IT’S DISTURBING that Business Editor Drew Voros is so biased in favor of the petroleum industry.
In two recent columns, Voros bemoans Chevron’s veiled threats to close the Richmond oil refinery. He repeatedly blames the city of Richmond and environmentalists, but he ignores numerous facts that put the responsibility squarely on Chevron and the oil industry in general.
# Chevron repeatedly stated that it had no plans to refine heavier or dirtier crude oil in Richmond, even though its planned retrofit would allow it to do just that. For example, on March 5, 2008, refinery spokeswoman Camille Priselac said, “The refinery is going to continue using the same types of crude and the same amount of crude.” But when pressed to make these commitments legally binding, Chevron refused.
Indeed, Voros admits that Chevron’s actual plans were quite different, saying that the retrofit “… would have enabled it to process a larger variety of crude oil. “…”
# Those living near the Chevron refinery have some of the highest rates of breast cancer and hospitalization due to asthma attacks in the state, among other health issues linked to the refinery. Yet Voros utterly fails to factor in (or even acknowledge) those costs.
Voros implies that environmental groups have stymied Chevron’s attempts to improve this situation via retrofitting, but the truth is Chevron’s
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plan could make emissions even worse once dirtier/heavier crude and increased production are factored in.
# Voros points to the reduction in the number of oil refineries in the United States (a 57 percent drop since 1981, according to his figures) as some sort of national tragedy. But, in fact, the Department of Energy states that “U.S. refining capacity “… has appeared relatively stable in recent years, at about 16 million barrels per day of operable capacity.”
It is also extremely misleading that Voros chose 1981 as his baseline for the number of U.S. oil refineries. That’s because small, inefficient refineries were only economically viable while receiving subsidies under the federal price-control system that ended in — you guessed it — 1981. Once the subsidies went away, so did those small refineries.
Another factor reducing the number of refineries were the massive mergers within the oil industry (Exxon and Mobil in 1999, BP Amoco and ARCO in 2000, Chevron and Texaco in 2001, Phillips and Conoco in 2002). Not only did this reduce competition, it allowed some companies to exploit their strong market position to drive smaller, independent refiners out of business.
# Voros then uses scare tactics, claiming that gas prices will rise at least 20 percent in California if the Richmond refinery closes, while noting that closing refineries “is the easiest way to improve industry profit margins.” His overriding message seems to be that Chevron must be appeased at all costs.
Yet by most accounts, the refinery is still profitable and will be for many years. A big reason for this profitability is because California requires specially blended low-emission gasoline — a connection that Voros misses entirely because he’s too busy complaining that “we pay more for gas than anywhere in the country.”
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Source: insidebayarea.com
