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Getting Better Transparency From Oil Refineries

samzenpus posted about a year and a half ago | from the bang-for-your-buck dept.

Power 217

Hugh Pickens writes "Gregg Laskoski reports in U.S. News and World Report that virtually all of the retail gasoline price volatility that Americans experienced this past year was connected to significant problems at refineries. It was those refineries' vulnerability that subjected U.S. consumers to the year's highest average price ever, $3.63 per gallon. February delivered the BP refinery fire in Cherry Point, Washington that led to gasoline price spikes all along the Pacific coast, refinery problems in the Great Lakes region pushed Chicago gas prices to an all-time high of $4.56 per gallon, and over the summer, west coast refineries incurred outages, and California saw record highs in most markets, with Los Angeles gasoline's average price peaking at $4.72/gallon in October. Finally after Reuters reported that some 7,700 gallons of fuel spilled from Phillips 66's Bayway refinery in Linden, NJ, after Hurricane Sandy, New Jersey environmental protection officials said they were not made aware of a major spill at the Bayway plant, and the refinery failed to respond to inquiries from Reuters reporters. 'Too many times, history has shown us, the Phillips 66 response or lack thereof characterizes the standard practice of the oil industry. Refineries often fail or are slow to communicate problems that create significant disruptions to fuel supplies and spikes in retail gasoline prices. More often than not, scant information is provided reluctantly, if at all,' writes Laskoski. 'When such things occur is silence from refineries acceptable? Or does our government and the electorate who put them there have a right to know what's really going on?'"

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Speculators (5, Interesting)

Anonymous Coward | about a year and a half ago | (#42578069)

Speculators demand more transparency so they can jack the price of futures every time a breaker trips at a refinery.

Speculation is already in play ... (4, Interesting)

DavidClarkeHR (2769805) | about a year and a half ago | (#42578173)

Speculators demand more transparency so they can jack the price of futures every time a breaker trips at a refinery.

One of the reasons that gas prices fluctuate overnight is due to speculation - this is just another way of attempting to democratize the "open" market.

As I understand it, the price of crude changes quicker due to speculation than to any other factors - can you think of another item where demand and/or supply will affect the prices on the same level (not due to speculation)?

Re:Speculation is already in play ... (2, Insightful)

jhoegl (638955) | about a year and a half ago | (#42578335)

I speculate I want more money.
Now who is laughing all the way to the bank?
Speculation is bullshit, it is simply a form of legalized gambling.

Re:Speculation is already in play ... (1)

Cryacin (657549) | about a year and a half ago | (#42578705)

Goldman Sachs et al would beg to differ, considering they would be the casino.

Re:Speculation is already in play ... (5, Interesting)

TubeSteak (669689) | about a year and a half ago | (#42578359)

April 17, 2012
http://money.cnn.com/2012/04/17/markets/obama-oil-speculators/index.htm [cnn.com]

The new proposals require oil traders to put up more of their own money for transactions, ask for more money for market enforcement and monitoring activities, and call for higher penalties for market manipulation.

"None of these will bring gas prices down overnight," Obama said at a White House press. "But they will prevent market manipulation, and help protect consumers."

I think we should just kick speculators out completely, but then again,
I also think that fair, competitive, and transparent markets are better than "free" markets.

The numbers I've seen quoted are that the oil market is 70% speculators and 30% producers/users.
Historically, that number has been the opposite, with producers/users makeing up 70% of the market.

I'm not disputing that refinery problems are responsible for localized price spikes, but overall prices have gone up because speculators are moving the market towards higher prices.

The Book (2)

decora (1710862) | about a year and a half ago | (#42578401)

Leah McGrath Goodman, a financial reporter, wrote a book about Nymex and the transition to electronic trading in the early 2000s. It's called "The Asylum" and verifies a lot of what you guys are saying.

Except that the regulators in the government are kind of... on the 'same team' . . . the head of the CFTC left and to work for the New York Mercantile Exchange. She documented the whole thing. Hell of a story.

Re:Speculation is already in play ... (1)

davester666 (731373) | about a year and a half ago | (#42579187)

Same with food "futures"...

Re:Speculation is already in play ... (0)

Anonymous Coward | about a year and a half ago | (#42578943)

> can you think of another item where demand and/or supply will affect the prices on the same level (not due to speculation)?

Games with a collectible resource (or almost any collectible market with a competitive scene). CCGs, mmo markets, etc. In CCGs this is mitigated by resource windows (cards are only valuable while legal or until rules are reinterpreted/revised). In MMOs, resources are consumed and affected by inevitable currency fluctuations. Those are the only markets that act similarly, that I can think of.

Re:Speculators (2)

ozmanjusri (601766) | about a year and a half ago | (#42578471)

Speculators demand more transparency so they can jack the price of futures every time a breaker trips at a refinery.

RSS feeds like ASM's process safety incidents list [asmconsortium.net] are available and useful for keeping track of what's happening at refineries (of all types) around the world. That sort of transparency is valuable to far more people than just speculators.

Reporting to a public-facing list like this should be mandatory for all significant process industries. Transparency should be the norm, not the exception.

Re: Speculators (1)

Anonymous Coward | about a year and a half ago | (#42578967)

The oil futures market is too big for a speculator to corner. They don't care if price is going up or down because they can profit either way. Also remember this is a zero sum game.

You voted for it (-1, Flamebait)

Anonymous Coward | about a year and a half ago | (#42578073)

Keep electing energy hostile rulers. It's going to get much worse no matter how much you hound the refiners.

You bend yourself over a barrel every time you do that. Don't like it? Walk.

Fuel isn't made with love and bunny kisses.

Re:You voted for it (-1, Flamebait)

rally2xs (1093023) | about a year and a half ago | (#42578095)

Yep. Its the bending over for the envirowackos to screw American society that is doing this. Nothing deserves ignoring more than an envirowacko. Build more refineries, bigger refineries, and we won't have this nonsense. How do you tell when an envirowacko is lying? When his lips are moving. Just say no. Etc.

Re:You voted for it (1)

ColdWetDog (752185) | about a year and a half ago | (#42578297)

Cut
Kill
Dig
Drill

Love, Sarah P.

Re:You voted for it (2)

pepty (1976012) | about a year and a half ago | (#42579005)

Build more refineries, bigger refineries, and we won't have this nonsense

Er, by nonsense you mean higher profit margins every time a refinery goes down? Guess who goes "envirowacko" and lobbies against competitors building new refineries based on environmental grounds? Guess who reports their refineries are down and enjoys the spike in prices while their refineries are actually still producing and they are stockpiling gasoline?

Re:You voted for it (2)

sjames (1099) | about a year and a half ago | (#42578337)

There is nothing inherently hostile about demanding transparency.

Yes, better transparency! (1, Insightful)

Anonymous Coward | about a year and a half ago | (#42578101)

Why don't fuel pumps mention the $0.18/gallon federal gasoline tax? Or the $0.38/gallon (California) state gasoline tax? Both are greater profit margin than the "greedy" store, the "greedy" refiner, or the "greedy" oil company.

Re:Yes, better transparency! (4, Interesting)

Frosty Piss (770223) | about a year and a half ago | (#42578155)

Why don't fuel pumps mention the $0.18/gallon federal gasoline tax? Or the $0.38/gallon (California) state gasoline tax? Both are greater profit margin than the "greedy" store, the "greedy" refiner, or the "greedy" oil company.

The state and federal gas tax pays for things like roads. You do like to drive on roads, yes? Well, they don't just pop up and maintain themselves...

By the way, what where Exxon and BP's reported profits last year?

Re:Yes, better transparency! (0, Insightful)

Anonymous Coward | about a year and a half ago | (#42578479)

So you are opposed to transparency when it might hurt something you approve of. Interesting.

I take it you think of a cudgel against the oil companies and not a means to keep the public informed.

Re:Yes, better transparency! (0)

the eric conspiracy (20178) | about a year and a half ago | (#42578513)

Less than what the government collected in gas taxes by a long shot.

Re:Yes, better transparency! (0)

Anonymous Coward | about a year and a half ago | (#42578979)

Because Gas Taxes are spent on Caviar and Hookers, right?

Re:Yes, better transparency! (-1, Offtopic)

Anonymous Coward | about a year and a half ago | (#42578547)

Taxes also go to funding gun running to Mexican drug cartels. They also pay for coverups when those gun running operations end up killing hundreds in Mexico and one of our border patrol. Those taxes also pay for drones to kill Americans caught in Yemen.

So, I would be fine with the federal part of that tax going away and not having the federal government pay for those roads. Instead let my state collect taxes and pay for it. My state government isn't putting citizens on "kill lists" or making secret "no fly lists".

By the way, what was the Federal Governments reported profits last year, and what did they actually spend of that?

Re:Yes, better transparency! (1)

cffrost (885375) | about a year and a half ago | (#42578997)

My state government isn't putting citizens on "kill lists" or making secret "no fly lists".

I'm not saying you're wrong, but that's not necessarily true. Collusion between US federal and state governments against Americans is generally increasing.

For a few examples of what I'm talking about, please see some of the incidents of abuse listed under criticisms of fusion centers on Wikipedia. [wikipedia.org]

Re:Yes, better transparency! (1)

mysidia (191772) | about a year and a half ago | (#42578647)

The state and federal gas tax pays for things like roads. You do like to drive on roads, yes? Well, they don't just pop up and maintain themselves...

Last I checked, the price to pay for things like roads doesn't scale proportionally with the price of gas. The fact that gas went from $1.50 to $3 a gallon on some day , doesn't now mean the roads require twice as much money to pay for them.

The states get a proportional increase in tax; which is a mass 'hidden' tax increase, that they get to blame the oil companies on.

Re:Yes, better transparency! (1)

Tagged_84 (1144281) | about a year and a half ago | (#42578757)

Wouldn't the increase in price result in a decrease in demand? Resulting in the government requiring a greater percent of revenue to offset the drop in fuel consumption? Roads don't just degrade from usage you know, and because first world countries were stupid enough to plan and build for personal vehicles rather than mass transport we all require excess costs to compensate those drivers.

I'm 28 and have never driven in my life, the cost doesn't appeal to me and Australia has a semi-decent public transport system to get by on. Failing that I've got tree trunks for legs to cycle/run at *most* other times, I ran a short 4k last week during the heat wave and found it a little uncomfortable!

Re:Yes, better transparency! (1)

JDevers (83155) | about a year and a half ago | (#42578799)

Last I checked, the price to pay for things like roads doesn't scale proportionally with the price of gas.
The fact that gas went from $1.50 to $3 a gallon on some day , doesn't now mean the roads require twice as much money to pay for them.

The states get a proportional increase in tax; which is a mass 'hidden' tax increase, that they get to blame the oil companies on.

Why would a per gallon charge scale up when the cost of gasoline rises? 15 gallons is 15 gallons whether it costs 1 dollar or 100 to purchase.

If anything, as fuel efficiency increases the amount of money states are collecting via the fuel tax is shrinking, not rising.

Re:Yes, better transparency! (1)

riverat1 (1048260) | about a year and a half ago | (#42579057)

As far as I know fuel taxes are fixed and don't vary with the price of fuel. That's certainly true in my state and for federal gas taxes. Do you know of any state(s) where the fuel tax is a percentage of the price? So for your example if the per gallon tax is $0.50 that's what is collected whether you pay $1.50 or $3.00.

Re:Yes, better transparency! (5, Informative)

wallsg (58203) | about a year and a half ago | (#42578745)

By the way, what where Exxon and BP's reported profits last year?

Annual 2012 reports not out yet in most part so these are quarterlies.

* signifies Dow Jones Industrial Average component.

Apple's profit margin was 26.67% [yahoo.com] .
Google's was 22.20% [yahoo.com] .
*Intel's was 22.13% [yahoo.com] .
*JPMorgan Chase's was 21.97% [yahoo.com] .
*McDonald's was 19.85% [yahoo.com] .
*Coca-Cola's was 18.48% [yahoo.com] .
*Cisco's was 17.90% [yahoo.com] .
*American Express' was 17.12% [yahoo.com] .
*Pfizer's was 15.58% [yahoo.com] .
*IBM's was 15.53% [yahoo.com] .
*3M's was 14.89% [yahoo.com]
*Microsoft's was 14.21% [yahoo.com] .
*Walt Disney's was 13.44% [yahoo.com] .
Ford's 3rd quarter profit margin was 13.35% [yahoo.com] .
*Johnson & Johnson's was 12.90% [yahoo.com] .
*Proctor & Gamble's was 12.72% [yahoo.com] .
*Travelers' was 10.87% [yahoo.com] .
*Chevron's was 10.70% [yahoo.com] .
*Exxon's 3rd quarter profit margin was 10.40% [yahoo.com] .
*Catapillar's was 9.74% [yahoo.com] .
*GE's was 9.39% [yahoo.com] .
*United Technologies Corp's was 7.57% [yahoo.com] .
*Bank of America's was 6.75% [yahoo.com] .
*Merck's was 6.58% [yahoo.com] .
*DuPont's was 6.07% [yahoo.com] .
*Home Depot's was 5.91% [yahoo.com] .
*Boeing's 3rd quarter profit margin was 5.47% [yahoo.com]
*UnitedHealth Group's was 5.14% [yahoo.com] .
BP's 3rd quarter profit margin was 4.75% [yahoo.com] .
*Wal-Mart's was 3.57% [yahoo.com] .
Pulte Homes' was 3.57% [yahoo.com] .
*AT&T's was 3.49% [yahoo.com] .
*Verizon's was 2.70% [yahoo.com] .
*Alcoa's was 0.81% [yahoo.com] .
*Hewlett-Packards was -10.51% [yahoo.com] .

This a long line because for some reason SlashDot is saying that "Your comment has too few characters per line (currently 20.4)" but I don't know the minimum and why is there a minimum require when a person may be wanting to report facts and I have to keep typing because now it's 25.7 per line which still isn't enough nor is 27.3 characters per line so I must keep typing yet more meaningless stuff here in an attempt to get even more characters per line because even 30.4 characters per line are not enough so even more typing typing typing (where are the infinite number of monkeys when you need them?) because 33.1 characters per line still isn't enough so row, row, row your boat while buying the stairway to heaven as 35.5 characters per line are still not enough and "you seem a decent fellow I hate to kill you" " you seem a decent fellow I hate to die" and 38.2 characters per line are still not enough "we'll never survive" "nonsense. you only say that because no one ever has" and finally we have enough. To the Pain.

Re:Yes, better transparency! (0)

Anonymous Coward | about a year and a half ago | (#42579033)

Do you think the oil, tankers, refineries, explorations, etc all "just pop up and maintain themselves"?

Re:Yes, better transparency! (2)

Impy the Impiuos Imp (442658) | about a year and a half ago | (#42579063)

And you have "governmental" interference in MMO economies, too. Namely:

- Artificial price supports by vendors offering to buy things, giving a floor to the minimum auction house price.

- Artificial restriction by bind-on-pickup or equip, causing artificial scarcity to...prevent the capitalist market from finding the natural price, which would be significantly lower.

- How hard would you grind if 30-50% of your stuff was taken and distributed to others who didn't grind?

-
-

Re:Yes, better transparency! (1)

Todd Palin (1402501) | about a year and a half ago | (#42578195)

I often see that information on gas pumps in Oregon and other places. I don't know if it is required, or out there as an FYI. Also, remember that these gas taxes were mostly established before the price went up to $3+ per gallon. If the taxes were as a percentage of the price, they would be far higher than they are now. Finally, gas taxes are one of the few taxes where the benefits seem obvious to most people. Imagine what life would be like without safe bridges, road resurfacing, and the other things that fuel taxes pay for. Our road taxes are a pretty good investment.

Re:Yes, better transparency! (0)

Anonymous Coward | about a year and a half ago | (#42578763)

Our road taxes are a pretty good investment.

This video [youtube.com] shows otherwise.

Re:Yes, better transparency! (1)

cffrost (885375) | about a year and a half ago | (#42579113)

Our road taxes are a pretty good investment.

This video [youtube.com] shows otherwise.

So does this one. [youtube.com] Well, sorta... but mine's more fun to watch.

Re:Yes, better transparency! (0, Flamebait)

Anonymous Coward | about a year and a half ago | (#42578229)

Because then they'd also have to print all the things those taxes pay for, and how much more taxes are left to cover other things.

Sorry you anti-government fraudster, but ever asserting that it's a profit margin is base dishonesty.

Re:Yes, better transparency! (1)

Anonymous Coward | about a year and a half ago | (#42578245)

What about the overhead that goes into military power to "secure" (install friendly governments) in places that have oil? Why isn't that included in the price of gasoline? What about the massive subsidies that oil companies receive? How come that isn't listed at the pump?

Re:Yes, better transparency! (0)

Anonymous Coward | about a year and a half ago | (#42578625)

Which subsidies are those? Surely you can point out some specific ones. Or maybe in your world, deducting expenses is a subsidy of some sort?

Re:Yes, better transparency! (1)

Anonymous Coward | about a year and a half ago | (#42578649)

Why don't fuel pumps mention the $0.18/gallon federal gasoline tax? Or the $0.38/gallon (California) state gasoline tax?

Because you aren't looking for it? It's printed on every pump (in California, at least), usually above the screen, or on the side of the pump.

The tax is also counted on the advertised price of gasoline, like it should be.

The price you see is the price you pay, unlike practically everything else in the United States.

Blame Regulation (2, Insightful)

Anonymous Coward | about a year and a half ago | (#42578103)

Regulators (state & federal) have forced refineries to shut down or prevented them from being built in the first place.

NIMBY'ism is also a factor.

Then there is the problem of too many different fuel blends. Dozens across the US, with a small number of refineries servicing each area.

The result of all this, combined, is that a single refinery going down causes huge issues.

Reduce the number of fuel blends across the country. Dont make it take 10+ years just for the possibility to build a new refinery because of all the hoops. More supply == less volatility.

[Citation needed] (0)

Anonymous Coward | about a year and a half ago | (#42578825)

1) Why do new refineries need to be built when companies are meeting capacity by upgrading and retrofitting old ones?

2) Please provide an example where regulation has "forced refineries to shut down or prevented them from being built in the first place."

Re:Blame Regulation (0)

Anonymous Coward | about a year and a half ago | (#42578991)

"NIMBY'ism is also a factor."

You just volunteered to live next door to a flare! What's a couple hundred gallons per minute of hydrocarbons getting burned a couple times a year by your next door neighbor? Those fires are pretty, and that thick toxic smoke makes sunsets so much more wonderful you'll forget about your emphysema and lung cancer.

Do you really have to ask? (0)

Anonymous Coward | about a year and a half ago | (#42578133)

Considering that the American oil industry is one of the most heavily subsidized industries in the country, yes, the tax payers that are funding them have the right to know what they're doing.

Willfull ignorance certainly a factor (3, Insightful)

gestalt_n_pepper (991155) | about a year and a half ago | (#42578139)

They suffer from "political myopia." They can't really be bothered to notice occurrences in the physical world. Only politics is real to them. So, like the Roman emperors who couldn't be bothered to attend to their water systems or roads, our government can't be bothered to look at refineries, or how net energy from hydrocarbons is declining even as supplies increase, or what happens when the potash is all mined out, or what happens when a few more major aquifers are completely drained. They won't be in office by then, they figure. It'll be someone else's problem.

Re:Willfull ignorance certainly a factor (0)

Anonymous Coward | about a year and a half ago | (#42578197)

Worse still, I think many know what is going on but they're getting shovels full of cash to do the opposite of the public good. I just don't think Congress is serving the people anymore, but serving themselves. I feel like the purpose of governments anymore is to borrow lots of money and give to the wealthy until the government collapses on itself. An example of this obviously is the bank bailout. But in general it is all the numerous government contractors being given juicy deals. By borrowing lots of money(national debt), the politicians give to the people who give them campaign contributions. And then both of them make money at the expense of the tax payers.

Thin margins (3, Informative)

Jungle guy (567570) | about a year and a half ago | (#42578149)

Contrary to what some might expect, not everycompany in the oil industry is making a lot of money these days. With the spike in the Brent crude price, the refineries have, in fact, seen their margins getting thinner every day. As some refineries are in the brink of losing money, dont expext much investment on security or enviroment from them. The only possible solution? The regulator could tighten security requirements, forcing the bad refineries out of business and making the others have a better security performance. The downside? Gasoline prices will go out, as the gasoline from the old refineries will no longer go to the market. I don't know if the american government is willing to pay this price.

Re:Thin margins (-1)

Anonymous Coward | about a year and a half ago | (#42578217)

Yeah... Unless I see some numbers I'm going to call bullshit on this one.

Re:Thin margins (0)

Anonymous Coward | about a year and a half ago | (#42578251)

oh those poor babies, tighter margins means they might not have a record breaking profit this year

Re:Thin margins (1)

peragrin (659227) | about a year and a half ago | (#42578275)

Just think about this. Those oil refineries with thin margins wanted the tax payers to build a pipeline from Canada for them.

I have done the math and have seen just how thin their margins are(5% is typical profit)

the other trick is those same refineries are shipping the refined gasses overseas for higher margins(good business).

Re:Thin margins (0, Informative)

Anonymous Coward | about a year and a half ago | (#42578299)

Those oil refineries with thin margins wanted the tax payers to build a pipeline from Canada for them.

Liar.

The Keystone XL was to be privately funded... they just needed the permission of the state & federal governments... and your boy Obama said no. ...and people called Bush an Imperial President... and now ignore far worse actions.

Re:Thin margins (0)

Anonymous Coward | about a year and a half ago | (#42578321)

yes not allowing a pipeline funded with privately held tax payer subsidies is far worse than starting a nearly decade long war in the WRONG FUCKING COUNTRY

you sir are a genius

Re:Thin margins (-1, Flamebait)

Anonymous Coward | about a year and a half ago | (#42578425)

tax payer subsidies

Typical brain dead liberal... repeating things you've heard your leaders say over and over again and assume it is true... but never looking into the facts.

The dirty little secret is that the big bad oil companies are not taking in oddles of tax payer subsidies... the big boys were exempted from many of the tax advantages which are being vilified... or are things which are available to nearly all companies in nearly all industries.

nearly decade long war in the WRONG FUCKING COUNTRY

Again... a brain dead liberal... one who has either forgotten the lead up to the war in Iraq... or never was paying attention.

Re:Thin margins (0)

Anonymous Coward | about a year and a half ago | (#42578861)

Again... a brain dead liberal... one who has either forgotten the lead up to the war in Iraq... or never was paying attention.

I'm pretty sure you both have your shoes are on backwards. Nothing Gas & Oil has done since 'we' decided to protect its interests in the mid-east has been done without subsidy to the industry. If nothing else, its ability to pollute at will, without ever having to clean it up, is a subsidy the general public pays for in healthcare costs as well as clean up after the fact. Mercury, sulfur-dioxide, nitric-oxide and their associated environmental costs have NEVER been born directly by the industry. Not to mention the cost of security. Think of just how much it costs to maintain the 5th fleet in Bahrain or the $50 billion dollars we've spent on a single air base in Saudi Arabia. Then tell me why you think we'd be there without mentioning the stability of Big Oil. Saudi Arabi & Bahrain aren't exactly democratic countries, so it's certainly not to maintain the world supremacy of democracy. And if Big Gas ever had to cover even 50% of costs that Tobacco has been made to *cough* up, we might not have had the stellar rates of growth since WWII, but we'd all be healthier for having slowed the rate of *consumption*.

And last I checked, there has never been a hint of legitimacy to ANY of the arguments made publicly by the Bush League #2.

So whatever you 2 are smokin', stop it!

Re:Thin margins (0)

Anonymous Coward | about a year and a half ago | (#42578947)

"one who has either forgotten the lead up to the war in Iraq"

you mean things like weapons of mass destruction?

Typical brain dead republican... repeating things you've heard your leaders say over and over again and assume it is true

Re:Thin margins (2)

pepty (1976012) | about a year and a half ago | (#42579111)

The dirty little secret is that the big bad oil companies are not taking in oddles of tax payer subsidies... the big boys were exempted from many of the tax advantages which are being vilified... or are things which are available to nearly all companies in nearly all industries.

"Among the top 10 most profitable companies, energy companies ConocoPhillips (NYSE: COP), Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) were on the low end of the list, paying 8 percent, 4 percent and 2 percent, respectively, of their total earnings to the U.S. federal government."

http://www.bizjournals.com/houston/news/2012/08/06/conocophillips-exxon-chevron-paid.html?page=all [bizjournals.com]

Doesn't look like they were exempted from much.

Re:Thin margins (1, Informative)

the eric conspiracy (20178) | about a year and a half ago | (#42578423)

1. Taxpayers are not funding this.

2. The reason for the pipeline is to reduce costs. It's much cheaper than rail or trucking. That will translate to a mix of several positive effects.

a. lower prices
b. less oil imports
c. better profits
d. more exports of finished products

Re:Thin margins (2)

peragrin (659227) | about a year and a half ago | (#42578611)

ah no
only C and D. Not one part of it would stay in the USA. As it sits now the oil companies are exporting refined gasoline as they get better prices for it over seas instead of using it to lower prices in the states.

Incase you weren't aware but CANADA is a foreign country. you have to IMPORT oil FROM Canada.

Of course you realized that right?

Re:Thin margins (5, Interesting)

Klaxton (609696) | about a year and a half ago | (#42578655)

Sorry but the proposed pipeline would not reduce gasoline prices in any way, it would carry tar sand sludge to Texas refineries on the Gulf coast which will then produce fuels that go on the open international market. Yes I said sludge, it isn't even oil, it is a bitumen hydrocarbon 'product' called dilbit. A bizarre highly corrosive and sticky pipeline fluid that sinks in water. Want that pipeline pumping the stuff through your state at 1400 PSI?

You mean reduced supply increases the price? (1)

Anonymous Coward | about a year and a half ago | (#42578179)

Let's summarize:

Lack of diversity increases the risk of supply disruption.
Decreased supply increases the price.

In other words, more refineries would increase the supply and reduce the disruption risk.

Capacity (0)

JWW (79176) | about a year and a half ago | (#42578183)

The problem is that refinery capacity is constrained and every time someone tries to build a new refinery they are nimbyed to death.

Re:Capacity (5, Informative)

the eric conspiracy (20178) | about a year and a half ago | (#42578409)

Wrong. There is excess capacity.

What really happens is that excess refinery capacity is either mothballed or used to manufacture products for export.

http://www.reuters.com/article/2011/03/21/valero-klesse-idUSWEN981620110321 [reuters.com]

With the crappy worldwide economy and high prices of crude demand for gasoline is decreasing.

alkyation (0)

Anonymous Coward | about a year and a half ago | (#42578821)

how significant has the alkyation process become? as the highest grades of oil would most likely have been extracted first, there may be a strong trend towards grades that require increasing extent of separation, alkylation and blending.

balancing this with the transportation and caching of both oil and petrol makes it one of the more economically important optimization problems.

then there is the trade off for pollution. more alkylation requires more polluting industrial processes which our society is still not ready to face honestly. if the increasingly harmful emissions result in a unreasonable health cost this issue may eventually become undeniable. lets hope the transition to electrical vehicles is progressing well, well before this occurs.

Re:Capacity (0)

Anonymous Coward | about a year and a half ago | (#42578875)

The Problem is the product, and your capacity to tolerate the BS that comes right along with it.

Re:Capacity (1)

brador4 (647343) | about a year and a half ago | (#42578935)

No, a refinery disruption at one west coast refinery ONLY caused west coast gas prices to rise. Refinery capacity in other areas of the US couldn't help gas prices on the west coast. If the US had more refineries, a disruption to one refinery wouldn't have such an impact. The US has half the refineries it had 30 years ago due to NIMBY. If there's a shortage on the west coast, excess capacity in other areas of the US don't help much.

Re:Capacity (0)

pepty (1976012) | about a year and a half ago | (#42579149)

No, a refinery disruption at one west coast refinery ONLY caused west coast gas prices to rise. Refinery capacity in other areas of the US couldn't help gas prices on the west coast. If the US had more refineries, a disruption to one refinery wouldn't have such an impact. The US has half the refineries it had 30 years ago due to NIMBY. If there's a shortage on the west coast, excess capacity in other areas of the US don't help much.

If by "disruption" you mean the refinery kept making and stockpiling gasoline while reporting being shut down, and by NIMBY you mean oil companies lobbying against their competitors opening new refineries in order to keep the price up, then OK, you're right. In California oil companies buy up refineries not to increase capacity but to shut them down and raise margins.

Too Much Regulation (5, Informative)

Anonymous Coward | about a year and a half ago | (#42578191)

I spend 10 years working in the oil and gas refining industry, and I can say first hand that most of these problems and prolonged reductions in output are tied directly and wholly to excessive, brutal, inflexible, and sluggish government red tape.

At one refinery we were doing a new control system for, the refiner discovered a bad gas overpressure valve that was leaking slightly. The process for handling such an event is to immediately scram the refinery, and file 12 different applications with EPA, OSHA, and other government agencies to beg for permission to fix it. In that particular case that whole section of the refinery was down for 9 weeks.

Most people have no idea just how difficult it is to deal with the administration, and this one especially, when it comes to oil and gas production. This administration is not at all interested in a steady and cheap supply of oil and gas products - and I say that with firsthand experience.

Re:Too Much Regulation (0)

Endovior (2450520) | about a year and a half ago | (#42578323)

Mod parent up, please. Most people commenting here are simply reciting the dogma of their favourite brand of politics, without any real understanding of the facts. All too rare to hear from someone who actually does this for a living.

Re:Too Much Regulation (1)

Anonymous Coward | about a year and a half ago | (#42578793)

LOL. Condemning one dogma while lamenting another.

Here's what really happens with the valve leaks slightly.

Somebody says to ignore the problem as long as they can. Then they band-aid it.

Re:Too Much Regulation (-1)

Anonymous Coward | about a year and a half ago | (#42578375)

Blow it out your ass, wingnut.

Re:Too Much Regulation (0)

Anonymous Coward | about a year and a half ago | (#42578905)

Oil is the most profitable and most polluting industry in the history of history. It's not a problem if it gets taxed to death. Ultimately, it would be in the world's best interest to make it pay the R&D for its replacement as well as subsidize the cost of developing it's replacement industries.

It's time for big oil to go back to where it came from, deep underground, sequestered in its festering blackness of bygone dinosaurs & death.

And They STILL Have "Record Profits"! (0)

Anonymous Coward | about a year and a half ago | (#42578223)

Constantly, the oil company profits do nothing but rise. God forbid they should be regulated - or taxed! HORRORS!!!

$3.63/gallon?!? (5, Informative)

DarwinSurvivor (1752106) | about a year and a half ago | (#42578225)

$3.63/gallon? $3.63/GALLON?!? If your northern neighbours saw those prices there would be a line up 3 blocks down the fucking road!!! We haven't seen prices that low since at least 2002. Americans need to stop bitching about having some of the lowest gas prices in the world.

Re:$3.63/gallon?!? (0)

Anonymous Coward | about a year and a half ago | (#42578283)

$3.63/gallon? $3.63/GALLON?!? If your northern neighbours saw those prices there would be a line up 3 blocks down the fucking road!!! We haven't seen prices that low since at least 2002. Americans need to stop bitching about having some of the lowest gas prices in the world.

Or maybe our northern neighbors need to start bitching about the high price they pay for gasoline.

Re:$3.63/gallon?!? (0)

Anonymous Coward | about a year and a half ago | (#42578317)

The real question is WHY they pay so much. It almost certainly has to do with taxes. They get free health care up north and other things we don't. A good portion of our population doesn't even have health insurance.

If the cost of gas doubled in exchange for health care coverage I'd jump at it. It would reduce what I pay from $1,000 USD a month (single male 30 here) to $80 USD a month!

Re:$3.63/gallon?!? (4, Funny)

Mashiki (184564) | about a year and a half ago | (#42578347)

They get free health care up north and other things we don't.

No, we don't. We pay for it in taxes, and the next imbecile that says we get "free health care" will get smacked with Lake Erie....before it was cleaned up.

Re:$3.63/gallon?!? (1)

Anonymous Coward | about a year and a half ago | (#42578381)

That is exactly my point. Thnak you!

Re:$3.63/gallon?!? (2)

ThatsMyNick (2004126) | about a year and a half ago | (#42578421)

The difference is most of what you pay is tax, that gives you a lot of benefits in return. In the US, it goes into the pockets of Big Oil, never be seen again.

Re:$3.63/gallon?!? (2)

the eric conspiracy (20178) | about a year and a half ago | (#42578475)

That's why I own oil company stocks. The dividends are nice.

Re:$3.63/gallon?!? (0)

Anonymous Coward | about a year and a half ago | (#42578731)

MSFT has a bigger dividend yield than CVX or XOM. So I guess you must have low standards or own pipeline MLPs.

Current Price here is $5.11/gallon (0)

Anonymous Coward | about a year and a half ago | (#42578439)

$1.35 / L ~ $5.11/gallon

and that would be considered an average price for fuel.

At $1.25 / L ~ $4.73/gallon, that would be the lowest price we paid in 2013.

At $1.45 / L ~ $5.49/gallon, that would be the highest price yet.

Stop complaining and get a more decent car instead that cost less in fuel.

Re:$3.63/gallon?!? (1)

mug funky (910186) | about a year and a half ago | (#42578453)

yes!! in australia, the other day i filled up at AUD$1.63/L

the above "highest ever OMG" equates to AUD$0.91/L

fuck you, americans. you'll start wars to keep the price so low that even the poorest of you can drive F-350s? running a car is a privilege, not a right!

Re:$3.63/gallon?!? (-1)

Anonymous Coward | about a year and a half ago | (#42578497)

genius....tell your gov't to quit gouging you so much in fuel taxes and it won't cost as much. We are paying $3.63 a gallon with a 50% tax rate (oil leases, corporate taxes, state/federal fuel taxes, etc) imagine how much you are paying in taxes.

Re:$3.63/gallon?!? (1)

nuonguy (264254) | about a year and a half ago | (#42578787)

I don't think you understand how it works down here. Down here people live their lives knowing that corporations have more rights than everyone else the same way that the aristocracy had rights that commoners and peasants did not have in olden times. Your Canadian values are not welcome down here. :-)

Re:$3.63/gallon?!? (1)

Swampash (1131503) | about a year and a half ago | (#42579161)

Sweet jesus, that's less than a dollar per litre. I haven't seen prices like that since the twentieth century.

Seriously America, you're a guy complaining that his imported Perrier is less fizzy than it used to be to an audience of people who are getting used to drinking rainwater. STFU.

People don't care enough therefore... (0)

Anonymous Coward | about a year and a half ago | (#42578263)

The government of the people doesn't care enough. As long as we aren't too immediately inconvenienced by the production of fossil fuels, we're willing to put up with all sorts of pollution, corruption, and other difficulty.

Major spill? (2)

MavenW (839198) | about a year and a half ago | (#42578271)

7,700 gallons is a MAJOR spill? Isn't that about what one semi hauls?

Re:Major spill? (0)

Anonymous Coward | about a year and a half ago | (#42578515)

It is for the environment. It really does take only that much oil to do damage to nature, at least on the local scale. What worse, it got mixed with water spreading the danger even further along with making cleanup difficult. From the article, they recovered 780,000 gallons of an oil-water for cleanup.

Re:Major spill? (1)

PPH (736903) | about a year and a half ago | (#42578753)

OK. We'll cry for the little fishies. But in the grand scheme of supply and demand, its nothing.

Gov't should allow redundency.. (0)

Anonymous Coward | about a year and a half ago | (#42578289)

If the government would get the hell out of the way and allow more drilling and more refineries, we would be isolated from price spikes if a single one was out of commission...

California refineries operated during shutdown (0)

Anonymous Coward | about a year and a half ago | (#42578325)

Check out this Nov 14, 2012 article "Study: California refineries operated during periods blamed for gas price spikes
  http://www.mcclatchydc.com/2012/11/14/174662/california-refineries-operated.html#storylink=misearch#storylink=cpy

"West Coast gasoline price spikes in May and October were widely blamed on refinery outages, but new research to be released at a California hearing Thursday shows that refiners continued to produce gasoline in periods when the public was told the contrary."

Did we nationalize the oil companies overnight? (0, Troll)

xxxJonBoyxxx (565205) | about a year and a half ago | (#42578355)

>> Or does our government and the electorate who put them there have a right to know what's really going on?

Did I miss something? Did we nationalize the oil companies last night? Are we Venezuela or Russia?

Re:Did we nationalize the oil companies overnight? (0, Troll)

EmagGeek (574360) | about a year and a half ago | (#42578457)

The oil industry was effectively nationalized decades ago. The industry operates under absolutely strangling regulation and government essentially dictates everything that happens at a refinery right down to when the workers take a leak.

Re:Did we nationalize the oil companies overnight? (2)

c0lo (1497653) | about a year and a half ago | (#42578885)

The oil industry was effectively nationalized decades ago. The industry operates under absolutely strangling regulation and government essentially dictates everything that happens at a refinery right down to when the workers take a leak.

I agree oil industry and govt seem one and the same, but it doesn't quite look like the govt taking over the oil industry. On the contrary, it looks it is the oil industry privatized the government... the result is quite the same for consumers, though.

stop complaining untill you see Australian Prices (0)

Anonymous Coward | about a year and a half ago | (#42578365)

we have had 1.499 AUD/L for weeks here on standard 91 octane
convert to gallons and to USD and thats 5.97274 USD/Gal

stop complaining

Re:stop complaining untill you see Australian Pric (0)

Anonymous Coward | about a year and a half ago | (#42578427)

we have had 1.499 AUD/L for weeks here on standard 91 octane
convert to gallons and to USD and thats 5.97274 USD/Gal

stop complaining

Or the folks down under should START complaining
The price breakdown in Australia, according to: http://www.raa.com.au/page.aspx?TerID=1139

Crude Oil Price $0.70
Refinery Gross Margin $0.02 (includes production costs and profit)
Wholesale Gross Margin $0.09 (includes transport, insurance costs and profit)
Retail Gross Margin $0.06 (includes transport, insurance costs and profit)
Fuel Excise Taxes $0.38 (this figure is capped at 38.143 cpl)
GST $0.12 (10% of pump price)
Retail Pump Price $1.37

So the refiner makes $0.02/l, and the government gets $0.50/l

Re:stop complaining untill you see Australian Pric (0)

Anonymous Coward | about a year and a half ago | (#42578585)

What's the median income in Austrialia? $67K

What's the median income in the US? $44K

Stop complaining about paying 50% more for gas in a country where the average person makes 50% more money.

How would it help? (3, Interesting)

fermion (181285) | about a year and a half ago | (#42578417)

What you are talking about is fluctuation in supply caused by reasonable issue with capacity. If a freeze cause produce prices to skyrocket, there is a national day of mourning that produce costs more. No. We complain but we either choose to pay the price, perhaps buy canned or frozen, or do without. As participants in the free market, the choice is ours.

The problem is that for the most part people did not respond appropriately to those price signals. Rather they went to the government to complain, went to their churches to hear conspiracy theories about how the liberals wanted to destroy the christian way of life, blaming regulation, speculators, evil oil people gouging the common people. All these are partly true, and gouging people who are too stupid to make adjustments so they don't get gouged is fun and profitable, but it does come down to choices.

If a single shut down can raise prices, then we are at capacity and there are only two choices. The first is to raise the price of the commodity, i.e. refined petroleum, so the refiners will have an incentive to build more capacity. Regulation will raise this costs, but so will the need of refiners to pay the expected huge salaries(sometimes well over 100K to a college grad).

The other is to use less so that current capacity is sufficient, reserves can be built, or older plants can be shut down and maybe updated.

The problem is that neither of these are acceptable to the whiners who expect the government to give them everything for nothing. Who expect to live in suburbs and have the city people subsidies their lifestyle. For those that will not drive their cars so they can approach 30 mph instead os 20 mph

Bad dog, sit! (1)

gmuslera (3436) | about a year and a half ago | (#42578505)

Employees should not audit their bosses

It's Crime (1)

Anonymous Coward | about a year and a half ago | (#42578785)

Failure to quickly report any insult to the environment by corporations is a conspiracy and should carry severe penalties. Both the oil and coal industries have horrid safety records and are essentially a form of organized crime.
                      And yes, our government is slow to respond and may seem excessive. I believe that it was Ben Franklin that remarked that a good population requires little government. The size and intrusion of government is directly related to the honesty and decency of the people and the businesses in the nation. Every time industry values profit above right then they in effect beg for more intrusion, more laws, and stiffer penalties. Also the more we support oil and coal the slower alternate sources can make their way in the market.
                      For example the BP spill in the Gulf of Mexico was criminal enough that not only should BP be bankrupted but many executives should be in prison. Adequate punishments are not applied. The phrase safety first is more than a slogan. It means safety before even economic survival for a company. When safety really comes first accidents simply would not be so common. Yet this is the same industry that wants to pipe shale oil across America.

Gas prices not fault of refinerys. (0)

Anonymous Coward | about a year and a half ago | (#42578981)

It hides the fact that the government is largely to blame for gas prices. Stuff like this happens, but government still prevents any new refinery's to be built. Government (namely the Democrats) prevent all drilling they can, they can't stop drilling on private land. You can blame speculators, but they can be easily stopped from bring up prices simply by allowing more refineries to be built and allowing more drilling. How do people not know this?

its like C(A + B) = $. People blindly blame C and ignore A and B which causes C to become the problem. Government is always the problem, never the solution.

We go to war to keep the price of oil down (1)

Beeftopia (1846720) | about a year and a half ago | (#42579177)

We executed Gulf War I to prevent Saddam from controlling Kuwait's oil fields and stop threatening the Saudi fields. [wikipedia.org]

Greenspan said that we were in Iraq for oil. [washingtonpost.com] Controlling global energy sources was likely a significant sweetener for going into Iraq.

It's directly linked to our quality of life. So you better believe the society, via the government, should be getting a clear picture of WHAT EXACTLY is going on with the oil supply chain.

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