere

Thanks Vroom and Hedo for breaking through the simple minded thinking that leads people to believe that more refineries lead to cheaper crude. Thats why it is crude. Because it is un-refined. New refineries will do a good deal to hep rectify the deficit on the supply of refined fuels side, but how about demand?

I’ve noticed that most families now have several cars and of those usualy one s.u.v. The common theme around here seems to be that everybody in the family needs a car for one reason or another. I’m not talking about in affluent communities either. This seems to be the norm even in middle class. Have any of you noticed this too?