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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (560)	6/15/2001 9:58:38 PM
From: Sam	Read Replies (1) \| Respond to of 1715

The entire article is reprinted below. It is about time that someone looked at that $4 billion that was passed to PG&E's parent a few years ago. Citing bankrupcy filings and profit and loss figures, as someone on this thread has done, is silly--that assumes that the game is really for the benefit of the shareholders and the company as a whole. The game is really for a few people in a senior management and their friends. That is where to look, not in P&l statements, even if they do play a part at times. But they aren't always necessary. June 15, 2001 Oil Data Show Industry Role in Shortages Is a Possibility By THE ASSOCIATED PRESS ASHINGTON, June 14 — Although the Bush administration has pointed to a shortage of refineries as a reason for energy shortages, oil industry documents show that five years ago, companies were looking for ways to cut refinery output to increase profits. It takes about four years to build a large refinery, so any substantial addition to capacity from new plants would have had to begin by the mid- 1990's, energy experts acknowledge. But industry documents obtained by Senator Ron Wyden, Democrat of Oregon, suggest that in the mid- 1990's, oil companies had no interest in building refineries because of low profit margins and, in fact, were discussing the need to curtail refinery output to increase profits. "If the U.S. petroleum industry doesn't reduce its refining capacity, it will never see any substantial increase" in refinery profits, said a Chevron Corporation document in November 1995. The memorandum cited warnings about refinery profits from a senior analyst at the American Petroleum Institute, the industry trade group, at an industry conference in 1995. A spokesman for the institute, Jim Craig, said today, "We don't know about these alleged internal company memos, but the idea that the A.P.I. would warn member companies on profits is ludicrous." The institute provided statistics showing refinery capacity has increased since 1996 as refineries became more efficient and some expanded. The figures also showed capacity increasing slower than demand. A Texaco official, in a March 1996 memorandum, said refinery overcapacity was "the most critical factor" facing the industry and was responsible for "very poor refining financial results." The Texaco memorandum concluded that "significant events" were required to deal with the excess refinery capacity problem. It suggested that one solution might be to persuade the government to lift clean air requirements for an oxygenate in gasoline. Removal of the additive would require more gasoline to be used in each gallon of fuel, tightening supplies. Although refinery capacity has now become tight, the oil industry is still pressing for an end to the federal requirement for an oxygenate in gasoline, arguing that new blends of gasoline can meet the same clean air requirements. Texaco spokeswoman Keelin Molloi said Mr. Wyden's accusations "divert attention away from legitimate policy questions" about energy needs. Texaco and Chevron are awaiting government approval to merge, creating the nation's fourth-largest oil company. The need for more refinery capacity has been the focus of President Bush's energy plan. Vice President Dick Cheney frequently has blamed tight supplies for gasoline price increases. He has said the lack of new refineries in the past 25 years was mostly responsible for tight supplies.