Internal Memos Show Oil Companies Intentionally Limited Refining Capacity To Drive Up

[poncho]

Santa Monica, CA -- The Foundation for Taxpayer and Consumer Rights (FTCR) today exposed internal oil company memos that show how the industry intentionally reduced domestic refining capacity to drive up profits. The exposure comes in the wake of Hurricane Katrina as the oil industry blames environmental regulation for limiting number of U.S. refineries.

The three internal memos from Mobil, Chevron, and Texaco (Click here to read the memos.) show different ways the oil giants closed down refining capacity and drove independent refiners out of business. The confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990s in order to raise the price at the pump.

"Large oil companies have for a decade artificially shorted the gasoline market to drive up prices," said FTCR president Jamie Court, who successfully fought" to keep Shell Oil from needlessly closing its Bakersfield, California refinery this year. Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty."

SOURCE

 

[billwald]

I suggest that the SBA organize a "Christian" non profit for the purpose of building a new oil refinery.

 

[Johnv]

The FTCR is yet another watchdog-du-jour. Oil companies have been investigated countless times by the federal government, and claims of price fixing have never been substantiated.

In fact, the laws of supply and demand, when applied to the petrolium industry, suggests that more money is made when supply is plentiful and prices are lower. Though less is made per unit, more units end up being sold, and the overall profit increases.

 

[KenH]

If one looks at the dates of the memos then one will see that they were written in 1995 and 1996. As someone who has watched refining margins for years I can vouch for the fact that ten years ago there was excess refining capacity and it was extremely difficult, and is still extremely difficult due to trying to match up with the cost of oil in ordinary situations when several refineries are not knocked out by hurricanes, to make a consistent profit on the refining end of the oil business.

Demand for refined products has gone up tremendously since the turn of the century in the U.S. and we now no longer have the excess refining capacity that existed ten years ago.

I find it incredible that an organization would use memos related to a situation that existed ten years to try to prove a point about the current situation that has dramatically changed due to the rush by consumers until recently to buy gas guzzling vehicles.

 

[Bro. Curtis]

The people who want to make our president look bad never care about that stuff. They're too busy telling us we're zombies, and sheep, that we can't think for ourselves, and only they know what's really going on.

 

[poncho]

Good point Ken! I guess maybe profit isn't so important to them now as it was in 1995 and 1996 and their itent to defraud us is no longer applicable in this day and age.

 

[KenH]

Profit is always important to a business. You and your link have not shown any fraud at all - as I pointed out.

Just more mindless, senseless oil company bashing.

 

[poncho]

Just more mindless, senseless oil company bashing.