Greenspan on Iraq: It Really Is About The Oil

September 24, 2007 at 3:01 pm | Posted in Iraq, oil | 1 Comment

Alan Greenspan writes in his book that oil had much to do with the war in Iraq. Then he hedged those words later, but now he comes back and restates that indeed it was about oil:

ALAN GREENSPAN: People do not realize in this country, for example, how tenuous our ties to international energy are. That is, we on a daily basis require continuous flow. If that flow is shut off, it causes catastrophic effects in the industrial world. And it’s that which made him far more important to get out than bin Laden.

There you go. But, Mr. Greenspan, why didn’t you open your mouth when it actually mattered?

With Fixed Refineries, Gas Prices Drop

July 30, 2007 at 5:54 am | Posted in American politics, oil | Leave a comment

See, gas prices drop when refineries work. So one really does have to wonder why oil companies have not built any new refinery in over 30 years…

Perhaps they are far too comfortable with their record profits.

The REAL Reason Gas Prices Are So High

July 22, 2007 at 5:26 am | Posted in America, American politics, corruption, oil | 20 Comments

It is because oil companies control oil refineries and they have had no incentive to do anything about their crappy refineries over the past thirty years. What incentive do they have to make better refineries? Certainly no competition forcing them. Certainly no governmental pressure to force them. So we get a corrupt and degrading market that forces Americans to pay higher prices, not because the free market wills it, but because oil companies have no market pressure to improve their product.

Compare the oil industry, specifically the refinery section, to the computing industry, specifically the highly advanced software/internet section. Note the vast difference in competition levels. Really anyone in the world can create software. What does this do for the industry? Why there is no better competition, and no stronger, more advanced and expansive industry that I can think of.

You want lower prices, America? Perhaps it is time to talk about breaking up these massive oil companies, particularly break them from the oil refinery business. They obviously suck at it, to put it mildly.

“There is a lack of investments in modern equipment,” Ms. Merritt said. “The overwhelming preponderance is that if you have inadequate engineering and equipment, poor process safety management, and poor staffing, you’re set up for a catastrophe.”

Ms. Merritt, who was appointed by President Bush and will retire after her five-year term ends in August, also said the Occupational Safety and Health Administration does not conduct enough inspections. “There is no enforcement,” she said.

OSHA defended its record and said it had inspected almost 500 refineries from 1994 to 2004. The agency also said it would inspect all refineries under its jurisdiction within the next two years. “OSHA inspections of refineries have proven to be effective,” the agency said.

Meanwhile, demand has been rising relentlessly, providing little respite to the nation’s aging energy infrastructure. Even as consumers complain loudly about high prices, they show no signs of scaling back. Gasoline consumption reached 9.66 million barrels a day in the first week of July, the second-highest level on record.

“The cushion that used to be available five to seven years ago for these unplanned perturbations is no longer there,” said Jeet Bindra, Chevron’s president of global refining. “When a refinery has a hiccup, there are consequences on supplies.”

Part of the problem, analysts and refiners said, stems from the hurricanes two years ago. In Louisiana and Mississippi, many refineries were flooded, and about a quarter of the nation’s refining capacity was shut for weeks.

“Since refining has become such a wonderful business, refiners have delayed maintenance,” Mr. Robinson said. “But when they do go down, they stay down for longer and they discover all sorts of problems.”

In late March, for example, a fire at a large compressor at a BP refinery in Whiting, Ind., caused a hydrogen-treating unit that removes sulfur from some oil products to shut. That meant BP had to turn off a crude oil unit for early maintenance. Two weeks later, a brief power disruption damaged another distillation tower. And in July, a third crude oil tower was shut briefly so operators could fix a small leak. Since the first incident, the 405,000 barrels-a-day refinery has been running at about half its capacity.

Not all refining disruptions are the result of similar incidents. Refineries typically schedule yearly maintenance that sometimes requires them to halt production entirely. But even these long-scheduled shutdowns can now take longer to complete.

No refineries have been built in the United States in over three decades, because refiners say they are too costly. Instead, they have been expanding their existing refineries.

All this is happening as the industry goes through another golden age. After 20 years in the doldrums, the refining business has never been so good for oil companies. Refining margins — the difference between the price of crude oil and the value of refined gasoline made from it — have shot up as much as $25 a barrel for some types of crude oil, compared with about $5 a barrel just a few years ago.

So let us review:

1. Lack of investment in modern equipment
2. No enforcement
3. Relentlessly driving demand
4. Refiners delay maintenance, stay down longer
5. Long maintenances take even longer to complete
6. No new refinery in THREE DECADES! Reason: Too costly…but
7. Refining business has never been so good to oil companies.

Is this right?

The War in Iraq Was Always About Oil

July 19, 2007 at 12:52 pm | Posted in American politics, Iraq, Middle East, oil, Paul Wolfowitz | 4 Comments

Paul Wolfowitz, the architect of the war in Iraq said so himself back in 1992.

While the U.S. cannot become the world’s “policeman,” by assuming responsibility for righting every wrong, we will retain the pre-eminent responsibility for addressing selectively those wrongs which threaten not only our interests, but those of our allies or friends, or which could seriously unsettle international relations. Various types of U.S. interests may be involved in such instances: access to vital raw materials, primarily Persian Gulf oil; proliferation of weapons of mass destruction and ballistic missiles, threats to U.S. citizens from terrorism or regional or local conflict, and threats to U.S. society from narcotics trafficking.

In the Middle East and Southwest Asia, our overall objective is to remain the predominant outside power in the region and preserve U.S. and Western access to the region’s oil. We also seek to deter further aggression in the region, foster regional stability, protect U.S. nationals and property, and safeguard our access to international air and seaways. As demonstrated by Iraq’s invasion of Kuwait, it remains fundamentally important to prevent a hegemon or alignment of powers from dominating the region. This pertains especially to the Arabian peninsula. Therefore, we must continue to play a role through enhanced deterrence and improved cooperative security.

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