Oil – July 30

Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage

It’s not all about oil
Jeff Donn, Associated Press
Analysis: Gas prices rise independently, drop more slowly
—
Refineries such as this Chevron facility in Richmond may be largely responsible for gas prices, an Associated Press study finds.
—-
U.S. oil companies blame the global oil market for high gasoline prices, but a close analysis of pricing suggests it’s not so simple: The run-up at the pump also comes from domestic refining, which is largely controlled by Big Oil.

The Associated Press examined pricing trends since 1999, which was the starting bell for the modern era of pricier gasoline, and asked several economists to analyze the results. It found evidence that:

The portion of gas prices tied to refining has ballooned on its own, apart from oil.

The suspicion of frustrated drivers is correct: After upward spikes, the price of gasoline drops back more slowly than the price of oil — and someone pockets the difference.

…If that’s true, gas prices most likely will remain high, regardless of what oil prices do, said Sean Comey, a spokesman for AAA of Northern California, which tracks gasoline prices in the state.

“If the oil companies are selling as much gas at $2 a gallon as they are at $3.15, where’s the incentive for them to lower prices?” Comey said. “That’s why we are trying to encourage people to conserve. Even small cutbacks can make a big difference.”
(29 July 2006)

Oil execs speak out
Lynn J. Cook, Houston Chronicle
High prices, war in the Middle East and global warming concerns have transformed energy from a dull industry taken for granted by many Americans into a top-of-the-mind pocketbook issue for consumers.

The Chronicle posed 10 questions to several top executives of the world’s major oil companies on topics ranging from gasoline prices to U.S. energy security to hefty company profits.

Some of the CEO answers — delivered by e-mail last week as BP, Royal Dutch Shell and ConocoPhillips were reporting their second quarter financial results — might be surprising.

James Mulva, head of Houston-based ConocoPhillips, supports the idea of raising fuel efficiency standards, forcing automakers to build vehicles that get more miles to the gallon.

Robert Malone, BP’s new chairman of U.S. operations, said he wanted to buy a hybrid pickup truck but couldn’t find one that was American-made. He opted for an E-85 — ethanol-ready — truck instead.

And John Hofmeister, president of Shell Oil Co., declared “The debate is over about climate change.”

Some answers were edited for length.
Read the Q&A for:
• James Mulva, Conoco-Philips
• Robert Malone, British Petroleum
• John Hofmeister, Shell Oil Co.
(30 July 2006)

Oil boom puts stress on water supply
Hanneke Brooymans, The Edmonton Journal
Groundwater quality, survival of fish at stake
—-
This increased scrutiny of the oilpatch’s water use has made the industry nervous. Boutilier says the Canadian Association of Petroleum Producers recently asked him, “Why are you picking on us? What about agriculture?”

Agriculture accounted for 46 per cent of the province’s total water allocations in 2001. But Boutilier notes that the sector has already improved its water use efficiency by 30 per cent.

In Alberta in 2004, more than seven per cent of all water allocations was for the production of oil and gas, according to a report on the industry’s use of water by the Pembina Institute, an environmental think-tank. The proportion of groundwater allocations is far higher, at 37 per cent.
(29 July 2006)