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Big Fat Oil [May. 16th, 2008|07:59 am]
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Courtesy of Spin the Cat:



 Mom-and-pop service stations are running into a problem as gasoline marches toward $4 a gallon: Thousands of old-fashioned pumps can’t register more than $3.99 on their spinning mechanical dials.

The pumps, throwbacks to a bygone era on the American road, are difficult and expensive to upgrade, and replacing them is often out of the question for station owners who are still just scraping by.

Many of the same pumps can only count up to $99.99 for the total sale, preventing owners of some SUVs, vans, trucks and tractor-trailers to fill their tanks all the way.

As many as 8,500 of the nation’s 170,000 service stations have old-style meters that need to be fixed — about 17,000 individual pumps, said Bob Renkes, executive vice president of the Petroleum Equipment Institute of Tulsa, Okla.


One would think, that the record windfall profits recorded Big Oil, they'd be willing to throw a few crumbs to the stations owners to get newer pumps. These stations are, after all, selling their gasoline.

C'mon, whaddaya say, Shell, BP, Exxon-Mobil, and Chevron? Wanna pony up .00000000001% of your enormous windfall profits and help out the people who are just barely eking out a living peddling your product? Oh, wait, I forgot: your unmitigated corporate greed dictates that you only spend money on worthless advertising campaigns paying lip-service to how you're all "going green," which we all know is a huge lie, since your lobbyists are, at this very moment, scheming new and exciting ways to coerce Congress to allow you to drill in the Alaskan wildlife zones. Theiving hypocrites.

This is insane. I'ts kind of like having to take a job at McDonalds and being forced to buy your own uniform.

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Comments:
[User Picture]From: [info]_ironcat_
2008-05-16 06:09 pm (UTC)

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Actually it's more like you choosing to open a restaurant and sell McDonald's hamburgers and they have the audactity to make you use your own grill to cook them... nope you can't make more than 12 burgers at a time.

Wanna make more burgers and sell them to more people for more money?
Suck it up and buy a bigger stove.
[User Picture]From: [info]spc476
2008-05-16 08:48 pm (UTC)

(Link)

Some inconvenient facts about oil production:

  1. Crude oil needs to be refined before it can be used for gas (or other petroleum based products). This happens at a refinery. Our supply of refineries was reduced in 2005, thus restricting the amount of gas. If demand stays the same, yet supply drops, Econ 101 says, “price goes up.” You can thank Katrina for that.
  2. Further more, no new refineries have been built since 1976 (that's thirty-two years), thus artificially restricting (now) the amount of gas that can be refined. You can thank NIMBYism and tighter environmental controls for this one.
  3. There are different gas formulations for summer and winter months. A refinery needs to be re-tuned (for lack of a better term) for this, and that takes a few weeks, during which that refinery is not refining gas, thus lowering the gas capacity even more (see points 1 & 2). Again, you can thank tighter environmental controls for this.
  4. To make matters even worse, different regions in the United States require different formulations. So Exxon, seeing a shortage of gas in California, just can't ship excess gas it has in, say, Texas, to California, since the formulations are different, and also, it would be illegal. Again, those tight environmental controls are to blame for this.
  5. But demand is going up. And not just here in the US. China and India are booming and they want gas too. Demand goes up, supply stays the same, and Econ 101 says “price goes up.”
  6. There's also an unstable supply of oil. And forget the Middle East for a second; Venezuela and Nigeria (both huge oil suppliers) are cratering due to internal government problems which is decreasing the supply of oil (see points 1 & 5).
  7. To tie into point 6, Venezuela, Nigeria as well as the entire Middle East, have put zero money into maintaining their oil infrastructure, thus even if they wanted and could pump more oil, they can't, since the infrastructure is falling apart (now who's greedy?).
  8. Oh, did I mention the cratering US dollar? It's not necessarily that oil costs more, it's just that our dollar is worth less (our monetary supply has increased something like six-fold since 2000, and an increase of the money supply causes inflation).
  9. There's also a difference between gross and net profit.

But you want to know what I'm really upset over? Government subsidies to oil companies to keep the price artificially low. And no, I'm not talking about Venezuela here, but the Good Ol' Yew Es of Ay™.

From: (Anonymous)
2008-05-17 03:32 pm (UTC)

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Actually many jobs do require you to buy your own uniform. Regarding the oil companies, they are not to blame for the gasoline prices; we are. We have had ample time to prevent our dependency on foreign oil and we did not. So, since we want it so much, we are paying the price for it. Free enterprise and market demand at its finest.
[User Picture]From: [info]corsair2
2008-05-17 07:50 pm (UTC)

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You are missing my point ENTIRELY. My point is that the oil companies are making BILLIONS of dollars in profit selling their product to the resellers and the resellers are just barely eking out a living selling that product. Surely a company that has made record profits year after year after year would have some kind of program in place to modernize their means of distribution.

It might surprise you that the resellers of gasoline actually make little profit on the actual sale of that gasoline. Their profit comes almost exclusively from the other stuff they sell in their convenience stores.

There is something very wrong with the system--either the oil companies must own the stations outright or they need to help the station owners modernize.
[User Picture]From: [info]bunny42
2008-05-17 09:17 pm (UTC)

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Says who? You think the station franchisees don't know what they're getting into from the get-go? If they're willing to deal with it, then more power to them. Some stations ARE owned by the oil companies, but many more are not. As Anonymous pointed out, that's free enterprise and market demand. If we'd started drilling our own vast resources ten years ago, instead of saying oh, that'd take at least ten years to show any results, we would now be way less dependent on foreign oil than we are now. Same goes for nuclear power. Our environmentalist wackos friends think nuclear power is too dangerous. Tell that to France. And I'm sure sorry Mr. Carey doesn't want windmills to mess up his view of the horizon off Cape Cod.

My point is, there are other ways to deal with the problem than blaming "Big Oil." If an existing franchise is making money for the oil company, and if having outdated pumps affects that profit, you can bet the oil companies will step in. Everywhere I go, I see stations modernizing and putting in new equipment, my usual Mobil station at Hillsboro Blvd. being a prime example. The other day, I made a special trip there, only to find it closed for remodeling.
[User Picture]From: [info]bunny42
2008-05-17 09:20 pm (UTC)

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Oops. Seems I got the wrong guy. Meant Mr. Kerry, as in former Presidential candidate. I get those two mixed up.
From: (Anonymous)
2008-05-18 02:59 am (UTC)

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It might surprise you to know it does not surprise me at all. I used to know a gas station owner and he complained about this for years. But let me ask you something. If you are making billions in record profits are you going to be motivated to help out your retailers? That being, if you are purely a profit-driven entity and not one prone to charity or goodwill. Also, should the end user retailer really make much profit in comparison to the manufacturer? It might surprise you to know that in many industries the guys who are the middlemen (distribution) and retailer (to the end user) make the largest profit margins while the manufacturer does not. Considering the manufacturer actually produces something that provide a tangible asset to the American public, versus entities who merely stand between you and the manufacturer and offer nothing to the product itself, should the gas stating really be making that much profit? Should the car salesman make the big profit or should the auto manufacturer? Who provides more to our GNP, assuming both are located in America? If a gas station wants to modernize his facility as a means to provide better service to his customers and/or increase his net income, then he should do so. If a 3rd party retailer sells computers but their store is a dump, should Dell/IBM/Apple/etc. pay to fix it up?