<I wish I didn't have to be the wet blanket The Oil Drum Taking a turn for the better - or directional drilling again>

8 comments on ExxonMobil: Protecting themselves from the inevitable

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Halfin on September 25, 2005 - 5:46pm Permalink | Subthread | Comments top
Here's an article from Slate on who to blame:
When gasoline prices spike, the public and politicians tend to vent their anger at the two most obvious sources: 1) local gas stations, where people have to pay $60 to fill up their SUVs, and 2) the companies and countries sitting on giant pools of crude oil, like ExxonMobil and Saudi Arabia.

But those who are making the biggest profits in the oil business post-Katrina aren't facing public wrath at all. In fact, they've been receiving sympathy and various forms of government aid, even though they're doing better than anyone. For the refiners, long the overlooked middle child of the oil business, good times just got better.

The article goes on to say that refineries have been making $10/barrel this year (i.e. the price for a barrel of gas minutes the price for a barrel of crude), which is already a historical high; but estimates are that post-Katrina this spread has increased to $40/barrel, leading to unprecedented high profits.

If it's any consolation to our "oil company insider", there are plenty of independent refiners, like Valero, whose stock is up 226 percent in the past year. Maybe we can agree to point fingers at the independent refineries without hurting the feelings of the "insider".

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Yankee on September 25, 2005 - 6:45pm Permalink | Subthread | Parent | Comments top
Thanks for that Slate link. You may not believe this, but I'm really trying to understand this as much as anyone else...
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billyt on September 25, 2005 - 6:52pm Permalink | Subthread | Parent | Comments top
yes if you look at the Crack Spread post Katrina, it has been rising.  Crack Spread = price of Refined products - price of crude oil.

Post Katrina, the release of SPR AND refinery bottlenecks drove the price of crude oil down.  The refinery bottlenecks and high consumer demand for fuel drove the price of gasoline and heating oil up.

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mw on September 25, 2005 - 7:09pm Permalink | Subthread | Parent | Comments top
One party is forgotten in this... the ever-spending, energy guzzling, consumer.

We should also blame government, who are supposed to take a big picture look at the world, and blame them for not being more proactive and also for not educating the public.

Politics, and a generally myopic quarterly focus on results by business, tend to get in the way of doing the right thing on a regular basis. I don't expect Peak Oil to upset what has become standard operating procedure (support the economy at all costs lest the party commit politcal hari kiri).

A possibly too-cynical view: a party in power that realized what was coming would tend to do whatever it took to keep the illusion going, while at the same time shoring up mechanisms (party control, press control, military control - note the talk about changing the role of the military in domestic affairs) that will be needed when the emergency is too obvious to hide any further.

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8 comments on ExxonMobil: Protecting themselves from the inevitable

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