Is The Oil Industry Purposely Driving Up Gas Prices?

[RCPJAP]

First Senator Boxer, now State Attorney General Bill Lockyer is asking for transcripts of what an oil refinery executive said about limiting supply - comments made in front of our cameras, by one of the country's biggest independent refiners.

Bill Lockyer saw our story and now wants a transcript of what oil refinery president Hank Kuchta said to fellow refiners at last month's conference. What that refiner said conflicts with oil company explanations of high prices based on supply and demand.

(Snip)

Hank Kuchta, President & COO of Premcor (3/10/05): "If we go in and we start expanding like crazy before the demand gets there, that's the shoot yourself in the foot theory, and we'd all be the opposite of geniuses, you pick the word. They'd kill us, believe me."

Hank Kuchta is president of Premcor, an independent oil refiner with the capability of processing nearly 800,000 barrels a day. But Kuchta told his fellow refiners his company doesn't want to produce as much gasoline as it can because that might flood the market and drive down prices.

(Snip)

Yesterday, California Senator Barbara Boxer called the Federal Trade Commission to investigate Premcor.

So far, the company won't admit that a copy of the speech even exists.

Mark Matthews: "What did Premcor tell you when you called and asked for a opy of the speech?"

Lockyer: "Well they told us they'd get back to us."

Premcor told us the same thing. We are still waiting for their response. As we reported yesterday, Senator Boxer is asking for the Federal Trade Commission to investigate, and today the FTC called our general manager here at ABC7 to make sure that we preserve our tapes.

http://abclocal.go.com/kgo/news/politics/print_041405_politics_oil.html

[Trajan]

1. Is the Pope Catholic ???.

Sheeesh .... EVERYTHING is ENRONizable to those FUCKS in the GOP ...

If they can GOUGE .. if they can CHEAT .. if they can MANEUVER .. if they can subvert, lie, obfuscate, deny, gainsay, and pilfer

.... T H E Y .. W I L L ! ! ! .....

[Lexingtonian]

2. Is water wet?

They've being doing this sh-t to the California gasoline market every summer for at least ten or fifteen years, fine tuning the game of artificial shortages and waiting for the day they could do it to the country as a whole. I figured it out by my second summer in SoCal.

[Gregorian]

3. This may be totally unimportant, but

there is such a thing called off-road gas. I have never heard of it in all of my years. Right now, they are complaining that it's $1.92 per gallon. I don't know anything more. Maybe it's cheaper because of any number of things.



I still have a hard time fathoming that it's all from dinosaurs. Reminds me of Niel on The Young Ones- the dinosaurs ate the vegetation, and nature turned their dead bodies into oil. Man, I really ought to be sleeping. I'm weird enough when awake.

[tabasco]

18. The oil is from decomposed vegetation, not dinosaurs n/t

[Toots]

21. Boats buy "off road gas" and the reason it is cheaper is no road tax

Road tax accounts for about thirty cents on the gallon. It is a reasonable tax on the users. boats don't use the road system so they don't pay the tax.

[tapper]

29. Tractors

Besides boats (mentioned above), I believe the non-taxed gas (and diesel) also applies to farm equipment (if I recall correctly from my growing up as a farmer's daughter.)

[pdurod1]

4. What about the energy task force, Cheney headed up?

Where's this in the media? Oh, I forgot the news is owned by big corporations now. My take: It's all scripted baby. Let it break and here comes the rethugs and globalists to fix it --their way. In the meantime cardboard cities dot the countryside. People freeze to death, starve to death, dehyrate (shaivo flashbacks anyone). America smells like a third world country.

[Voltaire99]

5. Let Johnny Rotten answer this perennial question...

"If you look like an arsehole, and talk like an arsehole, then you are an arsehole!"

[SKKY]

6. Is a frog's ass water-tight?

[dethl]

7. To the oil companies, its just a game

Supply and demand, and they've fixed it in their favor.

[kysrsoze]

8. What other industry does not compete on price?

Hell, even Speedway is now among the most expensive. They think their drink fountains and shitty coffee make up for it. Citgo seems to be one of the only discount gasoline companies.

It's all a scam. I live in the city of Chicago, but there are places you can get it as cheap as in the suburbs. The burbs used to be about $.15 cheaper everywhere and now they're about the same at almost every station. That should tell people something - unfortunately so few get it.

[cornermouse]

9. Well....

We could always nationalize them... IF they don't have any loyalty to the nation, why should we protect them?

[rooboy]

10. Agree. Nationalize the bastards if they can't play fair. n/t

[Barkley]

22. If they were nationalized, I hate to imagine who Bush would appoint...

to head the energy dept....

[truthisfreedom]

11. aww... you don't suppose the oil people will be exposed, do you?

and the bushishtas wil be at a loss for words? like usual?

being hitler never felt so good, huh george?

[wolfgirl]

12. were the 2000 & 2004 elections stolen? n/t

[megatherium]

13. Maybe not the result of active collusion

but as it happens, all the gas you get in your hometown arrives through the same pipeline, all brands mixed together (they'll add their own brand-name additives before trucking it to the gas stations).

Also there's only so many refineries, they haven't built a new one since 1976; this limits the amount of gas that can be produced. The industry doesn't want to build more because they're expensive, and demand for gas will drop as it becomes scarcer and more expensive.

The industry must be enjoying the profits right now, but if the price gets too high, people will seek alternatives or conserve. So they can't let prices go too high. However, they might not have as much control over things as they would like -- world petroleum production appears to match world petroleum demand, but production can't seem to be increased (the Saudis have promised to do so but seem unable); and demand is still going up.

So I think this is less a conspiracy (a la California electricity in 2003) and more just simple supply and demand. I'm not a peak-oil paranoid, but the days of cheap oil are gradually going away for sure.

[mhr]

14. The Question Is When Was The Last Refinery Built In The US?

As I understand it this was over 20 years ago.

So, is it plausible that twenty years ago the "oilmen" were so prescient that they knew what oil demand and supply would be twenty years hence? I don't think so.

[wishlist]

15. Record profits reported by the companies indicate price gouging to me

Although crude oil dropped from $58 to $50 in the past couple of weeks, gas prices at the pump haven't dropped even a penny in my area yet. Usually pump prices here reflect significant crude oil fluctuations at least within a week, but not so far this time even though demand should be down with spring break travel over and summer vacation travel not begun yet.
You can bet that this Administration will not initiate or facilitate any investigations of price manipulation by their oil industry buddies without coercion, so that is great Sen. Boxer is getting onto it.

[Frederik]

28. Let the good times roll

Royal Dutch Shell:
· Record 2004 net income of $18.5 billion

· Strong downstream profits and asset utilisation

· Record $33 billion cash from operations and divestments


http://news.bbc.co.uk/2/hi/business/4223573.stm
Exxon Mobil profits exceed $25bn

US oil giant Exxon Mobil made a record $25.3bn (£13.4bn; 19.4bn euros) profit in 2004 as it benefited from the surge in crude oil prices.

The world's largest public oil company saw income from exploration, production and refining soar despite a decline in the amount of oil and gas produced.

Revenues hit a record $298bn as worries over disruption to oil supplies in Iraq, Nigeria and Russia lifted prices.

Exxon Mobil's profits rose to $25.33bn from $21.51bn last year, on revenues up 17% to $298bn.

Along with the world's other biggest oil producers, Exxon Mobil benefited from the giddy rise in crude oil prices last year.

The Texas-based company exceeded market expectations with its performance, which also broke records for the fourth quarter of 2004.

It made an $8.4bn quarterly profit - its highest ever - on revenues of $83.3bn.

[Moderator]

16. RCPJAP

Per DU copyright rules
please post only four
paragraphs from the
copyrighted news source.


Thank you.


DU Moderator

[w4rma]

17. Yes. (nt)

[Barkley]

19. CA added 16 million cars since 1969 but no new refineries

How many new prisons has CA built since 1969?

"California's population has shot up 16.4 million people since 1970 -- and 16.2 million automobile registrations -- but no new oil refineries have come online since 1969."

Ref:
$3 = breaking point
Will Californians swallow gas prices or drive less?
dailynews.com

[KansDem]

20. Remember when Democrats took control of the Senate during Bush's 1st term?

They said they would investigate the upward crawl of gasoline prices occurring then. Guess what? If I recalled correctly, the price of gasoline dropped the very same day the Democrats announced their intentions!

So yeah, the oil industry is purposely driving up the price of gas...

[Barkley]

23. Yep, and CA energy shortage also came to end around that time too

Talking tough to the energy companies is really what got
Gray Davis in hot water.

Arnold's been awful quiet on the topic of gas prices and energy.

[agincourt]

24. Thanks for reminding us of that.

and kudos for anyone on this board who keeps things out of the memory hole. God knows we have a national news media that ignores important facts constantly.

[chlamor]

25. Wrong Question- The Real Price of Gas is

THE REAL PRICE OF GAS
An Executive Summary
by the Campaign on Auto Pollution (CAP),
310 D St., N.E., Washington, DC 20002
For a copy of the full report, contact:
CTA at 202-547-9359, or www.icta.org

The report divides the external costs of gasoline usage into five primary areas: (1) Tax Subsidization of the Oil Industry; (2) Government Program Subsidies; (3) Protection Costs Involved in Oil Shipment and Motor Vehicle Services; (4) Environmental, Health, and Social Costs of Gasoline Usage; and (5) Other Important Externalities of Motor Vehicle Use. Together, these external costs total $558.7 billion to $1.69 trillion per year, which, when added to the retail price of gasoline, result in a per gallon price of $5.60 to $15.14.

TAX SUBSIDIES

The federal government provides the oil industry with numerous tax breaks designed to ensure that domestic companies can compete with international producers and that gasoline remains cheap for American consumers. Federal tax breaks that directly benefit oil companies include: the Percentage Depletion Allowance (a subsidy of $784 million to $1 billion per year), the Nonconventional Fuel Production Credit ($769 to $900 million), immediate expensing of exploration and development costs ($200 to $255 million), the Enhanced Oil Recovery Credit ($26.3 to $100 million), foreign tax credits ($1.11 to $3.4 billion), foreign income deferrals ($183 to $318 million), and accelerated depreciation allowances ($1.0 to $4.5 billion).

<snip>

ENVIRONMENTAL, HEALTH AND SOCIAL COSTS

Environmental, health, and social costs represent the largest portion of the externalized price Americans pay for their gasoline reliance. These expenses total some $231.7 to $942.9 billion every year. The internal combustion engine contributes heavily to localized air pollution. While the amount of damage that automobile fumes cause is certainly very high, the total dollar value is rather difficult to quantify. Approximately $39 billion per year is the lowest minimum estimate made by researchers in the field of transportation cost analysis, although the actual total is surely much higher and may exceed $600 billion.

Considering that researchers have conclusively linked auto pollution to increased health problems and mortality, the CTA report's estimate of $29.3 to $542.4 billion for the annual uncompensated health costs associated with auto emissions may not adequately reflect the value of lost or diminished human life. Other costs associated with localized air pollution attributable to gasoline-powered automobiles include decreased agricultural yields ($2.1 to $4.2 billion), reduced visibility ($6.1 to $44.5 billion), and damage to buildings and materials ($1.2 to $9.6 billion). Global warming ($3 to $27.5 billion), water pollution ($8.4 to $36.8 billion), noise pollution ($6 to $12 billion), and improper disposal of batteries, tires, engine fluids, and junked cars ($4.4 billion) also add to the environmental consequences wrought by automobiles.

http://www.lightparty.com/Energy/PriceOfGas.html

[depakid]

26. Gee, do ya think?

They've been doing tis sort of thing for years. During the 90's Clinton let them get a way with massive fraud for years on the West Coast. Senator Wyden actually investigated it and came out with a report proving conclusively that they manipulated the markets to jack up prices.

Did the Clinton administration do ANYTHING about it? No.

hell, if I were running a major company, and I knew I could engage in illegal begavior that would unjustly enrich my profits- I'd be sorely tempted to do it- if I knew there's no way I'd ever be prosecuted or otherwise called to account.

[wallwriter]

27. It's Enron all over

Those f***heads purposefully caused a shortage of electricity and a panic in California totally unnecessarily in order to drive up the price of energy and make massive profits. Meanwhile, they let the quality and maintenance of the nation's powergrid deteriorate dangerously when they should have paid for necessary upgrades.

The same is happening with gas. They are perfectly happy to see the price go up to abut $3 a gallon or higher, because they know demand is inelastic--people will buy the same amount.

It's the same thing manipulation of mass markets for mass profits while the infrastructure crumbles.