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Old 01-27-2010, 02:48 PM
Location: Houston, TX
17,031 posts, read 27,345,288 times
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[SIZE=4]Contra Costa Times, Walnut Creek, Calif., Drew Voros column: Voros: No political will to keep oil refineries in America
[SIZE=2]Source: Contra Costa Times (Walnut Creek, Calif.)
Publication date: 2010-01-27

[SIZE=2]By Drew Voros, Contra Costa Times, Walnut Creek, Calif.

Jan. 27--You probably haven't noticed, but during the past 30 years, America has seen more than half of its oil refineries shut down. It's OK. Our political leaders haven't noticed either. In 1981, there were 324 operable refineries. Today, there are fewer than 140 refineries, with three new closures in 2009.
Unlike the auto industry, where there is an obvious and taxpayer-funded will to keep factories in this country open, we are allowing oil refineries to close without a fight. A few decades down the road, most of our oil will be refined in foreign countries, similar to the way steel factories were sent overseas.
As drivers in the Bay Area, we must purchase gasoline blended to meet California's strict environmental standards. That's also the reason we pay more for gas than anywhere else in the country, plain and simple.
For the most part, that gasoline is produced by five local refineries: Chevron's 108-year-old Richmond refinery, Shell's Golden Eagle and Tesoro refineries in Martinez, the ConocoPhillips refinery in Rodeo, and Valero's Benicia refinery.
Wholesale prices for this fuel are set on the New York Mercantile Exchange, and those prices are influenced by international, national and, more important, regional conditions.
Now imagine taking out one of those five refineries and lowering the supply by roughly 20 percent permanently. Simple economics would say that prices would rise 20 percent, at least, in a
best-case scenario. Spread a 20 percent increase in Bay Area gas prices around and see how much that sucks out of the local economy. And don't figure it annually -- that would minimize the impact of Chevron closing down its Richmond refinery.
Last week, Chevron announced plans to downsize its refinery operations worldwide by laying off employees and even exiting some markets. Details are coming in March.
While I do not have inside information that the San Ramon oil giant has concrete plans to close Richmond, simple extrapolation of the facts would tell you it's a matter of time. If not in March, certainly in the coming years. Obsolete facilities have no place in an efficient, profitable oil company.
Last summer, Chevron embarked on a reported $1 billion retrofit project of the 1,250-worker Richmond facility, which -- oh, by the way -- contracted out an army of 1,000 local ironworkers. Just as the welding torches got hot, a court ruling backed by the Richmond city officials and environmentalists halted the $1 billion project.
The goal was to make the antiquated facility a state-of-the art refinery capable of processing nearly all blends of crude oil. Today, the Richmond refinery is restricted to processing light crude, the staple of Middle East oil markets, which also contributes to our high price of gas.
There's not a single political leader talking about the evaporation of refineries in America. Richmond is a microcosm, where political forces are trying to remove a source of pollution that also is responsible for 30 percent of the city's budget.
Refineries are treated as pariahs rather than important economic engines. By erecting environmental barriers to making facilities more efficient and competitive, we have opened the door for their departure without thinking about the consequences to consumers and tax bases.
Drew Voros is the business editor. His column runs on Wednesdays. He can be reached at avoros@bayareanewsgroup.com. Follow him at Drew Voros (bizeditor) on Twitter.
To see more of the Contra Costa Times, or to subscribe to the newspaper, go to Home - ContraCostaTimes.com.
Copyright (c) 2010, Contra Costa Times, Walnut Creek, Calif.
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. NYSE:CVX, NASDAQ-OTCBB:MYNG, NYSE:TSO,
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Old 01-27-2010, 05:10 PM
26,859 posts, read 53,699,711 times
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It's a sign of the times.... so many large employers have been sent a packing due to not being able to modernize...

A couple of big examples in the News:

Bay Area Oil Refineries

NUMMI Toyota in Fremont

Gaylord Industries Pulp and Paper Mill in Antioch

What gets me is city council meetings are full of talk about attracting business and either do nothing or act hostile to the business that is here Many are actually happy business is leaving and only wish it was sooner rather then later.

So many small Mom and Pop Machine Shops and Manufacturing Business has left the East Bay... many as a result of big players leaving... like Kelloggs, Crown Zellerbach and Caterpillar in San Leandro...
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Old 01-27-2010, 11:40 PM
1,650 posts, read 3,169,293 times
Reputation: 1123
Long live nutty environmentalism! Only if CA starts using the same gas as rest of the country does the whole problem will be solved.
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