Damage to oil industry minimal

[icarus]

According to industry news The damage to the oil industry has been minimal.

wildernessguru points out that these oil companies maintain fleets of helicopters to check out their oil rigs, and to ship supplies and personnel. Why aren't they over-flying the region to survey the damage? That said, companies like Chevron have donated millions in disaster relief (finally).

Don't buy any argument that gas prices must rise because of the hurricane. The oil companies put the money in to make their cash flow capable of withstanding a hurricane of this magnitude.

Comments

[tigerlilly2063.livejournal.com]

But unfortunately that doesn't bar them from raising the prices nevertheless. Here in Germany they raised them about ten percent in two days.
Which makes me somehow glad that I was sick this week and not had to drive to work.

[icarusancalion.livejournal.com]

The US is an oil-producing nation. There's a political price to stiffing us at the gas-pump.

The pay-back is coming.

Icarus

[tigerlilly2063.livejournal.com]

I really really hope so.

Coincidentally I'm reading an article on National Geographic about oil production and alternative energies.
Don't know how long it'll take them to realise that they can't go on like that forever.

[icarusancalion.livejournal.com]

I have one word to say to that:

ENRON.

Icarus

[wickedelf.livejournal.com]

Don't buy any argument that gas prices must rise because of the hurricane. The oil companies put the money in to make their cash flow capable of withstanding a hurricane of this magnitude.

That's what my father and I kept saying 'oh how handy they can try to blame the hurricane for things and raise prices more'

I'm just hoping it ends up shooting them in the foot. Hopefully this will be the added incentive to make alternative fuel sources a real option and focus.

[icarusancalion.livejournal.com]

Yeah, the excuse sounded an awful lot like "the dog ate my homework." As if the prices haven't been steadily increasing over the last three years.

These oil companies are losing money in Iraq so the president is looking the other way as they stiff us to make up the profits over here.

Icarus

[venivincere]

Why aren't they over-flying the region to survey the damage?

Why aren't they over-flying and dropping emergency supplies?

[icarusancalion.livejournal.com]

Yeah, no shit. They've ad helicopters out their checking the damage to their oil platforms so they could report to their stockholders. They could drop some supplies on the way.

Icarus

[wikdsushi.livejournal.com]

The problem doesn't lie in oil production, though. The area around and just to the east of New Orleans is the largest refining region in the country, and most of the refineries are either damaged or in federal Disaster Areas. My dad knows more about this than I do, and I think he said that something like a third of the refineries in the country are closed down, and the rest are having a hard time getting the oil that's being produced because New Orleans is the primary port for the Gulf of Mexico. There were problems in the refining industry before the hurricane--something like two or three major refineries had caught fire a few months ago--and this was just the critical blow.

I'm not happy about gas prices (and I'm even less happy because a good chunk of my future income is tied up in the oil business, and this is going to impact that--long story), but given the situation with gasoline production, I'm willing to do my best to suck it up.

[icarusancalion.livejournal.com]

You can read the reports. It could be they're exaggerating the positives for the sake of not frightening the stock-holders, but reading what the oil industry has to say they've held up just fine.

I note that the gas prices have been rising steadily for two years. Have there been fires, hurricanes and problems with the refineries for two years?

I also note that companies like Haliburton (Dick Cheney's former employer) were caught red-handed scamming the US in Iraq just last year, and Cheney's co-sponsored energy policy was created after private meetings with Kenneth Lay of ENRON.

I'm sure that's exactly what they're telling your father and various other big power-plant customers, but if they're gonna lie to anyone it's going to be the customers who really bring in the money.

I don't buy it. The facts don't add up.

Icarus

[wikdsushi.livejournal.com]

Actually, there have been serious issues in the refining business since the '70s and the introduction of strict EPA regulations. The regulations are a good thing, but the downside has been that there's been enough political pressure from environmentalists that no new refineries have been built since 1973. The ones that do exist are far too small in number and too behind in technology to keep up with modern-day fuel demands.

Add in the vastly increased demand for oil in other countries--China and India, namely--and oil producers' desire to sell to the highest bidder, and price per barrel has skyrocketed. Major nations that were only starting to really develop twenty, thirty years ago are now major players, both politically and economically. With that power comes the same need for fuel we have in the US.

All things told, the Halliburton situation probably accounts for less than twenty-five cents a gallon. Maybe less than ten. This is just plain supply and demand. Between a limited commodity being divided between more and more nations, and the gradual and, eventually, sudden drop in American refining, and it's frighteningly reasonable to say that $5/gallon is fair.

[icarusancalion.livejournal.com]

If that's the case, then why haven't fuel prices steadily risen over the last the last thirty years?

The stats aren't matching up with what you're telling me. Two years ago gas was $1.65, now it's $3.00. This isn't a thirty year rise. This is a two year increase. Your explanation would make sense if we had had a slow increase in prices. I'm sure this is what your father is told and what the industry uses as its excuse. But it's untrue. And it isn't reasonable to be suddenly paying $5.00 a gallon.

The Halliburton situation speaks to the ethics we're dealing with, which are clearly less than stellar.

Icarus

[wikdsushi.livejournal.com]

The biggest jump in Chinese and Indian industry happened about the same time the US started exporting all its business to those countries. Within the last five years, we've bolstered their economies enough to give them a need for increased quantities of fuel. It would have happened eventually, but overseas outsourcing has brought even more people into major cities, and with it brought the generalities of modern life.

And increase in fuel costs isn't a two-year thing. This has been going on since the Clinton administration, when fuel prices were deliberately driven up in order to promote cleaner air. Unfortunately, it had no real effect on air quality, and only hit consumers both in fuel costs and in the cost of everyday living, thanks to increased shipping costs. (I'm not so worried about five bucks a gallon for myself. However, the trucking industry has to keep going, so this is going to affect the price of literally anything bought and sold over any significant difference.)

As for two years ago, that's when the first real impact to the refining industry took place. A refinery in I think Alabama caught fire, which was met with a firestorm of new environmental regulations, which increased production cost, which was passed on to the consumer. Since then, it's only got worse, and now we're running on the same demand that we had a week ago with maybe a third of the supply.

It's just a huge, messy, complicated situation with no easy answer and a lot of long-term and recent shit. IMO, it's pretty fair that we should pay the same petrol prices as anyone else in the world, but we're seriously going to have to restructure the economy, which takes far, far more than it gives in comparison to the other countries where fuel costs a small fortune. Without taxes, we're paying about the same as most of Europe. However, in most European countries, the taxes added onto petrol come back more fully than ours do.

[icarusancalion.livejournal.com]

I agree with you there. The prices started inching up with sudden flood of outsourcing that followed the tech stock crash -- I was thinking about the timing as I was reading and replying to your last post. Also there's the impact of the war in Iraq and oil companies' expenses there. We're losing the war and they're losing money.

But the oil companies had an uncommon control over the increases in prices which speaks to me of ENRON and price-fixing. There's more than just supply and demand going on. It's high time for an investigation.

Icarus

[wikdsushi.livejournal.com]

Just to note, my inhertance is actually through an oil field somewhere in Indiana. :) My aunt and uncle bought into it a few decades ago, and they kept up on their investments. Dad's actually a retired electrical engineer. He couldn't play the stock market if a time-traveller handed him a CD of every Wall Street Journal financial page for the next hundred years. ;)

[icarusancalion.livejournal.com]

And I'm a former employee from a Fortune 500 investment consulting firm (well, their investment consulting arm), and WG's father is a prominent economist.

Sushi, those oil companies have entire fleets of helicopters. They were in use this week checking out their own oil facilities. Where were they in the evacuation efforts?

Icarus

[wikdsushi.livejournal.com]

I can't say it's right of them not to help, but, alas, it's their own choice. They're funded by consumers and stockholders, not taxpayers. The government being so slow on the uptake is unforgivable, because we've all already paid for relief efforts that just aren't there (and so we're paying again by giving to charities, who are forced to do much of the government's job). However, private corporations do have a choice in the matter, and reprehensible or not, they had no obligation to help.

Sorry, I'm being a realist tonight. In a perfect world, more private industries would help, but as so many people saying that NOLA deserves what happened have proved, it ain't a perfect world. :/

[icarusancalion.livejournal.com]

I grew up next door to a very wealthy and successful investment banker (we lived in a gated neighborhood on lakefront property). He and his wife were my mentors as a child and they would never stand for this sort of attitude from the oil companies.

She said that they would have preferred to donate money to their preferred charity anonymously (they were the tenth largest private donors to the United Negro College Fund) but decided to shame their associates into donating -- to something, anything. She explained to me when I was nine, "It's a sad fact that some people have to be convinced to do the right thing but if that's what it takes? Then I shall."

She was the one that taught me that we have a responsibility to take care of those less fortunate, especially if we are well-off. "And I have been very fortunate in my life," she explained.

She was a realist. She would say that that attitude of the oil companies is not realism, it is selfishness, and inexcusable. People were dying and they had the means to help them. How can that ever be acceptable?

My strong words aren't directed at you but at the oil companies. As far as I know you don't have a fleet of helicopters a few miles from the disaster area.

Icarus

[icarusancalion.livejournal.com]

*doubletake*

Wait-a-minute. I haven't been online most of the day (impossible with my current job unless I'm the only one in the office) -- are people really saying people of New Orleans deserved to be left to die of starvation in squalor? Who are these people and what the hell's wrong with them?

Are they really believing Bush's spin on this in the media? His focus on the violence -- because that's all you can say when your response is already too little, too late: "well, they didn't deserve our help anyways."

Please tell me my flist isn't so stupid as to buy it.

Icarus *facepalms on the idiot factor*

[wikdsushi.livejournal.com]

Nah, most of LJ is as baffled as we are. However, they've been reporting that sort of shit as hearsay left and right. It ranges from, "Well, they were told to evacuate, and they didn't," to, "This is what they get for being crackheads and heathens." Pat Robertson's been on a tirade that this is God's judgment on New Orleans for being a corrupt, lawless city, too, though most people I've seen just think he's an idiot.

On the other hand, I've also heard reports of staunch Republicans saying that Bush needs to be removed from office if he can't do his job. Most people seem to think the whole evacuation was pretty much botched and seriously failed, and that if it had been called when Katrina first posed a threat, most of the city would have got out.

Fortunately, sanity seems to be in the majority.

[icarusancalion.livejournal.com]

Fortunately, sanity seems to be in the majority.

Thank god. *wipes sweat off brow*

On the other hand, I've also heard reports of staunch Republicans saying that Bush needs to be removed from office if he can't do his job. Most people seem to think the whole evacuation was pretty much botched and seriously failed, and that if it had been called when Katrina first posed a threat, most of the city would have got out.

Hoorah! I couldn't agree with those staunch Republicans more.

wildernessguru says the Army National Guard alone has over a 1,000 Blackhawk UH-60 medium lift helicopters and several hundred Chinook heavy lift helicopters, not all of which are in Iraq. Even if a third of them were down for maintenance that still leaves several hundred.

Bush could have sent two battalions of 40 Blackhawks each. That could've airlifted out a few thousand people in a matter of days. He could have sent a squadron or more of Chinooks bringing supplies (they have a 20,000 lb. capacity apiece). Could've brought in drinking water, purification, support personnel, MREs....

WG says it makes him want to scream knowing the exact (he keeps up on the military stats daily) capacity of our military and what wasn't used. "It's utterly appalling. Utterly appalling. This is the main purpose of the National Guard." And he points out the oil companies have fleets of hundreds of helicopters too.

I have to calm him down now. He almost ripped the curtains off the wall closing them just now.

In the meantime, I'm directing my efforts towards nudging the oil companies into thinking about that magical question "who's gonna pay for the clean up? Us?" Because when Bush says 'private citizens' should take care of these things, well only 'private industry' has the money to do so. Do they want to pay for the repairs? If not then they need to push for Bush to do so.

Icarus