LAWMAKER SUSTAINS HARMFUL MYTH WITH GRIPE ON REFINING

Bob Tippee
Editor

Watching Congress respond to rising fuel prices is painful.

Lawmakers didn't have to worry about fuel costs when prices were low—which was most of the period between 1986 and 2002. Consumers certainly didn't worry. They were taking to the streets in sport utility vehicles and monster pickup trucks. So Congress felt no pressure to wonder whether the comfort would last, which of course it could not.

Now, with markets tight, lawmakers who haven't given two serious thoughts to oil and gas for years must pretend to be on top of things. To many of them, that means asserting discredited myths and exploiting popular ignorance.

The latest example is an Apr. 18 letter from Sen. Charles E. Schumer (D-NY) to Federal Trade Commission Chairwoman Deborah P. Majoras complaining that refining capacity utilization lately has fallen below 90% (OGJ Online, Apr. 19, 2006).

"Given the past behavior of the oil companies who take advantage of natural or cyclical occurrences and raise prices even more than necessary, this requires scrutiny," Schumer harrumphed.

Good grief. Capacity utilization is down because three refineries remain idle from hurricane damage and others have been undergoing storm-delayed maintenance. Beyond the refining constraints, fuel manufacturing and handling costs are rising, and crude prices are leaping, all for well-documented reasons. Yet all Schumer can see is chicanery by oil companies.

There is no "past behavior" of companies raising prices "even more than necessary." No such practice came to light in any of the investigations blustery lawmakers instigated in response to past price upswings. And none will emerge in the probe Schumer wants.

Yet politicians like him keep trumpeting the same old suspicions. Why? Are they hopelessly dense? Or do they think the easy political gain available from misguided prejudice warrants serial falsehood?

The US needs to outgrow the silly belief that malign forces—not market dynamics—raise oil prices. The myth clouds thinking about energy and fosters too many policy mistakes—including several now raising the costs of vehicle fuel.

In view of how often it's been refuted, the myth is not just incorrect. It's also a wicked lie.

(Online Apr. 21, 2006; author's e-mail: bobt@ogjonline.com)

Related Articles

Phillips 66 considers splitter at Sweeny refinery

03/21/2014 Phillips 66 is evaluating the potential for the addition of a condensate splitter near its 247,000-b/d Sweeny refinery in Old Ocean, Tex., just sou...

Second small diesel refinery planned for North Dakota

03/21/2014 Quantum Energy Inc. (QEI), Tempe, Ariz., said it has secured land for the construction of a 20,000-b/d grassroots hydroskimming refinery in North D...

Flint Hills settles Port Arthur pollution case

03/20/2014 Flint Hills Resources (FHR) has reached a settlement with the US federal government to implement innovative technologies to control harmful air pol...

WoodMac: Global ethylene demand, production on the rise

03/20/2014 Ethylene-producing assets that have access to low-cost natural gas feedstocks, such as the ones in North America, will lead the competition in glob...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected