Big Dog's Boom Boom Room Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: profile_14 who wrote (84414)	5/12/2007 10:25:22 AM
From: ChanceIs	Read Replies (1) of 206191

>>>refining companies in the past even lost money some years.<<< It is interesting to own a business which morphs one form of energy into another. They all suffer the potential to have someone set up next door. Refineries are already regulated from an environmental viewpoint - not sure that is a bad thing. They are also very regulated about their product output...E85, summer formula, winter formula, etc. I don't think it would be a great leap to see them become regulated utilities if we keep going down this path. That of course would not help prices or supply. Airlines were free and then became regulated. Same with electric utilities. I am not sure about water and telephony. I think that the refineries should be viewed with great caution here. The California electric crisis example of the ex-post facto setting of prices by the government seems to be always in front of me. Just last week, Calpine petitioned the US Supreme Court to hear its case to revoke 9th Circuit's command to FERC to review the prices of contracts signed back in '01....to see if they were "fair and reasonable"...or ...."in the public good." (Fair and reasonable....does that sound a little like price gouging??? Very easy to define. What did one Justice say: 'I can't define pornography, but I know it when i see it.') So is there some scrap of legislation that the anti Big Oil crowd might drag out and say - 'these transaction need to be reviewed.' I saw it happen. It is still happening. It was very financially painful to be on the wrong side. Look at the government with the GOM royalty leases. No royalty language was in the leases....but it should have been. So you oil companies owe us about $1 billion. And if you don't pay it, we will break your thumbs and ban you from future business in the GOM. So will it be thus with refiners??? El Paso paid $1.4 billion to settle a market manipulation (withholding pipe capacity) case for NG into California. So the refineries deliberately withheld capacity. There is something somewhere with which the government can start to tear the flesh from the refiners....and make them cough up a few gigabuck political trophy. Quite a long rant here. I guess I have seen Wall Street break and run many times when the government draws a bead on a business. The hair on the back of my neck is twitching when it comes tot he refiners. Assets in the ground or machinery which morphs assets from one form to another. Its relatively easy to build competing machinery. Its harder to build new assets in the ground. I like the smaller E&Ps. Drillers don't morph energy. I can't imagine Hillary accusing Cloyce Talbot of deliberately withholding a rig. You can move them around a lot faster than a refinery, and unlike the latter, when folded down are below the radar.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next