Get Ready For More Congressional Hearings

Last week's socialist circus performances by Schmuck Schumer (Moron-NY) and Kameraden Madame Maxine Waters (Moonbat-CA) may well be soon eclipsed after they become aware of this. Bring it on.

Energy giants smell windfall from sulphur

A Kazakh worker pours liquid sulphur at the Tengizchevroil refinery. Large quantities of crude oil is produced at Chevron’s Tengiz project
An ugly waste product of oil refining has been transformed into a golden windfall for energy companies as demand for fertilisers drives the price of sulphur to unprecedented levels.

For decades oil refiners have struggled to shift stockpiles of the yellow chemical, which is used to make sulphuric acid, essential in the manufacture of fertilisers. Food shortages and higher grain prices are boosting demand for fertilisers, and in only a year the price of sulphur has risen more than tenfold from $50 a tonne to $500 a tonne, according to ICIS, the chemicals-pricing service.

The extraordinary surge in the price of sulphur is expected to generate windfall profits for some oil companies, notably Royal Dutch Shell and Chevron, as well as Gulf oil producers, such as Saudi Aramco and Adnoc, the Abu Dhabi national oil company.

“Shell is one of the most-efficient producers of sulphur,” Barry Clarke, a sulphur market analyst for Pentasul, said. Shell produces about 3.5 million tonnes of sulphur, much of it from its Canadian oil sands business, and its cost, Mr Clarke reckons, is merely the rail freight cost of getting the sulphur to a port, about $25 a tonne.

Mr Clarke agrees that sulphur, once a burden, could earn the oil industry billions this year. “It’s going to show up in the earnings of companies,” he said.

Congressional hearings to be announced in 5 ... 4 ... 3 ...

The price is expected to rise further with spot cargoes changing hands for as much as $700 a tonne. Demand for metals is also keeping sulphur bubbling, as sulphuric acid is used in the mining industry to leech metal from ore.

So large was the sulphur surplus a decade ago that mountains of the chemical were being formed, notably in Kazakhstan, where high-sulphur “sour” crude oil is produced in large quantities at Chevron’s Tengiz project. A spokesman for Chevron confirmed that the stockpiles were beginning to erode as the company was finding demand for more than the annual output from the Tengiz field.

“Last year we sold a record 2 million tonnes,” he said. “We sold 126 per cent of production.”

Chevron wants to raise output to 3 million tonnes, further levelling its stockpiles, and Shell has recently developed a separate global business, based in Canada, to market its sulphur output.

Patrick Romeo, general manager of sulphur marketing for Shell, said that the market was undersupplied. The reason for the extraordinary price surge, he said, is that sulphur producers cannot respond to price increases and produce more. Sulphur output is purely a function of the amount of “sour” crude oil and sour gas that is processed by refineries. Mr Romeo said: “There is not much you can do about producing more sulphur. We are trying our best to put everything we have in stock into the market.”

The cost of sulphur and phosphates, another essential fertiliser ingredient, is sparking protests from politicians in developing countries, such as India, where the Government subsidises fertiliser to keep costs down for poor farmers.J.S. Sarma, secretary to the government department of fertilisers in India, said that prices were abnormally high and not justified. “I would not be honest if I said that it is not putting a strain on [India’s] financial resources,” he said.

The estimated cost to the Indian Government of the fertiliser subsidy is $22 billion (£11 billion), more than double last year’s figure.

According to Pentasul, the world produces about 47 million tonnes of sulphur annually, but the world’s ravenous demand for food is telling the sulphur market that 49 million tonnes is needed. Meanwhile, the opening of new mining projects adds further pressure on demand, creating huge price spikes.

Shell is confident that the price surge is temporary, and the company is developing products, such as sulphur-based concrete, anticipating a future surplus. It said: “There will be more sulphur in the market in the longer term and it will be overproduced as the world uses more unconventional oils, such as oil sands. Unconventional oil means more sulphur.”

Desperate to find a link to global warming climate change further perpetuate his hoax, al-Gore was unavailable for comment.

Via TimesOnline

Another Maxine Waters Envies Hugo Chavez's Utopia Post

Everybody knows by now the oil executives were up on Capitol Hill again yesterday for another round of bashing by the congress critters who see no shame in loading up all sorts of different bills with their favorite pork barrel spending project using your money over their profits.

The fact is the oil execs are just as much held hostage to the price of oil as determined by chicken little, sky is falling stockbrokers on Wall Street as the rest of us. It is the various markets around the world who determine the price of a barrel of oil and the usual pattern is Monday through Wednesday they drive the price up and then on Thursday and Friday they back off a little bit by cashing in on their profits and then go off and enjoy their weekend.

If Congress really wants to grill somebody they need to bring in some of largest brokerage firms who deal in oil futures and ask them about their bonuses and salaries.

Anyway, here is Maxine Waters threatening to have the government take over the oil industry because after all we all know what a good job the government does at running things.

Oh yeah, she even lets slip the "Socialism" word and watch the reaction of those sitting around her.

Link: sevenload.com

Oil Companies Investing in Production? Can't Have That

Oil companies have significantly increased investment in production, much to the dismay of our friends at Reuters.

The five largest fully publicly traded oil firms are spending more on finding and producing oil, but the industry is still handing back much of its windfall from record oil prices to investors.

Exxon Mobil Corp., Royal Dutch Shell Plc, BP Plc and two smaller rivals upped capital spending to $29 billion in the first quarter -- and spent $20.7 billion on dividends and stock buybacks.

Hello, Reuters? The word "investors" means people who provide money productively, i.e., fully expecting to get their investment plus a profit back. They are not "donators." They also tend to be owners. If you want donations toward oil exploration, why don't you lead the way, liquidate all your assets and donate it toward the effort?

Then Reuters shows its total ignorance about economics.

Oil companies are handing cash to investors because they plan their businesses at lower prices than today's.

No, oil companies are "handing cash to investors" because that's how investments work. You invest your money into a project at some risk, then if everything goes well, you get your money back plus a profit to pay you for the time value of your money, plus a profit for taking the risk. I know the concept of profit goes against your socialist leanings, but that is how the free market works.

Then Reuters thinks they know better how to run an oil company:

Oil firms are lifting spending after years of underinvestment and rising demand helped propel crude oil's rally from below $20 a barrel at the start of 2002 to a record $123.93 on Wednesday.

Excuse me? Underinvestment?!? According to you? Oil companies have poured billions into exploration, and Reuters contradicts themselves in the very next paragraph.

Shell invested $7.6 billion in the first quarter, more than larger rival Exxon.

You don't see Reuters criticizing their Communist hero Hugo Chavez for destroying the oil production of Venezuela. You don't see Reuters criticizing former KGB honcho and Communist Putin for confiscating assets in Russia and thus smothering oil field development in that country. But if an oil company pays dividend to an investor, there's Reuters running a story about it.

Somewhere, Uncle Joe Stalin smiling.

Congressional Dog and Pony Show

Congress is going to drag the oil companies in for another dog and pony show. Just great.

Senior executives of the five largest U.S. oil companies were to appear before a congressional committee Tuesday where they were likely to find frustrated lawmakers in no mood for small talk.

"These companies are defending billions of federal subsidies ... while reaping over a hundred billion dollars in profits in just the last year alone," complained Rep. Edward Markey, D-Mass., in previewing the hearing.

The lawmakers were scheduled to hear from top executives of Exxon Mobil Corp., Shell Oil Co., BP America Inc., Chevron Corp. and ConocoPhillips, which together earned about $123 billion last year because of soaring oil and gasoline prices.

Markey, chairman of the Select Committee on Energy Independence and Global Warming, said he wants to know why, with such profits, the oil industry is steadfastly fighting to keep $18 billion in tax breaks, stretched over 10 years.

Well the first people Congress should be looking at for a cause for high oil prices is themselves. Limits on domestic oil exploration, drilling and EPA restrictions on building new refineries in the United StatesS all contribute greatly to the problem. According to my research, the last new refinery built in the U.S. was when I was in high school back in 1976. Since that time, our demand for gasoline has jumped about 40%. Approximately ten years ago, the U.S. demand for refined gasoline outgrew our ability to refine it and we have been bridging the gap via importing refined gasoline from Europe. In addition, foreign demand for oil has skyrocketed, with India and China becoming major consumers, thus pushing prices upward.

But blaming the oil companies for high gas prices is like blaming a bakery because people like their bread and bid the prices up. It won't change the situation any, but it may make for some entertaining TV, which is probably the point anyway. Democrats never seem to understand the laws of supply and demand, but they sure understand how to grandstand for the television cameras.

Back to the Future: Democrats Raise Taxes

They'll never learn, which is the hallmark of idiotic socialism. Well, I'm sure the morons at the Kult of Koslam Konvention cheered when they heard this, but consumers can expect one thing: gas prices will increase to pay for this massive tax hike on oil companies. Unless, of course, the President whips out the veto pen.

House OKs new taxes on oil companies

WASHINGTON - Declaring a new direction in energy policy, the House on Saturday approved $16 billion in taxes on oil companies, while providing billions of dollars in tax breaks and incentives for renewable energy and conservation efforts.

Republican opponents said the legislation ignored the need to produce more domestic oil, natural gas and coal. One GOP lawmaker bemoaned "the pure venom ... against the oil and gas industry."

The House passed the tax provisions by a vote of 221-189. Earlier it had approved, 241-172, a companion energy package aimed at boosting energy efficiency and expanding use of biofuels, wind power and other renewable energy sources.

"We are turning to the future," said House Speaker Nancy Pelosi.

Not a word about drilling for oil on our own soil. It's all about gouging the evil oil companies, who make less revenue than the federal government does off oil. They do the heavy lifting while the government spends nothing and collects billions in taxes.

"This will save consumers money," said Rep. Tom Udall, D-N.M., the provision's co-sponsor, maintaining utilities will have to use less high-priced natural gas.

Nonsense. The oil companies, I guarantee you, will increase prices. I'd noticed a decrease in costs at the pump in recent weeks. So much for that.

Naturally, Pelosi whipped out the "it's for the children" canard, forgetting the fact the children's parent's will be forced to pay.

"It's about our children, about our future, the world in which they live," Pelosi said.

There are still some Republicans willing to tell the truth, however.

"There's a war going on against energy from fossil fuels," said Rep. Ralph Hall, R-Texas. "I can't understand the pure venom felt against the oil and gas industry."

Rep. Joe Barton, R-Texas, said the bill was "a political exercise" to promote "pet projects, ... pet ideas." He predicted it "isn't going anywhere" because President Bush will veto it if it gets to his desk. Feel free to veto, Mr. President.

Gas Prices and the Refinery Dilemma

Refining woes, not crude, driving US fuel prices

NEW YORK (Reuters) - Record fuel prices in the midst of a U.S. oil supply glut have underscored the growing failure of domestic refiners to keep up with demand in the world's biggest energy consumer.

A crunch in spare refining capacity has left the United States vulnerable to supply disruptions from refinery accidents -- on the rise because of lingering damage from hurricanes and tough environmental regulations -- and bolstered the argument by oil cartel OPEC for keeping supply curbs in place.

As I point out repeatedly, the U.S. consumption of gasoline outgrew our capacity to refine it over 10 years ago. So there is a very thin supply margin. We bridge the gap by importing more and more refined gasoline from Europe. The future does not look very rosy either.

Refiners are also struggling to meet new greener U.S. specifications that require highly specialized processors to make fuel, analysts said.

"Having less latitude with very tight product specifications means that process glitches that would have been resolved without much trouble in the past, are causing big production losses," Jan Stuart, economist for UBS Securities LLC, said in a research note.

While no new refinery has been built in the United States since 1976, industry groups say companies have added the equivalent of a new refinery in additional capacity to existing U.S. plants each year for more than a decade.

But they warn that new U.S. government efforts to cut gasoline use by 20 percent by 2017 using renewable fuels may cause companies to scrap future expansion plans despite historic profits in recent years, tightening the refining market further."

You would not be very eager to invest hundreds of million so dollars in new refineries if the government was passing legislation to cut the consumption of your product, either.

Talk about your paradox of unintended consequences.

Breck Girl Wants to Investigate Oil Companies

Next thing you know, there will be calls to investigate slick trial lawyers and those gouging practitioners from Big Haircut.

Edwards Calls for Investigation of Oil Company Mergers, High Gas Prices

As if we don't get this demagoguery on a daily basis from unctuous nabobs such as Charles Schumer.

SAN FRANCISCO (AP) -- Democratic presidential hopeful John Edwards says a wave of mergers in the oil industry should be investigated by the Justice Department to see what impact they have had on soaring gasoline prices.

During a campaign stop in Silicon Valley Thursday, Edwards planned to berate the oil industry for "anticompetitive actions" and outline an energy plan he says would reduce oil imports "and get us on a path to be virtually petroleum-free within a generation."

"Vertically integrated companies like Exxon Mobil own every step of the production process -- from extraction to refining to sale at the pump, enabling them to foreclose competition," says an outline of Edward's energy plan.

For all their investment, oil companies don't even make 10 cents on the gallon, while the federal and state goverments rake in six times that in some cases.

How about drastically cutting or eliminating some of the taxes before we go after those who produce a commodity that is in such high demand? Heaven forbid the Democrats would ever allow for drilling in ANWR or oil companies to build more refineries. It's much easier for them to play the shameless class warfare game.

Going After Big Oil Will Backfire

As we noted last week, the Democrat plans to go after the oil industry will be harmful to the economony. In the New York Post today, Mackubin Owens says the slap at Big Oil will backfire.

The new Democratic majority in Congress has taken aim at the oil and gas industry. Speaker Nancy Pelosi has already rammed through part of her plan to "roll back the multibillion-dollar subsidies for Big Oil" through the House, with more to come; the Senate may well follow.

Democrats talk about these measures as promoting U.S. energy independence. But the clear result, should such policies become law, would be the exact opposite. By increasing the cost of domestic oil and gas production, Democrats would increase U.S. reliance on energy imports.

"Big Oil" makes a tempting target because of the mistaken belief that oil profits are unusually high. It's a widespread belief - Fox News Channel's Bill O'Reilly has railed against "oil profiteering," too - but it's wrong. Oil-industry profits are in line with those in the rest of the economy.

If the economy tanks, will Pelosi and her greedy minons take the blame? Somehow I doubt the Big Media will remember.