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Banned
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Originally Posted by loquitur
yeah, it's calculable. in principle it's basically the cost of extraction, transportation and refinement plus the cost of capital plus the cost of negative externalities.
I don't have that number. But you insist on leaving out the last piece. Ronald Coase would be displeased.
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loquitur, the following was intended to be "Part II" of the OP of the thread I put up last night, asking if nationalizing the assets of major oil corps. operating in the US should be considered now. I might as well post it here. I don't think your posts here indicate that you recognize anything but faith in the propriety and ethics of oil company executives. They don't simply have no recourse but to "pass along" costs of doing business....like tax increases, to their customers.
They have created excess profits, by successfully attempting to control supply of both domestically available crude oil to refine, and of refining capacity itself, choking it off.
If these parasites controlled and distributed the supply of medicinal blood or blood products in the US, and these were the reports about them....Shell lying about every facet of it's decision to close it's Bakersfield refinery in 2004, and dismantle it instead of selling it, there would probably be no question of siezing their BLOOD producing and distribution assets. Petroleum based fuels are the blood of the US economy. The major oil companies have no incentive to increase supply, even as land owners with proven petroleum deposits under the soil wait for the availability of infrastructure to drill for and extract that petroleum, due to a shortage, by design....see Chevron's stock buyback program....of experienced personnel and equipment to extract oil literally sitting next to refineries, robust transportation and storage, and end users of refined products:
Quote:
http://www.turnto23.com/news/3294287/detail.html
The Bakersfield Channel - KERO TV (California)
May 12, 2004
by Reporter: Heidi Carter
Shell Has No Plans To Cover Refinery's Loss
KERO Interviews Refinery Manager
BAKERSFIELD, Calif. -- As the closing date approaches, the controversy surrounding the closure of the Shell Refinery on Rosedale Highway continues to heat up, KERO reported.
Consumer Reporter Heidi Carter sat down with the refinery manager, who said the Bakersfield refinery isn't efficient enough to keep open, even though it's making a profit.
Amir Farid said the Rosedale refinery isn't as efficient as Shell's two other California refineries, which is why Shell will close it down at the end of September.
"This refinery is two separate refineries that have been stitched together over time," Farid said. "You also have simply the economy of scale. This is a 70,000-barrel-a-day refinery. Martinez is currently 145,000 and can produce up to 160,000 (barrels a day.)"
Farid said the refinery closing has nothing to do with the current price spikes for gasoline. But the current market is making the refinery profitable.
"Clearly, in the environment today, we are profitable at the moment, but this is a cyclical business," Farid told KERO.
Farid admitted Shell has no current plans to make up for the total loss of supply that will occur when the plant closes.
"There is going to be a gasoline shortfall that we are still working on and potentially can offset some of that from our refinery up in the northwest," Farid said.
Shell only has the capacity to make up about half of the diesel production that will be lost.
Jamie Court, the president of the Foundation for Taxpayer and Consumer Rights, said that closing the refinery is about shorting the market and ultimately keeping gas prices above $2.
Farid said in spite of the current profits, the refinery has a history of losing money.
Court said Shell should put the refinery up for sale, rather than short California consumers by closing it down.
While Shell has not put the refinery up for sale, they have received 14 inquires from companies interested in buying it, but so far no offers have been made.
http://www.energybulletin.net/717.html
Published on 20 Jun 2004 by The LA Times.
California: Shell to Reduce Summer Fuel Output at Bakersfield Refinery
by Elizabeth Douglass
....The Bakersfield refinery is surrounded by prolific oil fields that produce San Joaquin Valley heavy crude. The company, a part owner of several of those fields, has said it wants to close the facility so it can divert more of the heavy crude to its refinery in Martinez, which Shell has said is more efficient than Bakersfield <h3>and is suffering from "underutilization" because of dwindling supplies of the San Joaquin crude it is set up to process.......</h3>
The Bakersfield Californian
January 11, 2005
by Erin Waldner
<h3>Utah-based firm to buy Bakersfield, Calif., refinery for $130 million</h3>
Flying J Inc. has big plans for the Shell Bakersfield Refinery.
The Ogden, Utah-based company has signed an agreement with Shell Oil to purchase the refinery, reportedly for $ 130 million.
Flying J plans to "modernize" the circa-1932 plant so it can produce twice as much gasoline and slightly more diesel fuel,
according to Flying J spokeswoman Virginia Parker.
The refinery, on both sides of Rosedale Highway, makes 2 percent of the state's gasoline supply and 6 percent of the diesel. Oil
experts have warned that shuttering the refinery would lead to even higher fuel prices.
William Keese, chairman of the California Energy Commission, said Monday that any additional fuel supply is a good thing,
particularly for the valley.
"Clearly, when you have a shortage of supply, prices go up," Keese said.
Any upgrades will need regulatory approval and according to Jeff Utley, senior vice president of refinery operations at Flying J,
will take two years to complete. In the meantime, he said, refinery operations should continue as normal.
Just two months shy of the deadline Shell gave for closing the refinery, Shell announced Monday it had signed an agreement with
Big West Oil LLC, a subsidiary of Flying J, to sell the Bakersfield refinery. Neither company would disclose terms of the deal,
but according to Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, which has criticized Shell's handling
of the refinery, Travel J is paying $130 million.
Shell expects to close the deal by the end of the quarter. The sale requires the approval of the U.S. Environmental Protection
Agency and Justice Department, both of which are expected to sign off on the deal.
Aamir Farid, general manager of the Shell Bakersfield Refinery, said Shell could exit day-to-day operations at the plant by the
end of March.
He said Shell will continue to supply gasoline and diesel to its branded customers in the area. He said the fuel will come from
the Bakersfield refinery, as well as other sources.
This will be Flying J's first foray into the California oil refining business. The company is best known here for its diesel fuel
stations, which it calls travel plazas.
Big West Oil operates a small refinery in North Salt Lake, Utah.
"This increases our refining capacity," Utley said.
The Bakersfield refinery can currently produce up to 70,000 barrels of oil per day.
Under the terms of the sale agreement, Shell will lease Flying J an adjacent terminal that's a pick-up point for tanker trucks.
Shell has been criticized for excluding the terminal from the sales process.
Shell said it will continue to own and operate pipelines that feed the refinery.
Utley said the oil the refinery will process will come from the local Kern River field, as well as Midway-Sunset and Elk Hills
near Taft.
When Shell announced in November 2003 that it was shuttering the refinery in 11 months, the company cited dwindling supplies of
San Joaquin Valley heavy crude oil, which the refinery processes.
Utley said Flying J believes there's enough oil in the area to keep the refinery running for the long-term.....
http://findarticles.com/p/articles/m...4?tag=rel.res1
Flying J plans to double gas output
Deseret News (Salt Lake City), May 9, 2006 by Robert Tuttle Bloomberg News
Flying J Inc., a refinery operator and fuel distributor, said it plans to double gasoline production at the Bakersfield, Calif.,
plant it bought from Royal Dutch Shell Plc last year.
Ogden-based Flying J has been obtaining permits to expand the refinery's gasoline and diesel output, the company said Friday in an
e-mailed statement. The upgrades are scheduled to be completed by the middle of 2008, the statement said.
Shell originally planned to close the refinery, saying the plant was losing money. It sold the facility to Flying J in March 2005.
Flying J will spend $500 million to upgrade its refinery, the Los Angeles Times reported last week...
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Shell OIl had to be dragged, as it kicked and screamed that it was closing amd dismantling it's Bakersfield, CA refinery because it was "obsolete" and because there was a dwindling crude oil supply soon to be insufficient to supply it with raw material...<h3>into selling this refinery, for $130 million....instead of holding it off the market and dismantling it !!!!!!</h3>
Quote:
http://www.latimes.com/business/la-f...,4229890.story
Chevron posts profit of $5.2 billion
The oil company beats analysts' forecasts despite an 84% drop in earnings from refining and gasoline retailing.
By Ronald D. White, Los Angeles Times Staff Writer
May 3, 2008
....During the quarter, Chevron boosted its cash to $8.2 billion, up from $7.4 billion in the year-earlier period; increased capital spending on exploration, production and refinery projects by $1 billion, to $5.1 billion; and still had enough change left over to buy back $2 billion worth of its stock.
The only negative news was an 84% decline in earnings from the division that operates refineries and service stations, falling to $252 million from $1.6 billion in the first quarter of 2007. Like many fuel sellers, Chevron was unable to raise pump prices fast enough to keep up with booming oil prices.
Shares of Chevron rose 38 cents Friday to $95.32.
<h3>The stock buyback earned the ire of consumer groups, which said that the money could have been better spent to help motorists hit by record fuel prices.</h3>
"This is money that could have been invested in alternative energy research or capital expansion. It's wrong to use their excessive profits to buy shares and drive up the stock price," said John Simpson of Consumer Watchdog, formerly known as the Foundation for Taxpayer and Consumer Rights. "That only benefits executives whose excessive bonuses are tied to stock performance."
http://www.chicagotribune.com/news/n...,1761702.story
Million-dollar homes, billion-dollar oil patches make uneasy neighbors
By Michael Martinez | Tribune correspondent
6:47 PM CDT, May 4, 2008
<h3>...Long Beach drilled 70 new wells last year and is planning to drill about 60 more this year where it owns mineral rights. A shortage of engineers, geologists and drilling rigs keeps the city from additional drilling, said Curtis Henderson, manager of the city's oil operations....</h3>
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Last edited by host; 05-09-2008 at 09:36 AM..
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