Gas prices are going to get bad in a hurry. BP shut down the oilfield because of unexpect corrosion in the pipes. The oil the goes through those pipes accounts for 8% of the US's daily usage. So, how are they going to blame Bush on this one? http://money.cnn.com/2006/08/07/news/international/oil_alaska/index.htm?cnn=yes
I'm surprised to see oil prices only jump 2% to around $76.50. I was expecting it to push $80 today when I heard that news this morning. The investors must think it'll be a short shutdown.
Can't blame Bush, but this does show what many have pointed out that in spite of record profits that big oil has done nothing to improve their infrastructure.
i have no idea how much big oil has invested into their infrastructure, but i would assume it is more than "nothing". why do you say that?
Not sure where he is coming from with that. I believe there have been no new oil refineries built in the US in nearly 30 years though.
What would you have them do? Replace all the pipe every ten years? What do you mean exactly when you say big oil has done nothing to improve their infrastucture. How often would you like them to shut down North slope production to replace pipe. How about the Gulf of Mexico? It is an unfortunate event but less oil was released than when a drunk shot a hole in it a few years back. That is also what makes it expensive to produce oil in the U.S. This happens anywhere else in the world you don't hear about it. A large group of Americans want to have it both ways. They were actually in the process of inspecting and repairing when the leak was found.
Oil companies pump about 5 million barrels a day in the U.S. I'd be willing to bet they spend a small fortune making sure their infrastructure is pretty sound. Nobody is perfect, but in that industry, they better be damn near close to perfect or there will be a huge price to pay. At least they caught this problem before there was a significant leak...
They failed to inspect the pipe since 1992! And they only made this inspection because the government regulators forced them to. They had a major spill from this pipeline just last year. They can damn well make inspections every year with the windfall profits they are making. And Grad is correct. Part of the gas shortage problem is that we have insufficient refinery capacity in this country and the oil companies have not built a new refinery since 1975. All of the problems of high oil prices from overseas is bad enough, but now we can't get 400,000 barrels a day of our own oil because of oil company negligence.
There have been many attempts by "new" companies to enter the market and build new refineries. Coporate and government roadblocks have put a halt to all of them though. Not only that, many of the old refineries have closed. I believe we had over 300 refineries in the early 80's and today we are down to around 150 refineries. Many of those that closed were small refineries, but daily production has still gone down by a couple of million barrels a day since the early 80's.
