Hosing You Down and Down

big-oilThis morning, over a cup of Columbian Coffee I come on here and read refineries and the EPA are our problem?  Man-Man, I must have it all wrong.  I had it the other way, “restriction of product, scarcity in supply (on purpose) to drive up prices.”

When it comes to understanding the volatile pricing of gasoline and upper distillates  who can we trust?  Some people say the free market.  But then again, look at the past history of oil in this country.  Gas/Diesel prices kept climbing even as oil prices dropped, all the while as supplies increased.

Oil prices are supposed to fall back when U.S. inventories of crude and petroleum products grow.  So why is it when U.S. crude supply exceeds demand, prices still rise? There must be something else that is choking the system.

Surely, we should be able to trust the insight of our elected representatives.

Some are quick to point a finger towards Washington D.C.  Lawmakers claim we need new comprehensive energy legislation that would open more public lands for oil and gas drilling and make it easier for new refineries to be built.  Oil companies while idly sitting on thousands of leases, call for more “tax incentives” to the tune of yearly amounts of billions of dollars to alleviate the problems in our country.

Run that one up the flagpole again, and again, and again.  No one is gonna salute it.  

Ah yes, and don’t forget to include those whacky environmentalists preventing oil companies from building new refineries. I wouldn’t be surprised if the U.S. still has the same number today as we had 25 years ago.  Perhaps the oil companies just neglected to notice that American Drivers (and drivers around the world) increased during this period of time?  

EPA adds to the mix, but that can be solved, get rid of the the EPA.  I personally see them doing nothing but restricting instead of encouraging business in this country.  Pardon my French but it aint all them tree huggers causing the problem, that dawg won’t hunt either.

Over the last quarter-century, the number of refineries in the United States dropped to 149, less than half the number in 1981.  Oh, well all those refinieries closing is probably from pressure by liberal lawmakers.  Uh huh, sure.  We used to have ten of them here in Oklahoma now we are down to two, possibly three.  Why were they shut down, to support artificial price controls would be the first guess.  

Then there are those who would blame it on the EPA.  

 From 1975 to 2000, the U.S. Environmental Protection Agency (EPA) received only one permit request for a new refinery. Those bad guys at EPA approved Arizona Clean Fuels’ application for an air permit for a proposed refinery in Arizona. Arizona in turn “speeded up the permit application process to accomodate the builders and speed up the process.”  In addition, oil companies are regularly applying for – and receiving – permits to modify and expand their existing refineries every week in this country.  I have heard that the Arizona deal fell thru the cracks and was shut down.  So we are back to square one.

Why would oil companies want to close refineries?

  • 1981 – 329 refineries operating at 68.6% capacity
  • 2006 – 149 refineries operating at 89.7%

And those figures are clearly years out of date by now.  Oh well, at least that makes good business sense. A refinery operating at 90% capacity should be much more profitable than running at 70%. So I guess we know where all the profits from high gasoline prices are going; to the stockholders of the nation’s biggest refinery companies.

Over and over, case after case, and no one seems to notice.  Refiners in response to falling gasoline demand and rising costs, have cut their production rates.

Then we come to speculators and the price gougers who walk and live amongst us.  “They are mostly described as sitting in a boardroom and colluding, but they can see easily enough where their benefit lies, and it doesn’t lie in a price war.”  In a truly competitive market, you might see some of these providers try to improve their market share by reducing prices. But this is not happening.

They are all better off by restricting production to keep prices up.  

We let them accumulate market power through the wave of mergers, and we’ve been paying the price in the last five years. Here is the bottom line.  “If there is a small number of players in the market, they learn from each other’s behavior.”

So as you can clearly see, there are no easy answers and simple solutions on the horizon.

We are catering to our nation’s oil cartel by blaming the problem on lack of supply and refining capacity, or our governent clearly knows something everybody else doesn’t and it is just keeping the secret to themselves.

In either case … You lose.  Have a good weekend, might forgo the trip to Grandma’s, that is up around $75 one-way in my case, and it just aint gonna happen.


Cartoon courtesy of American Progress Online

Truck Month – Stumped In Oklahoma

0331 Now I am confused, Toyota has a commercial out that says “this is Toyota Truck Month” which is okay, I suppose.  But just the other day, I see one that explains that “February is Ford Truck Month.”  So we either have two auto manufacturers that are clearly outta whack, or it could be that the Japanese are just copying our products again.

Here is something else to add to the mix.  

Each time that Chevy truck commercial comes on where they hook the truck to a tree stump with this massive chain and rip the stump out of the ground.  Well, I just sort of smile to myself.  This is because I remember Earl and Wally, who in their profound wisdom did the very same thing, with a somewhat different twist.

Earl, in an effort to appease his wife, agreed to pull some shrubs on the front of the house.  He called Wally and he came over.  They positioned their trusty 4-wheel drive pickup on the front lawn and hooked cable around some huge bushes in front of the house.  During this preparatory cabling, they consumed several beers in the process. 

After insuring that the bushes were properly wired up, and being as they were more or less, oiled or gassed up to some extent, they decided that a “whole lot of digging around the root system of the bushes” wasn’t all that critical or necessary. Jumping into their trusty steed idling on the lawn, Earl reached down and deftly put the truck in 4-wheel drive (just like on the commercials by gawd) and engaged the throttle for all it was worth.

Vvvvvvvvvvvvvvvvvvroooooom!  Ka-pow, ka-chink, ka-thunk.

The bushes stood their ground, as if they were completely oblivious of what was going on.  Earl’s truck however did not fare so well, they ripped out the transfer case on the 4-wheel drive to the tune of some $6,500.00 Now as you sit there and digest that, make a mental picture of it all, I will try to illustrate to you in words, the time they were both driving in Wally’s car, just below the dam at Lake Hefner.  Coming home from the Red Dog Saloon in Wally’s Chevy two-door sedan. 

Late at night, when all of a sudden out of nowhere, this big buck ran across the road in front of them, and they hit it. Stumbling around in the dark, they locate the animal, in their somewhat inebriated condition decide that it is dead.  This is when Wally gets the great idea that “we can take it home, hang it up in the garage, butcher it and we will have venison” for everybody.

As they drag the animal back to the car there is a lively discussion that ensues on Barbecue etiquette and who not to invite.  Plans are made, agenda’s set, it is on … This Saturday Night!

They open the door of the car and after a little time, they finally get the animal into the vehicle and into the backseat.  They then get in, and start on down the road to Wally’s house to butcher and field dress the animal.  They open their last beer, and as with all good buddies, they split it and one more dead soldier is laid to rest.  

 This is where the master plan starts to unravel, you see, the buck is not dead.  

It was merely unconscious from the blow it received from the automobile.  It awakens and comes to life, in the backseat of the Chevy 2-door and it is definitely not a happy camper. At this time, Earl and Wally, figuring discretion is the better part of valor, exit the car and for the next ten to fifteen minutes, watch as the deer (and his rack of antlers) manages to destroy the interior of Wally’s car.  It rips up the seats, the headliner, just about anything it comes in contact with, until finally it extracts itself from the automobile.  One trashed car, no barbecue and no deer jerky.

Well, there is the bottom of the page rolling up, I see it is time for me to close.  

Next time I will share with you how this dynamic duo, this terrible two-some, decided to go coyote hunting and sat under a tree with this digital tape of a rabbit in a snare (the bait call).  Both of them sitting there, in the dark, playing this tape over and over, sippin on their brew.  Everything was going just swell … Until this huge owl swooped in to their location out of the dark, homing in on the sound, and put his talons into Wally’s head and they had to take him to the Emergency Room for stitches.

Not really sure if any of this happened during Truck Month, will have to check on that, and get back to you.