Looks Like Mid Westerners Can Blame Big Oil after All

[jjm]

"Federal regulators found Marathon Ashland Petroleum LLC intentionally withheld supplies of gasoline from the Chicago and Milwaukee markets early last summer to keep prices high, according to a report in The Wall Street Journal. It wasn't illegal, but it is a tactic that likely will be scrutinized in Washington in the wake of this year's sharply higher gasoline prices."

Link

 

[Tominator]

I don't have a subscription....although I'm sure it will become available from other sources.

 

[Helpless]

..leave it to the Times to criticize companies for running their business as they see fit...

 

[Thump553]

helpless:

Read the (very short) post before making your foolish comment-the Wall Street Journal reported the story, not the "Times."

I presume that you are in favor of allowing oligopolies to price gouge and manipulate prices as they see fit?

 

[jjm]

I would have posted a direct link to the Journal, but it is a paid site, so I posted the reference in the Times.

I think it is pretty interesting that this finding was permitted to go forward under GWB's watch. By the way, BP was named as well.

 

[MrMarley22]

To get into the site, it's:

linux
linux

-Marley

 

[Tominator]

The Times is paid also...

 

[Talon]

I think this is the report you're looking for.

http://www.ftc.gov/os/2001/03/mwgasrpt.htm

 

[rmeijer]

Isn't the NYT free? I think you just need to endure their spam to get articles.

 

[jjm]

The Times is free. Just have to register.

Thanks for the link, Talon.

 

[Texmaster]

Actually Midwestern folks can blame the farmer's unions because they are the ones sporting Ethenol fuel which has been proven not to make a shred of difference in the enviroment while making gas cost even more. In fact it hurts the enviroment more because it burns faster than regular fuel forcing you to buy more while your Mpg take a 3-4 mile hit. Not only that, it has corrupted the water table in many places where its been used.

http://commdocs.house.gov/committees/science/hsy273180.000/hsy273180_1.HTM

I went to college in the Midwest and this is one of the biggest reasons fuel prices are so high in that area and have been that way since 94.

 

[jjm]

Unfortunately, the farm subsidies crowd will never let the ethanol failure go away. Ironically, I believe the subsidies have been shown to be generally more beneficial to the grain processors and corporate farms than they are to small farmers. Hmm, benefits corporations. Nope, they will never get cut.

 

[Texmaster]

<< Unfortunately, the farm subsidies crowd will never let the ethanol failure go away. Ironically, I believe the subsidies have been shown to be generally more beneficial to the grain processors and corporate farms than they are to small farmers. Hmm, benefits corporations. Nope, they will never get cut. >>



LOL Got news for you. Most things do benifit corporations. Like the green movement who LOVES this reformulated gas.

 

[Kanly]

Seems like Bush and his EPA love ethanol also:

Bush to Insist on Ethanol Use in California

&quot;The Bush administration has decided to force California to use ethanol as an antipollution fuel additive, a move that the critics say could result in an increase of at least 5 cents a gallon at the pump this summer in that state.

California had asked the federal government to be exempted from a Clean Air Act requirement to use fuel additives like ethanol to cleanse its gasoline, arguing that cheaper technologies were available.

Administration officials said today that the government would issue a decision on Tuesday denying the request.

... The decision opens up the biggest market in the country to corn producers and, in particular, could benefit the Archer Daniels Midland agribusiness, a major Republican contributor, because it is one of the few ethanol producers able to transport ethanol to the West and East Coasts.

But environmentalists say there are now less expensive, less complex ways to reduce such pollution than adding ethanol.

And they contend that Mr. Bush's decision is intended to solidify his support in the farm states that he won in the last election and help him make an important overture to Iowa, which he lost.&quot;

 

[vi edit]

That's the nice thing about living in Iowa. The state government gives a break to venders who sell ethanol. The ethanonl blends are running around 90 octane and are $.02 to $.03 cheaper than the 87 octane gasoline.

 

[Texmaster]

<< Seems like Bush and his EPA love ethanol also:

Bush to Insist on Ethanol Use in California

&quot;The Bush administration has decided to force California to use ethanol as an antipollution fuel additive, a move that the critics say could result in an increase of at least 5 cents a gallon at the pump this summer in that state.

California had asked the federal government to be exempted from a Clean Air Act requirement to use fuel additives like ethanol to cleanse its gasoline, arguing that cheaper technologies were available.

Administration officials said today that the government would issue a decision on Tuesday denying the request.

... The decision opens up the biggest market in the country to corn producers and, in particular, could benefit the Archer Daniels Midland agribusiness, a major Republican contributor, because it is one of the few ethanol producers able to transport ethanol to the West and East Coasts.

But environmentalists say there are now less expensive, less complex ways to reduce such pollution than adding ethanol.

And they contend that Mr. Bush's decision is intended to solidify his support in the farm states that he won in the last election and help him make an important overture to Iowa, which he lost.&quot; >>




If Bush is supporting it then he is DEAD WRONG. Its a horrible idea that hurts the enviroment more than it helps.

 

[Kanly]

Why the &quot;if&quot; Tex?

Calif. Forced to Switch to Ethanol for Cleaner Air

&quot;Reuters: WASHINGTON--The Bush administration on Tuesday rejected California's request for a waiver from federal rules requiring cleaner gasoline, giving a major boost to the U.S. ethanol industry.&quot;

 

[Kosugi]

Fascinating.


It just shows that Bush has a price tag, not a conscience.


Clinton had a price tag too, but he also had a conscience. (just to cut off clinton/bush comparisons before they begin)

 

[Kanly]

Looks like as a candidate, Bush felt the enviromental regs about reformulated fuels were pretty responsible for high gas prices, and maybe even some gouging was going on!!!!!

Bush, asked what he would do about gas prices: &quot;I think a couple of things. One is to make sure they [consumers] are not getting gouged. I have heard the reasons is well, more regulations or more attempt to make the gasoline conform to clean air standards.&quot; [WKYC, Cleveland, OH, 6/17/00]

 

[Tominator]

I fail to really see anything Bush has done is wrong.

IF there was gouging and it was legal, what in hell would you have him do? Laws must be changed and it was only 1 ingredient in the price of energy.

Now, the Liberals want exempted from the laws they pushed down our throat! ROTFLMAO!!!

Where were the exemptions for the Midwest when gas cost over $2 a gallon.....LOL!


And if you want to see a group that has been on the brink of bankruptcy for many years, look no further than US Farmers.....this helps them out bigtime!

 

[jjm]

Tominator - You obviously did not read the report. The states asked for exemptions but they did not matter. The same report noted that refiners could not / would not deliver alternative supplies. Read before you make an obviously silly statement. It makes you look like you are just bashing people to be partisan. You wouldn't do that sort of thing, would you?

Edit:

As for helping farmers, are you saying that some government handouts are good even when the market says such inefficient operations should fail?

 

[glenn1]

So what's the problem? This is a free market, no one is obligated to sell anything to you, or offer it for sale in any particular quantity.

 

[jjm]

glenn1 - I can't believe you blurted out something so foolish. The oil industry is an oligopoly (relatively few suppliers), not a market with adequate competition. Go back to your ECON 101 text. Even single providers in an oligopoly have enough clout to manipulate market prices enough to cause major changes. That's why oligopolies are generally subject to greater scrutiny and regulation. They don't operate in a truly free market.

 

[Tominator]

jjm

Just making a generalisation as this story has popped up in several places with different twists...

I live exactly in the middle of the Gulf States and the Chicago Milwaukee corridor. I drive a truck for a living, so I get a view of the real story from ground zero not available to a bunch of number crunchers. Drivers were 'imported' from other parts of the country to try and meet the demand. They brought equipment that was already needed in other parts of the country. Remember that at the time of the 'shortage' the economy was still somewhat hot. There was no excess capacity.

Now, Clinton and the EPA FORCED regulations on the cities, St. Louis Missouri being one as well as Chicago and Milwaukee. This meant ANOTHER fuel formulation. There were no excess pipelines or other methods to deliver the new fuel. The capacity came from other markets. Demand equals higher prices....this has never changed no matter the commodity.

Michigan was on the top end of the corridor. During all this a major pipeline ruptured in Jackson Michigan. Union 76 won a major lawsuit against the other refiners for a patent infringement on the process to make the reformulated fuel. The competition was forced to pay a royalty of millions of dollars.

And on top of all this to try and meet capacity workers to build pipelines were going 24 hours a day at a HUGE cost.

THIS is what happened. I know some drivers that drive tankers. How were they holding back supplies when they had the 'pipeline' at full throttle.....bunch of number crunchers...:disgust:









<< As for helping farmers, are you saying that some government handouts are good even when the market says such inefficient operations should fail? >>



It's not a handout when it is their tax money to begin with. Agriculture has been hit hard by government regulation just as other business has. They compete with farmers in other countries who are not under the same restraints. Whether those restraints are good or bad is another post. At present grain is one of our main exports and without the Goverment acting as a broker combining deals in other markets and opening up new markets, they could not survuve efficient or not. This trade is neccessary for the security of this country. Technology, just like in so many other sectors, is the answer but without help and representation they are doomed to fail.

 

[jjm]

Tominator - You still have not read the report. The link is in this thread, go read it. It discusses all the accidents, reformulated gas, etc. But it notes that some oil companies, acting in their own self interest to maximize profit, chose to withhold supplies. It also notes that the oil companies made bad demand assumptions too, so they were to blame on (edit: fixed typo) two counts. The oil companies were not the whole problem, but they were a piece of it. So people can blame Big Oil; they did screw up.

And who needs inefficient, small farms anyway? Large, corporate-owned operations are the bane of small farmers. They are more efficient and produce more than we need to feed the US population and have plenty left for export. Capitalism punishes the weak. Why should the inefficient portion of an industry be propped up artificially? I mean it's a romantic notion, but there is no economic justification for it. If you are a hard-headed capitalist, where is the economic benefit of propping up small farms which are destined to fail anyway?