The "NOIVE" of Those Guys!!- Big Oil Strikes Again!!!

Not just happy to be making a killing in profits this summer, Big Oil now appears to be setting it up for very long time. Their announced intentions as well as broken promises should do the trick.

Monday's Northwest Herald, out of Crystal Lake, Illinois, had an article by H. Josef Hebert of AP: "Big oil refines its plans: No expansion could promote his gas prices."

And here I sit in Illinois when I should be out in Fort Morgan, Co, at the Lincoln Highway Conference. I canceled it and my motel reservations because of the ridiculous gas prices. I have also scaled back or dropped more planned vacations this summer.

Hebert said that the government's push for biofuels is causing Big Oil to scale back plans for refinery expansion. "This could keep gas prices high, possibly for years to come." Who'd have figured that if you keep the supply low and demand high, that prices would go up and stay up. I never would have thought that possible. Perhaps Big Oil is onto something?

"Oil industry executives no longer believe that there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions- as much as 10% increase in new refining capacity..." Well, anyway, that's my story and I'm sticking to it.

People are driving less and purchasing vehicles with better mileage. This would cause the demand to drop and gas prices to come down. Big Oil's response will be to keep refinery production low. That way they can keep those huge profits coming in.

Hey, who was it who hasn't built a new refinery in a very long time, not have they increased the output of existing ones?

Mark Cooper of the Consumer Federation of America said, "By creating a situation of extremely tight supply, the oil companies gain control over the price at wholesale level."

Last year, Big Oil told the government that they were going to use the huge profits they were making to expand refining capacity. They are reneging on that promise. It would appear part of the reason is to "get back" at the government for pushing programs that could cut into these huge profits. This would also "get back" at the consumers for doing the right thing and using less gas.

My own thought is that Big Oil has been planning this for a long time. Let' s see, there are more and more cars out on the roads and people are moving farther and farther away from work for more affordable housing. That will create a bigger demand. Now, let's make sure we don't increase our refining capacity to meet that demand. You know, we just might be able to make a buck out of this using the law of supply and demand. And then, we always have that tried and true excuse of the vaunted "Summer Driving Season" to use.

As Good 'Ol Curley of the Three Stooges used to say, "The Noive of Those Guys." --RoadDog

THIS DATE IN HISTORY- While on the subject-- 1977- Oil flow from Alaska's north coast Prudhoe Bay begins as the 800 mile long 48 inch diameter Alaskan pipeline opens. The huge Prudhoe Bay oil field had been discovered in 1968.