Peak Oil News and Message Boards

mcgowanjm wrote:Along with Shale Gas-no regs there either.

The response to slumping gasoline use would probably mean higher prices for drivers. Consumer advocates want regulators to examine the firms' plans.
Some of the nation's biggest oil companies are looking at permanently reducing how much gasoline and diesel fuel they make, a move that analysts say would almost certainly trigger higher prices for drivers.

Energy companies are suffering huge losses from refining because of slumping gasoline use -- a product of the economic downturn and changing consumer habits and preferences. Energy experts say refining cutbacks have begun and will accelerate as corporations strive for profits.
Major refiners have been circumspect about their plans, saying that they are considering options that could include closing refineries, selling parts of their operations, laying off workers and slashing spending.

"Refineries will have to be closed," said Fadel Gheit, senior energy analyst with Oppenheimer & Co. "Unless this excess capacity is permanently shuttered, a recovery in refining margins is unsustainable."

This week Chevron Corp. launched an overhaul of its fuel-making and retailing business with a plan to cut at least 2,000 jobs, put a refinery in Wales up for sale and take a hard look at its Hawaii refinery.

Royal Dutch Shell said it was reviewing its refinery operations with the idea of keeping only those with the best growth potential. Sunoco Inc. has sold one plant and said last month that its previously idled Eagle Point, N.J., refinery was being shut down permanently.

Valero Energy Corp., the nation's largest refiner, last year closed a Delaware refinery, laying off 500 workers, and mothballed a plant in Aruba.

eXpat wrote: Consumer advocates want regulators to examine the firms' plans.

pup55 wrote:Two of these transactions are pretty major: Marathon Oil and Conoco Phillips have both spun off their refining groups into separate companies, treating their shareholders to a little dividend, and most importantly, getting them off of the books when times are unusually good because they know the current situation is only sustainable as long as the brent/WTI spread is what it is.

U.S. refinery workers and energy companies on Tuesday raced against a midnight deadline to negotiate a contract and avert the sector's first strike in more than three decades, which could shut 6 percent of U.S. refining capacity and boost fuel prices.

A strike could boost prices for gasoline, jet fuel, and other refined products at a time when crude oil prices above $100 a barrel have been a drag on the global economy. Ahead of the 12:01 a.m. Wednesday expiration of the current three-year contract, both sides remained at loggerheads in talks on wage standards, healthcare, retirement benefits, and health and safety standards.

The last nationwide strike by refinery workers was in 1980 and lasted three months. The United Steelworkers (USW) union, which represents hourly workers at refineries that account for about two-thirds of U.S. refining capacity, says health and safety standards remain the main obstacle to a deal.

"A strike would be potentially supportive for products and less so for crude," said Tom Bentz, director at BNP Paribas Prime Brokerage Inc. in New York. Other analysts said sagging U.S. fuel demand could offset potential supply impacts. Any shutdowns would likely drive up U.S. fuel prices, supported in recent weeks due to a string of plant problems, especially along the U.S. East Coast where poor economics have prompted companies to shutter refineries. Most U.S. refiners have made preparations to bring in contract workers and train replacements to keep their refineries churning in the event of a strike.

"Negotiations continue," said Emily Oberton, a spokeswoman for Shell, which faces potential strikes at refineries in Texas, Louisiana, Alabama, California that comprise about 1.2 million barrels of processing capacity. "Shell remains optimistic that a mutually satisfactory agreement can be negotiated with the USW."

While most refiners would keep their plants in operation during a strike using temporary replacement workers, just over a million barrels of capacity would be taken offline by companies in the event of a shutdown.

The United Steelworkers union and Shell Oil have as announced a tentative deal on a new three-year contract covering Shell refinery workers across the United States. The deal was announced in statements issued by the two sides Tuesday night, hours before a midnight Tuesday deadline to reach a new agreement or risk a strike.

The deal also will be used as the model for other refiners such as Exxon Mobil, Marathon, Valero and ConocoPhillips to match.