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Getting Better Transparency From Oil Refineries
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?'"
Speculators demand more transparency so they can jack the price of futures every time a breaker trips at a refinery.
April 17, 2012
http://money.cnn.com/2012/04/17/markets/obama-oil-speculators/index.htm
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.
[Fuck Beta]
o0t!
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?
Actually, the best way to demonstrate what happens without any kind of regulation at all, is to look at what is going on in Nigeria:
Almost 1.9 million barrels have have been spilled into the Niger river delta in the 20 years between 1976 and 1996 in close to 4,900 different incidents, and there doesn't seem to be any indication that this is going to reduce in the future.
See, in Nigeria there seems to be absolutely no business consequences to any kind of oil spills or accidents, so when the expenses of fixing a problem is greater than the expenses of the losses of oil, there's no incentive to pay for a fix.
After all, the only ones feeling the consequences is the local population, and they obviously aren't worth much to anyone.