Ignorance Is Expensive & Bad Journalism Runs Up the Tab
The MSM's conspiratorial reflexes when it comes to covering the energy industry and energy markets is an endless source of damage to our society. Check out this "analysis" that states that oil companies manipulate supplies to drive up prices. This "analysis" reveals total and utter ignorance of how the oil industry works. Just check out this sentence as a teaser:
"Shell portrayed its Bakersfield refinery as old and unfit. To make up for older wells, oil companies regularly drill new ones — about 9,800 last year."
What on earth? A refinery and a well are not the same thing, you can't replace or upgrade a refinery with a well, as the writer suggests. This confusion permeates the article.
The truth is that this refinery was built 70 years ago when the wells that supply it were drilled. After 70 years of producing those wells are running dry. California currently is probably the least hospitable place in the world from a regulatory view to drill for oil, contrary to how it was 70 years ago. It is effectively impossible to drill in California, so new local supply wells for this refinery are out of the question. To get crude oil to this facility, they'd have to bring it in by truck or rail, which is way too expensive to do. No crude to refine, no refinery. Pretty simple.
There are numerous other laugh-riot mistakes in the "analysis" but, hey, it's a good story. Oh, and they conveniently left out that the Federal Trade Commission investigated the refinery closing for any anti-trust claim and found no basis. Read it here.
If we continue to be ignorant about energy and pig-headedly stick to crazy conspiracy theories, we deserve what we get, which likely will be high energy prices, perhaps shortages, and increased reliance on foreign sources for our energy. Ask the Ukrainians how that is working out.
"Shell portrayed its Bakersfield refinery as old and unfit. To make up for older wells, oil companies regularly drill new ones — about 9,800 last year."
What on earth? A refinery and a well are not the same thing, you can't replace or upgrade a refinery with a well, as the writer suggests. This confusion permeates the article.
The truth is that this refinery was built 70 years ago when the wells that supply it were drilled. After 70 years of producing those wells are running dry. California currently is probably the least hospitable place in the world from a regulatory view to drill for oil, contrary to how it was 70 years ago. It is effectively impossible to drill in California, so new local supply wells for this refinery are out of the question. To get crude oil to this facility, they'd have to bring it in by truck or rail, which is way too expensive to do. No crude to refine, no refinery. Pretty simple.
There are numerous other laugh-riot mistakes in the "analysis" but, hey, it's a good story. Oh, and they conveniently left out that the Federal Trade Commission investigated the refinery closing for any anti-trust claim and found no basis. Read it here.
If we continue to be ignorant about energy and pig-headedly stick to crazy conspiracy theories, we deserve what we get, which likely will be high energy prices, perhaps shortages, and increased reliance on foreign sources for our energy. Ask the Ukrainians how that is working out.
posted by Donny Baseball at 5:35 PM
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