In the late 1990's, oil companies shut down 24 oil refineries. Prior to that time, many oil company executives (according internal documents) were concerned that they were refining too much oil - and it was cutting into their profit margins. So they shut down refineries...and their profits increased dramatically. But now (according to them) there is a refinery shortage. They say it's becoming a "crisis".
So who should help with re-building the refineries?
Why US taxpayers, of course. With the Republican sponsored bill called Gasoline for America's Security Act, which passed in the House last week.
According to a
2001 Report (PDF) by Senator Ron Wyden (D-Oregon), 24 oil refineries were closed between 1995 and 2001. At the same time, documents showed that oil company executives were worried that they were refining too much oil.
"As observed over the last few years and as projected well into the future, the most critical factor facing the refining industry on the West Coast is the surplus refining capacity, and the surplus gasoline production capacity. The same situation exists for the entire U.S. refining industry. Supply margins, and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and or increasing the demand for gasoline"
Internal Texaco document, March 7, 1996
"A senior energy analyst at the recent API (America Petroleum Institute) convention warned that if the US petroleum industry doesn't reduce it's refining capacity, it will never see any substantial increase in refining margins...However, refining utilization has been rising, sustaining high levels of operations, thereby keeping prices low."
Internal Chevron document, November 30, 1996
According to Wyden "Information I have received during my ongoing investigation raises serious concerns that the nation's major oil suppliers have set out in a strategic effort to orchestrate a financial triple play, a coordinated effort that would reduce supply, raise prices at the pump and relax environmental regulations."
From 1995 and 2001, 24 refineries were closed. At the same time, oil industry profits steadily increased (Texaco's income, for example increased 4 times during that period). And now, the oil industry is working on getting the environmental rules relaxed - with the help of their Republican "friends".
Last week,on October 7th a Bill called the Gasoline for America's Security Act passed in the House . It's purpose is to "expedite the construction of new refining capacity in the United States". The Act states that it will:
- Reduce environmental and other regulations affecting refineries under the Clean Air Act and reform expeditiously the New Source Review programs.
In other words, relax environmental standards. The New Source Review is a program that requires owners of aging power plants and industrial facilities to modernize pollution controls - particularly air pollution. It also:
- Authorizes the Secretary to enter into contracts with non-federal entities that the Secretary determines to be the first non-federal entities to enter into firm contracts after enactment of this Act to construct new refineries in the United States or refurbish and return to commercial operation existing but nonoperating refineries.
- Establishes in the Treasury the Standby Refinery Support Account to implement refinery revitalization. .
Hmm...I'm not a lawyer, but it looks to me like taxpayers will be paying for much of this. And who are these non-federal entities that will receive the contracts?
This is just one of the many new energy bills being passed under the guise of "hurricane relief". Its real purpose is to help the oil industry avoid environmental protections laws, primarily the Clean Air Act. It also gives handouts (more corporate welfare) to the oil industry.