We can beat them… for ever and ever – David Bowie
Not – LI
As we have tried to make abundantly abundantly clear on this blog, we consider the terms in which politics is ‘seriously’ discussed in the U.S. to be laughable. We especially find laughable that there is some primal difference between public entities like the South Dakota Department of Education and private entities like Exxon. There is not now, there has not been, and there never will be a primal difference of that kind. To consider how that clown show called libertarianism bases itself on this fallacious fault line makes the observer of the American scene almost despair. Just as cultures have their special cuisines, they have their special stupidities. This is the Ur American one. You can talk until you are blue in the face, but the next thing you know, someone will be dreaming of how we can all set up a magic kingdom in which the state is shrunk like a pair of panties gone through the hot cycle while the private domain blossoms and grows and is full of hippety hop nursery animals.
Well, in this kingdom of the blind, you don’t even have to be one eyed to be king – you simply have to blink every once in a while.
The press, gaudily touting itself as the fourth arm of the government, at least presents an accidental truth. Indeed, the press operates, mostly, as a lubricating agent to ensure the smooth expropriation of a nation’s wealth into the pockets of those who deserve it least and who, entrenched behind that vast architecture of legalized crime called the financial market, gain the most. I suppose in this system, the surprise is that one gets any honest reporting, rather than the opposite. Still, we were amused that the NYT, fresh from its awestruck coverage of the scholarly depths and breadth of the CEO set, had the audacity to publish a sort of crib sheet from the Exxon PR department by Jad Mouawad entitled,
Some critics of the industry have theorized on Internet blogs that the squeeze on gasoline and other refined products points to a deliberate effort among oil companies to bolster profits by keeping supplies tight. But experts point out that the companies have little incentive right now to hold back on fuel supplies.
“Every refinery would like to run as much crude as possible but they simply can’t,” said David Greely, senior energy economist at Goldman Sachs, who in a recent report compared the drop in domestic refining with an “invisible hurricane.” “These are more complex systems. There are more chances for things to go wrong. And when things go wrong, they tend to back up the system.”
Notice, of course, that Mouawad not only quotes a Goldman Sachs guy against those unnamed internet bloggers (as opposed to the bongo drumming bloggers), but that he is so certain that the incentives that the internet bloggers don’t understand exist that, uh, he doesn’t tell us what they are. They just are. I mean can't you trust a guy who says that the refiners want to produce more gasoline? If you can't take him at his word, well, feelings get hurt. This is what those barbaric internet bloggers don't understand, but Jad understands so well. Surely, during the interview, David Greely started crying big buttery tears, just like the Walrus, and our friend Jad, just like the carpenter, lent him his big checked handkerchief. Salt tears mingled, no doubt, with a lunchy Terrine De Foies De Volaille appetizer. I hope those internet bloggers are truly ashamed of themselves. Really! Ruining an appetizer like that. The internet blogger argument is so mean, and cruel, that Jad and his buddy aren't even going to honor it by giving a counter argument. In this way, those internet bloggers are proven decisively wrong.
The article is so riven with baloney, lies, half truths and half wittedness that we just get tired thinking about it. Still, for some facts about the oil industry go to this blog, (an Internet blog! my god!) which takes out a pocket knife and picks the article to pieces pretty quickly.
Jack Kupransky makes a pretty obvious point. First, he quotes the NYT:
As a whole, refining disruptions have been considerably higher than in previous years: they averaged 1.5 million barrels a day in the first quarter, compared with 700,000 to 900,000 barrels a day from 2001 to 2005. In the days after the hurricanes, refiners were forced to briefly halt as many as five million barrels of production.
Then, unlike the gods and heros that inhabit Goldman Sacks, he actually does some simple arithmetic:
To anybody who knows nothing about the business, a shortfall of "1.5 million barrels a day" in refining capacity might sound like a really big deal, except for the fact that available inventory levels of retail gasoline (as reported weekly by the Department of Energy's Energy Information Administration (EIA) having been running consistently above 200 million barrels for this entire period, way more than enough to cover even a 1.5 million barrel a day shortfall. If inventories weren't able to cover the shortfall, we would see inventories declining dramatically over time. Yes, inventories are 4.5% below a year ago (but only by a mere 9.5 million barrels), but that further proves that refinery shortfalls are not causing inventories to be drawn down in a dramatic way. Multiply 1.5 million per day by 90 days and you get 135 million barrels. The EIA data proves that gasoline inventories have not been depleted by 135 million barrels. In other words, the loss of production due to outages did not result in a shortfall of available gasoline. In other words, there was no supply shortage.”
So, why did the NYT chose to publish this laughable piece of pro oil company propaganda? The shoe drops at the end of the article, with a nice instance of quote marks to make us realize that only internet bloggers and real yahoos would ever question OIL:
“But with a third summer of high gasoline prices, lawmakers are debating legislation they claim would punish oil companies for exploiting the tight supply situation and engaging in “price gouging.” At the same time, they are pressing refiners to produce more fuel.”
Price gouging. My god, how twentieth century, along with usury laws and the like. Those fucking legislators should know better, and – in fact – they do. They will make noise. They will do nothing. The machine, the public/private machine, will work smoothly. Ain’t that sweet – sweet as sweet crude!