Liberals, simple economics and business question for you?

Question

In an industry,

1. You have a product that needs refining. The government has refused to allow you to build a new refinery in 30 years.

2. Your refineries are at almost peak capacity. There is little room for additional refining, especially when we are entering the peak demand season.

3. Instead of having one standard, there is a different one for each state and then some. You have to accommodate each blend, instead of having all your refining be of one blend.

What happens if one or two refineries, already at peak usage, goes down?

First of all, conservatives have not been power at all in 30 years.

Republicans were in control, but there were not a majority of just conservatives. There have been enough non-conservative Republicans to block a lot of this.

I also challenge anyone who throws an insult my way to open their email communication. You want to try and call me out, let us email over it.

You all assume that I am referring to gas. I simply put out an economic scenario and asked liberals what would happen. Try answering the question as is, no assumptions.

Answer 1

What Demwits cannot understand is profit. They have no concept of net from operations, or EBITDA, therefore they believe a billion dollar profit is excessive, regardless of revenue,

simple economics do not work on socialists, they are anti-capitalists, and until the state owns the means of production they will not be happy, of course if they are not in the ruling elite when the states owns the means of production they are not going to be happy anyway.

keep in mind just because you are a "useful idiot" who supports socialism today, does not guarantee you a seat on the proletariat.

Answer 2

Take the one that goes down and ream it out to increase capacity. EPA regulations will let it fall under the original guidelines it was built under as long as they do not tear it down and totally rebuild it. It will be 'grandfathered' to the old guidelines.
The refineries may be a almost peak capacity but, I can promise you the maintenance is kept up and other than a pump, a meter, a capillary tube, a transmitter or other minor mechanical parts causing temporary downtime, nothing much else barring an explosion will put a refinery down. The minor mechanical parts are kept up and serviced. If they were not, those 30 year old pumps belong in a record book somewhere.

Answer 3

Simple, if total manufacturing capacity goes down (supply drops) and demand goes up, adding in the different blends needed to fulfill different standards that each state requires, prices will rise. I'm not blaming Bush, but honestly the oil companies are making record-shattering profits and they still do get subsidies (corporate welfare) from the government. They don't need to jack up prices like this.

The government has refused to allow you to build a new refinery in 30 years.
-From 1994-2006, conservatives were in power, you guys had the numbers to overturn any sort of ban. You could have easily overpowered the environmental leftists.

What we should do is start investing in new nuclear power plants(The ones we have now only contribute less than 20% of our total production of energy and new ones haven't been built in over 30 years); they are cheaper, cleaner, more productive, and yes, safer than fossil fuel production. (How many people die in coal mining accidents every year?)

Answer 4

You are asking a what if to a scenario that doesn't exist. I just saw an oil exec the other day on television saying we still haven't recovered from Katrina and we were well below capacity and didn't see us getting there any time soon. Don't you notice that every time things seem to be running smoothly something happens, like an oil pipeline shutdown by BP, or spring maintenance for refineries, or the sands shifted in Iraq? I'm sure the oil companies are just lined up waiting to build new refineries and in thirty years haven't managed to get what they wanted in that one area, yet they get everything else they want, even millions in tax breaks while they make billions in profits. The republicans controlled congress for eleven years and all of government for the past six, why didn't they do anything to address the problem? Any other facts you have to share?

Answer 5

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you put a "Closed for Maintenance" sign on the front gate, close it up, lock everything down, and go home happy that in less than 30 days your profit margin is going to skyrocket.
you blame the higher gas prices on environmentalists, instead of actually calling the contracters to fix the things, because there is no economic incentive to invest millions just to lower your profit margin.

Answer 6

The oil companies will end up making higher profits.

Government hasn't been preventing oil companies from building new refineries. They are doing it themselves to keep up demand and thus prices. They'd rather refine less gasoline and sell it at a higher price. Who wouldn't want to sell less and make more money.

Their new excuse is ethanol. They are saying they are holding off building new refining capacity because with the push to ethanol, the demand for gas will decrease.

For what other commodity is a decrease in demand accompanied by an increase in price? It's ridiculous.

Answer 7

quarterly loss? you didn't mention how long the facility was down. i'm assuming a couple of days. also, you didn't state what the product is. high call demands differ from product to product. on what scale? milk plant goes down for a week their books probably won't skip a beat. a shell oil refinery goes down for a week there will be a loss on the books as well as high pump prices.

Answer 8

Republicans were in the majority for the
last 6+ years and nothing was done...
and this is ...the liberals fault?

Yeah...your a Republican all right...
No matter what the situation is...
Blame the Liberals!!!
Pathetic Party the GOP is!

Answer 9

Well the answer would be to blame the Liberals despite conservatives having been in power for most of that 30years I suppose.

Answer 10

Why don't you ask the "do-nothing" Republican Congress of the last 6 years that question.