CONGRESS HAS QUESTIONS FOR REFINERS

Others have made this same point. See OPEC SAYS BLAME REFINERS and NOT FINE AT REFINERIES

US GAO to study refining capacity, gasoline prices
Nick Snow, September 26, 2007 (Oil & Gas Journal)

WHO
The US Government Accountability Office (GAO) (Comptroller General David A. Walker, Gloria L. Jarmon, managing director congressional relations); Sen. Charles E. Schumer (D-NY); Connecticut (Conn) congressional delegation (Rep. Joseph Courtney (D-Conn.), Sens. Christopher Dodd (D) and Joseph I. Lieberman (I); Democratic Reps. Rosa L. DeLauro, John B. Larson and Christopher S. Murphy; and Republican Rep. Christopher Shays); The National Petrochemical & Refiners Association (NPRA) (Executive Vice-Pres. Charles T. Drevna)

Refinery utilization was down at the beginning of 2007 and remained down through the summer. Why? (click to enlarge)

WHAT
In response to congressional requests, the GAO will study the performance of US refineries as it might have impacted gasoline price fluctuations.

WHEN
The Conn delegation request was made May 18. Schumer’s request was in mid-May.
The GAO replied in the affirmative September 24. The investigation will begin later this fall.

WHERE
The investigation would pertain to US refineries and done by GAO staff in Washington, D.C.

WHY
- 2 requests were made for the GAO investigation, one from Schumer and one from the Conn delegation.
- The elected representatives were dubious that refinery maintenance, which was blamed for soaring gas prices this past summer, was necessary and proper. They expressed the concern that the refineries may have elected to take their facilities out of service and do the maintenance as a way of driving up prices.
- An oil refining industry spokesman denied the politicians’ charges. They contend the maintenance was necessary and unavoidable and argue that unscheduled maintenance and diminished output costs them, too.

Gas prices continue to be what they have been.

QUOTES
- Conn delegation May 24 letter: "…a calculated decrease in refining capacity could create an artificial shortage and drive up the cost to consumers."
- Courtney, for Conn delegation: "Our nation's refiners have operated with little oversight for decades and have suffered little recourse for repeated outages and downtime…This GAO study may help to spur the necessary oversight to stabilize the oil and gas refining industry and prices."
- Drevna, NPRA: "Domestic refiners are some of the most highly regulated businesses in the country. Report after report has proven that price manipulation does not occur…Economists and national editorial pages have even warned Congress against passing so-called 'price gouging' legislation… The American public could be far better served if its elected officials would work with businesses instead of against them to craft a sensible and realistic energy policy to protect consumers by keeping supplies stable…"