[IP] more on fuel-price rip-offs just re-enacting Enron power-price ripoffs?
Begin forwarded message:
From: Shannon McElyea <shannonm@xxxxxxxxx>
Date: May 9, 2006 5:04:03 PM EDT
To: dave@xxxxxxxxxx
Cc: ip@xxxxxxxxxxxxxx
Subject: Re: [IP] fuel-price rip-offs just re-enacting Enron power-
price ripoffs?
Actually, just like Enron did to California:
Leaked Oil Industry Memo Suggests Bid to Curb Refinery Outpu t
Published on Friday, June 15, 2001 by the Associated Press by H.
Josef Heber t
Even as the Bush administration cites a lack of refineries as a
cause of energy shortages, oil industry documents show that five
years ago companies were looking for ways to cut refinery output to
raise profits.
The internal memos involving several major oil companies were
released Thursday by Sen. Ron Wyden, D-Ore., whose office obtained
them from a whistleblower. He said the materials did not necessarily
reflect any illegal activities but said some of them "sure look very
anticompetitive." In response, Red Cavaney, the president of an
industry trade group, said: "This finger pointing six years into the
past serves no useful purpose."
Wyden was turning the material over to the Governmental Affairs
Committee, which plans hearings on oil industry practices and energy
prices. Tight gasoline supplies have been cited repeatedly by the
industry and the White House as a primary reason for soaring gasoline
prices this year. While pump prices have eased recently, the cost of
gasoline jumped an average of 31 cents a gallon nationwide during the
seven weeks ending in mid-May, according to government figures
presented at a House hearing Thursday.
Because it takes about four years to build a large refinery, planning
for a new plant would have had to begin by the mid-1990s, energy
experts say. There has not been a new refinery build in the United
States in 25 years; in the meantime, dozens of small ones have
closed. The documents obtained by Wyden's office suggest that in the
mid-1990s oil companies had no interest in building refineries
because of low profit margins. In fact, companies were discussing the
need to curtail refinery output in order to make more money, the
documents suggest.
"If the U.S. petroleum industry doesn't reduce its refining capacity,
it will never see any substantial increase in refinery margins
(profits)," said an internal Chevron document in November 1995,
citing views presented by participants at an American Petroleum
Institute conference. A year later, an official at Texaco, in a memo
marked "highly confidential," called concerns about too much refinery
capacity "the most critical factor" facing the refinery industry.
Excess capacity is producing "very poor refining financial results,"
the memo said.
Wyden said the documents "raise significant questions about whether
America's oil companies tried to pull off a financial triple play –
boosting profits by reducing refinery capacity, tagging consumers
with higher pump prices and then arguing for environmental
rollbacks." The institute produced statistics showing refinery
capacity has increased since 1996 as refineries became more efficient
and some expanded. The figures also showed capacity increasing slower
than demand. Cavaney, the institute's president, said the industry's
reluctance to invest in new refinery capacity when profit margins are
low and supplies are adequate – as was the case in the mid-1990s –
was "a normal response in a commodity market."
Wyden singled out a 1996 memo from Mobil Corp., which has since
merged with Exxon, that suggests that Mobil was ready for a "full
court press" to make sure an independent California refinery, which
had closed in 1995, would not reopen. At the time Mobil was concerned
that if the refinery, owned by the Powerine Oil Co., resumed
production it might force down the price of a special, cleaner
burning gasoline by as much as 3 cents. "Needless to say, we would
all like to see Powerine stay down," the memo said. "Full court press
is warranted in this case." The refinery remained closed.
Texaco spokeswoman Keelin Molloi said Wyden's allegations "divert
attention away from legitimate policy questions" about energy needs.
As for the 1995 Texaco memo, she said: "Within any company,
discussions about the margins and capacity are conducted in a normal
course of business and in no way constitutes inappropriate or illegal
behavior." Chevron spokesman Fred Gorell said the company "flatly
denies any improper conduct involving refinery production levels or
gasoline pricing."
Attempts to reach ExxonMobil were unsuccessful.
The need for more refinery capacity has been the focus of President
Bush's energy plan. Vice President Dick Cheney has blamed gasoline
prices increases on tight supplies caused to a large part, he
contends, by the fact that the last new U.S. refinery was built in
1976. In fact, 24 refineries – many of them small independents – have
shut down since 1995, according to the Energy Department. That has
accounted for the loss of 831,000 barrels a day of refining capacity.
Individual refinery expansions at the same time have added 1 to 2
percent of capacity annually.
On 5/9/06, David Farber <dave@xxxxxxxxxx> wrote:
Begin forwarded message:
From: Jim Warren <jwarren@xxxxxxxx >
Date: May 9, 2006 4:46:57 PM EDT
To: Dave Farber <dave@xxxxxxxxxx>, Declan McCullagh <declan@xxxxxxxx>
Subject: fuel-price rip-offs just re-enacting Exxon power-price ripoffs?
With all the media coverage of gas prices, why hasn't there been
hardly ANY of the media, of ANYthing about:
[1] the still-secret meeting between Cheney and his Big Oil
supporters, shortly after the Supreme Court elected him, and
[2] the seemingly near-perfect comparison of manipulation of
electrical-power prices, shortly after Bush-Cheney were elected, by
Bush's long-time friends and supporters at Enron ... and the current
"uncontrollable" manipulation of oil and fuel prices now ... in
commodities trading systems where 80%-90% or it is completely secret
and unregulated?
--jim
(Could this total lack of mention be another one of those vile "media
conspiracies" which Republicans and their pundits are so fond of
mentioning?)
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