MOsanthrope

Posted by Chris on May 7, 2006 at 9:05 pm.

I’ve said it before: Those intricate and complex global supply and demand forces that somehow ultimately translate to higher prices at the pump really are difficult to wrap ones head around:

SACRAMENTO, Calif. - A Chevron memo is raising suspicion that oil executives intentionally reduced refining capacity in an effort to boost profits. The 1995 memo, obtained by Consumers Union, reads:

“If the U.S. petroleum industry doesn’t reduce it’s refining capacity, it will never see any substantial increase in refinery profits.”

In the last 20 years, 18 of California’s 32 refineries have shut down. The industry is now seeing record prices and profits at the pump.

I’d imagine that oil companies are too cash-strapped to increase refining capacity.

In any event, increased refinery capacity is hardly a long term solution to our nation’s current “deja vu all over again” energy crisis.

By the way, as Attaturk noted, Condoleezza Rice was a member of Chevron’s board of directors when the memo was drafted:

CONDOLEEZZA RICE, NEWLY NAMED NATIONAL SECURITY ADVISER, RESIGNS FROM CHEVRON CORPORATION’S BOARD OF DIRECTORS

SAN FRANCISCO, Jan. 16, 2001 — Condoleezza Rice, a Chevron Corp. director since 1991, resigned from the company’s board, effective Jan. 15. Rice was named President-elect George W. Bush’s national security adviser-designate.

You may recall that Chevron was so pleased with Ms. Rice’s performance that the company later named an oil tanker after her.

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