House passes Oil Industry Giveaway

[Thanatoast]

link (http://wap.oa.yahoo.com/raw?dp=rssnews&u=ap/20051007/ap_on_go_co/katrina_energy&rn=topstories) WASHINGTON - The House voted to encourage U.S. oil companies to build new refineries Friday in a raucous roll call that Republican leaders extended 40 minutes while they buttonholed their own members to avoid an embarrassing defeat.

Democrats crying "shame, shame" -- and some GOP moderates -- called the bill a sop to rich oil companies that would do nothing to ease energy costs including expected soaring heating bills this winter.

The bill would streamline government permits for refineries, open federal lands including closed military bases for future refinery construction and limit the number of gasoline blends refiners have to produce, eliminating many blends now designed to reduce air pollution.

President Bush welcomed the vote. "I commend the House for passing legislation that would increase our refining capacity and help address the cost of gasoline, diesel fuels, and jet fuels," he said in a statement.

The legislation, which now goes to the Senate, passed 212-210, but not before a standoff on the House floor. Rep. Henry Waxman, D-Calif., asked at one point, "Is this the House of a Banana Republic."

It looked as if the bill was going down to defeat, two votes shy of approval. Democrats to no avail called for gaveling the vote closed as GOP leaders lobbied their own members to switch votes and support the bill.

more...
Could the Republican leadership possibly be any more embarrisingly corrupt?

[broken_keyboard]

The bill would streamline government permits for refineries, open federal lands including closed military bases for future refinery construction and limit the number of gasoline blends refiners have to produce, eliminating many blends now designed to reduce air pollution.

Well, that's hardly a giveaway, that's just getting out of their way.

When I read the thread title I thought they had given massive cash payouts or some such, which would have been disgusting.

[toontra]

Well, that's hardly a giveaway, that's just getting out of their way.

"eliminating many blends now designed to reduce air pollution."

Getting out of the way of taking any responsibility for the environment, more like!

[broken_keyboard]

In this record year of Profits for the Oil Industry

Until normal circumstances, excess profits cause an increase in supply, and the price goes back down.

But of course the supply can't increase if there's all these environmental regulations.

[pseudobrit]

Until normal circumstances, excess profits cause an increase in supply, and the price goes back down.

But of course the supply can't increase if there's all these environmental regulations.

Or if the supply is finite and running out.

Regulations have bugger-all to do with the refineries not being built. It's the same reason nuclear power plants aren't being built: there's little profit to be had and the future of the market is grim.

They're the proverbial buggy-whip manufacturers.

[mactastic]

What incentive is there to build a refinery? Profits are already sky high without that additional capital expenditure. It's still very possible to find a refinery site -- they managed to find a place to bury nu-cu-lar waste. You're telling me they can find that site despite all the environmental regulations, yet the best and brightest the oil industry has to offer can't find a refinery site? Methinks the oil industry doth protest to much.

They're flush with cash and high friends in places willing to bend any rule they want (as evidenced by this and many other industry-friendly policies of this administration) and yet they somehow can't get their poor poor refinery built. I don't buy it.

[Blue Velvet]

But of course the supply can't increase if there's all these environmental regulations.


Pesky red tape.

After all, it's only about the air that you breathe, the water you drink, the soil where your food grows... all expendable, right?

[Sun Baked]

Pesky red tape.

After all, it's only about the air that you breathe, the water you drink, the soil where your food grows... all expendable, right?The red tape is a nightmare right now, who would really want to spend YEARS taking a shell company through the process for just the permit for the refinery.

Might as well look at the process for a nuclear power plant, might be easier -- and probably only take 10 years.

Then there is the oil pipeline, power lines, and refined product depots and pipelines to get easements and permits for.

Not that a refinery with a shortcut will pollute any more or be any less safe, just quicker to build.

Plus some of these military bases are superfund sites, much easier to clean them up for a future superfund site -- than a Wallyworld or Megamall. ;)

---

There is a permitted refinery project set up for Yuma, AZ -- but it was starting to look like another fantasy project getting ready to fail.

This may actually get the project rolling again and supply Phoenix and S CA with some refined produts by 2010 using Mexican Oil.

[IJ Reilly]

What incentive is there to build a refinery? Profits are already sky high without that additional capital expenditure.

Exactly. The industry has made a collective decision to avoid the risk associated with investing in more refineries. And as you say, why should they take that financial risk, when they can make as much if not more by producing less and allowing the price to go higher?

[IJ Reilly]

The red tape is a nightmare right now, who would really want to spend YEARS taking a shell company through the process for just the permit for the refinery.

With all due respect, how would you know?

[Sun Baked]

With all due respect, how would you know?Like you can do it quicker than the first company to be granted the permit needed to start construction of the first new refinery in 20-30 years.

They started their letter writting process in June 1999 and were granted final permits in April 2005.

So BITE ME ...

[IJ Reilly]

Like you can do it quicker than the first company to be granted the permit needed to start construction of the first new refinery in 20-30 years.

They started their letter writting process in June 1999 and were granted final permits in April 2005.

So BITE ME ...

Um, that's nice.

What's your example? Where is it? What's a "letter writing process" and how is that germane? Who held up the process, assuming it was, and why?

[Sun Baked]

Um, that's nice.

What's your example? Where is it? What's a "letter writing process" and how is that germane? Who held up the process, assuming it was, and why?Letter writing/permit process -- whatever...

You do after all have to begin the process at some point.

Nobody held it up, maybe you can do it quicker (Since you seem to think it cannot take years right now -- maybe you can point us to the 10 minute short form you fill out at the local library.)

But for the rest of the world, it takes years to get a permit granted in the US (pre-Katrina) -- after you fire off that first letter and begin requesting forms to fill out and find out what reports need to be generated, and what hoops to jump through.

Since there is only one recent example of a refinery permit granting, that happens to be in Yuma -- it's not hard to find.

There is Google. :rolleyes:

[IJ Reilly]

Letter writing/permit process -- whatever...

You do after all have to begin the process at some point.

Nobody held it up, maybe you can do it quicker (Since you seem to think it cannot take years right now -- maybe you can point us to the 10 minute short form you fill out at the local library.)

But for the rest of the world, it takes years to get a permit granted in the US (pre-Katrina) -- after you fire off that first letter and begin requesting forms to fill out and find out what reports need to be generated, and what hoops to jump through.

Since there is only one recent example of a refinery permit granting, that happens to be in Yuma -- it's not hard to find.

There is Google. :rolleyes:

The usual thing around here, when one makes a claim, is to provide the information to substantiate the claim, not to direct others to find it themselves.

I've made no claims for how long it takes to get permits to build an oil refinery, let alone how long it ought to take. But I will say that it can easily take five years to get the permits to build a shopping center, so it doesn't surprise me that it takes a similar period of time to get the permits lined up to build an oil refinery. You would think by this logic that nobody would build any shopping centers. Not a problem that I've ever noticed.

[Sun Baked]

The usual thing around here, when one makes a claim, is to provide the information to substantiate the claim, not to direct others to find it themselves.

I've made no claims for how long it takes to get permits to build an oil refinery, let alone how long it ought to take. But I will say that it can easily take five years to get the permits to build a shopping center, so it doesn't surprise me that it takes a similar period of time to get the permits lined up to build an oil refinery. You would think by this logic that nobody would build any shopping centers. Not a problem that I've ever noticed.Yes, but a refinery is probably several orders of magnitude more evil than a Wal-Mart Superstore on steroids.

And those things have a whole lot of trouble landing in backyards.

Asking small companies and investors to fight red tape, 6-10 year time period, and $30+ million cash outlay for something a gas company is refusing to do because oversupply would be bad for profits...

Then getting whacked by environuts trying to chase you out quicker than a Wal-Mart Superstore -- tends to keep people out of the business.

And there isn't any link for the current level of red tape for a refineries, except to write that first letter yourself and start killing some years and $10 million bills for a dream of gasoline flowing in 10 years.

Then prepare yourself for even more pain and time wasted if you decide to use tribal land or BLM property.

[pseudobrit]

There is Google. :rolleyes:

You're the one making the claims. Why should anyone else be bothered to chase them down?

"Bite me?" Get a grip.

[Sun Baked]

You're the one making the claims. Why should anyone else be bothered to chase them down?

"Bite me?" Get a grip.If anybody cannot figure out why dealing with the EPA and government red tape will take years.

Here's the link (http://www.ehow.com/how_2625_tie-shoes.html) that will prove quite helpful.

No google needed.

---

And IJ knew it would take years, I figured he was being his usual PIA.

So he can search for the name of the company/info himself.

Now if he wants to know why small business doesn't want to pony up the dough for a refinery -- he can invest $100k with me over the next 5 years in a worthless shell, and I'll give him $100 back on his investment in year 10, and I'll swap that worthless stock for some real stock in year 11.

In fact only 1 small company in 30 years was dumb enough to take the gamble. Of course what does this say about the investors?

[mactastic]

As noted, many projects take years if not longer to come to fruition. I talked to a guy who's in the final stages of a nearly 20 year battle to put a hotel/condominium up on the ocean side of 101 in the Pismo/Shell Beach area. Between the Coastal Commission, the city and county and state water board and the fisheries and every 'environut' between SF and LA he managed to steer this project through and make money. 20 years -- for a frickin hotel. Construction has only been going on for about 3 years, and he's about to finish the job within the next 6 months. So this argument that companies and investors aren't willing to look at long-term projects is nonsense.

And then to top that off, if there had been any real interest in building a refinery you can bet there would have been an industry push from day one of the Bush administration. Bush has betrayed the religious right, but never the corporate right. He's fought for anything that they really wanted, and I've never once heard of anyone trying to find a way to ram a refinery through. What I have heard a lot about is ANWR. They sure want that bad, and they're going to get that tiny production increase around the filibuster rules to insure it's passage. Yet they won't fight for a refinery? Why, if as you argue, they are literally dying to build one but the pesky 'environuts' won't let them?

Have the 'environuts' managed to stop any of the disasters that the Bush administration has proposed under names like 'Clear Skies' and 'Healthy Forests'? Those had strong 'environut' opponents, yet easily became law. Bush talks of building new nuclear plants, but never refineries.

[IJ Reilly]

Yes, but a refinery is probably several orders of magnitude more evil than a Wal-Mart Superstore on steroids.

And those things have a whole lot of trouble landing in backyards.

Asking small companies and investors to fight red tape, 6-10 year time period, and $30+ million cash outlay for something a gas company is refusing to do because oversupply would be bad for profits...

Then getting whacked by environuts trying to chase you out quicker than a Wal-Mart Superstore -- tends to keep people out of the business.

And there isn't any link for the current level of red tape for a refineries, except to write that first letter yourself and start killing some years and $10 million bills for a dream of gasoline flowing in 10 years.

Then prepare yourself for even more pain and time wasted if you decide to use tribal land or BLM property.

I didn't expect such a generic rant as a response. No facts at all, that I can detect. "Evironuts?" This is the kind of language I'd expect from Rush Limbaugh, not from somebody making a serious argument.

Okay, I did your homework for you. Here is what I found out about the Arizona Clean Fuel project:

1) They have been looking for a site for some years. Turns out not many communities were anxious to be home to an oil refinery. What a shocker.

2) The big holdup has been with the state, not federal, EPA.

3) They obtained their federal EPA permits in March 2005.

4) They have not even begun their federal environmental review process.

5) They are not close to raising the financial commitments needed to build the facility. Not even remotely close.

Of all of these, the last is the most telling. They could have all their permissions in hand today, and they still would not be able to build the plant. I wonder why the industry isn't lining up to finance this new refinery. Don't you?

BTW, coming to one of these debates unarmed with facts is what makes a person a "PIA." Or a troll. Take your pick.

[skunk]

BTW, coming to one of these debates unarmed with facts is what makes a person a "PIA." Pakistan International Airways? I don't get it.









:rolleyes:
(obligatory)

[solvs]

If anybody cannot figure out why dealing with the EPA and government red tape will take years.
We should get rid of the EPA then.

Seriously though, what you've described is pretty much what happens with anything. Apple Stores even. There are some who take things a little too far, but I'd rather have a few "environuts" trying to keep oil companies honest (insert joke here) so I don't get my food or water supply contaminated while they're contaminating my air. We all gotta live with Big Oil, most of us need things like gas, but that doesn't mean they get to take dangerous shortcuts any more than any other company/industry.

Your argument is without merit.

[Sun Baked]

Your argument is without merit.So I should have to provide a link to my opinion that it takes years to get through the red tape, because a bunch of people cannot figure out why the red tape will take years?

It's a little hard to link to common sense -- so I provided one on how to tie your shoes instead. ;)

[IJ Reilly]

Sorry, you won't get anywhere in this debate or any debate in this forum by spouting a series of vague generalities mixed with personal attacks.

[Sun Baked]

Sorry, you won't get anywhere in this debate or any debate in this forum by spouting a series of vague generalities mixed with personal attacks.Considering the quote that started this was a vague generality ... you live for this debate crap, I don't.

"The red tape is a nightmare right now, who would really want to spend YEARS taking a shell company through the process for just the permit for the refinery."

How the hell do you provide a link to that, everybody here "knows" it's years of red tape, plus I have no idea where to look for a copy of the step-by-step refinery permit process to confirm it does indeed take years for this process that takes years.

Certainly there aren't a lot of new refineries opening proving it takes less, unless I missed one.

I cannot provide a link to a second part -- because I don't "know" anybody that would be dumb enough to try gamble in a refinery shell company under the current rules. And I sure as heck don't know anybody that was dumb enough to do it during the period Arizona Clean Fuels was trying to put their company together. At that time there were better places to put your money.

Certainly there are better places that offer something with better odds of paying off over 10 years. And Arizona Clean Fuels, still looks like a long shot over the next 2 years.

A large company like Tosco might, but they would do it in their own name -- instead of using a shell company. Plus they'd be rather dumb to eliminate their only loophole for market manipulation and megaprofits.

Now if you found more that 1 company in the last 29 years that to tried it, provide the link. ;)

Edit: Sorry I cannot provide a link to generalities ... don't see why you are still asking for one. And to provide a link to something you already know is silly. :p

[solvs]

you live for this debate crap, I don't.
Then boy, are you in the wrong place. :p There is red tape, but that doesn't help your argument, because there's red tape to get anything done. I thought I made that clear.

And don't tell me to bite you, because I might.

[IJ Reilly]

Then boy, are you in the wrong place.

You beat me to it. I'm at a loss to understand why anyone would come around here if they don't want to debate. Maybe it's to attack people who don't agree with them. Just a theory, mind you...

[solvs]

Maybe it's to attack people who don't agree with them.
Fascist. ;)

[Sun Baked]

And don't tell me to bite you, because I might.OK, Blow Me... :p

[pseudobrit]

How the hell do you provide a link to that, everybody here "knows" it's years of red tape, plus I have no idea where to look for a copy of the step-by-step refinery permit process to confirm it does indeed take years for this process that takes years.

Sometimes red tape takes a matter of days to cut through.

Certainly there aren't a lot of new refineries opening proving it takes less, unless I missed one.

Just because refineries aren't opening doesn't mean red tape is the reason.

Sorry I cannot provide a link to generalities ... don't see why you are still asking for one. And to provide a link to something you already know is silly. :p

Your argument is the only thing that's sorry; it's childish. I know this is an industry handout that won't increase fuel supplies. I also know that you're dead wrong about everything you said so far in this thread. I can't provide a link proving it because I already know it and it would be silly to provide evidence.

[solvs]

OK, Blow Me... :p
Sorry, I'm straight. ;)

[Sun Baked]

Sometimes red tape takes a matter of days to cut through.

Just because refineries aren't opening doesn't mean red tape is the reason.

Your argument is the only thing that's sorry; it's childish. I know this is an industry handout that won't increase fuel supplies. I also know that you're dead wrong about everything you said so far in this thread. I can't provide a link proving it because I already know it and it would be silly to provide evidence.Actually, avoiding falling to the level of a pompous spin doctor from the political section isn't childish ...

Edit: I'll try to avoid falling into the trap from now on, since you are so much more informed than the rest of us.

[zimv20]

IJ and others...

could this be the first part of a 3-part plan to get new refineries built?

1. ease regulation
2. increase future supply by drilling in alaska
3. federal grants / tax breaks for building new refineries

[pseudobrit]

Actually, avoiding falling to the level of a pompous spin doctor from the political section isn't childish ...

Edit: I'll try to avoid falling into the trap from now on, since you are so much more informed than the rest of us.

Oh, yeah, I was the one acting like he knew what he was talking about.
And I was the one who, when pressed for evidence to back his assertions, refused to do so.

No, wait. That wasn't me at all; it was you.

[Sun Baked]

Oh, yeah, I was the one acting like he knew what he was talking about.
And I was the one who, when pressed for evidence to back his assertions, refused to do so.

No, wait. That wasn't me at all; it was you.http://localsearch.azcentral.com/sp?keywords=arizona+clean+fuels (most of the stuff I've read is in the newspaper from years ago -- the pay section)

http://www.arizonacleanfuels.com

http://www.azdeq.gov/environ/air/permits/acf.html

If you know anything at all about the way AZ DEQ acts, then you know they sit on stuff and jack people around.

But that's my opinion of all the fiefdoms people create in govt. jobs.

---

Be nice to see your link on how it's so easy to cut throught the red tape with AZ DEQ to get an air quality permit.

Edit: Especially since they started the process in 6 years ago, and you hinted that it could be cut to days.

And I was talking about the pathetic requirement people have for requiring links on other people's opinion -- especially since I wasn't stating facts. Oh wait that would be you and IJ.

Feel free to shoot my opinion down, won't hurt my feelings -- but remember to include all the links.

[pseudobrit]

Be nice to see your link on how it's so easy to cut throught the red tape with AZ DEQ to get an air quality permit.

We weren't talking about Arizona's government. This was a debate about federal bureaucracy. I guess since you've failed to make the point about the latter, you've decided to reframe your argument in a more narrow light (which you've still failed to back up with the relevant articles) using the former.

And I was talking about the pathetic requirement people have for requiring links on other people's opinion -- especially since I wasn't stating facts. Oh wait that would be you and IJ.

This sounds like you were making an argument based on facts:

The red tape is a nightmare right now, who would really want to spend YEARS taking a shell company through the process for just the permit for the refinery.

So apparently you're saying this is only your opinion and we can disregard it as such.

[Sun Baked]

This sounds like you were making an argument based on facts:

So apparently you're saying this is only your opinion and we can disregard it as such.The red tape being a nightmare part? Or me asking who would really want to take a shell/small company through the process?

6 years of working closely with the AZ DEQ or EPA would be a nightmare for me, and they probably haven't got to the tribes yet. :rolleyes:

Of course some people thrive on this kind of nightmare.

You finally got it ... if you want to shoot it down, feel free and include links.

Now you have me interested in your proof that this should only take days. :confused:We weren't talking about Arizona's government. This was a debate about federal bureaucracy. I guess since you've failed to make the point about the latter, you've decided to reframe your argument in a more narrow light (which you've still failed to back up with the relevant articles) using the former.OK would be nice to see how you can cut through the red tape nightmare in a matter of days (take you pick of any bureaucracy you like.)

[pseudobrit]

You finally got it ... if you want to shoot it down, feel free and include links.

You stated an opinion, can't back it up with facts, and now I'm supposed to chase it down and refute it with links? Sorry, you've got it backwards, pal.

Now you have me interested in your proof that this should only take days. :confused:OK would be nice to see how you can cut through the red tape nightmare in a matter of days (take you pick of any bureaucracy you like.)

You asserted that red tape is something we universally "know" takes years to cut through, and I simply stated that it's not always the case.

[Sun Baked]

You stated an opinion, can't back it up with facts, and now I'm supposed to chase it down and refute it with links? Sorry, you've got it backwards, pal.

You asserted that red tape is something we universally "know" takes years to cut through, and I simply stated that it's not always the case.We are talking refineries here are we not? And I have been talking about the red tape associated with those.

It is currently expensive and takes years, and I have provided the link to the one company that has tried it.

A now we have a bill that would cut that down to a year to construction for some refineries.

[IJ Reilly]

The point I was preparing to make when we got sidetracked with all this recrimination, is that if we're going to cut through "red tape" to get things done, we'd better bloody well know what "red tape" is causing unneeded delays, and what rules that "red tape" represents and why they exist. It's way too simplistic to argue for cutting "red tape" by waiving whatever rules happen to be between some corporation and what they want to do. This is why I'm making a specific request from those who'd call for the waiving of rules and processes. Tell me specifically which rules need to be changed, and why, and demonstrate how waiving those rules won't lower the levels of environmental protection that I think we deserve. Give me those details, and I'm on board. Just don't tell me that we should automatically accept what some industry wants simply because they have the ability to get Congress to do their bidding. I am not going to accept any of this on faith.

[mactastic]

Look, I'm not suggesting that refineries aren't VERY VERY HARD to get built. My point is that LOTS OF THINGS ARE VERY VERY HARD TO GET BUILT and yet people still manage to build them. I can think of a half-dozen projects in my neck of the woods that have been 'in the works' for over a decade. I talked about one that I know of that took 2 decades for a small (by comparison to a refinery) commercial project. We just had a city vote on a development project (mall type thing, no small potatos) that the developer has been trying to build for 15 years. The vote was close, but against him, so now he's taking his plan to the county. Puts another 5 years or so on the project timeline, but is he giving up? Hell no. He's working to address the concerns raised and gonna give it another go. Who knows, maybe he is stupid. I wouldn't want to call him that though.

So no, I wouldn't be surprised that it takes an exceedingly long time to maneuver through the buereaucratic red tape necessary to get a refinery built. I'm not denying that this red tape exists, nor that it is sometimes punitive and unnecessary.

I'd even go so far as to say that the environmental review process could stand to be overhauled. Not dismantled, but changed. And not by the industry alone. But that's a separate argument.

To suggest that only stupid investors look at a 20-year project is asinine. To suggest that 20 years makes a project unbuildable is also asinine.

[Sun Baked]

To suggest that only stupid investors look at a 20-year project is asinine. To suggest that 20 years makes a project unbuildable is also asinine.No, it is stupid for a "small investor" to spend all that time with a 10-year project that will most likely never get done -- especially if it is in an investment in a dubious shell company with no exit clause for your dollars, and with a questionable or unproven management team.

However, in the past 15 years since they changed the permitting requirements, lots of petroleum refineries have been sold.

If your shell company cannot get enough money together to pay $2 billion to buy a operating refinery with your present management team, will the street have enough confidence in that same team to fund your new $3 billion facility in 6 years?

Now that's the big problem I see with spending 6 years of your time and money in a dubious shell company. Especially when they have not proven themselves in buying and operating an existing petroleum refinery.

Funny thing about the actual funding acid test -- once you pass it and start paying the debt service and investors, you are no longer a small company (nor are you a shell.)

If you do decide to go down this route, you may find that the current management is replaced in order to have the financial/management strength to swing the needed billions to build. And they may bring in their own bridge finance investors and dilute the current long-term shareholder down quite a bit.

---

If you can find a way to invest in a 20-year project without losing control or having your stake diluted, it's a fantastic chance. Even if it is risky.

Edit: I think I've kept saying shell company. And I mean shell company close to this SEC definition -- that has no or nominal operations, and no or nominal assets.

[IJ Reilly]

All of the above flies in the face of reality. Many, many construction projects take five years or longer, sometimes much longer, to come to fruition. Residential, commercial, industrial -- you name it. The proponents of these projects aren't stupid, they are dogged and determined, and they think long-term because they have to.

The sad reality is, the Arizona Clean Fuels project can't seem to find the financial commitments required to actually build the plant once they've got the permissions in hand, which to me, looks like the project's fatal flaw. I wish they could, because we could certainly use the fuels on the market. But what this tells me is that the incentive in not on the side of risking capital to increase supply, when charging more for the same supply is far less risky. You would not expect to see this behavior in a free market, but in truth the market for refined petroleum products is too dominated by a handful of large players to be really competitive.

[Sun Baked]

All of the above flies in the face of reality. Many, many construction projects take five years or longer, sometimes much longer, to come to fruition. Residential, commercial, industrial -- you name it. The proponents of these projects aren't stupid, they are dogged and determined, and they think long-term because they have to.

The sad reality is, the Arizona Clean Fuels project can't seem to find the financial commitments required to actually build the plant once they've got the permissions in hand, which to me, looks like the project's fatal flaw. I wish they could, because we could certainly use the fuels on the market. But what this tells me is that the incentive in not on the side of risking capital to increase supply, when charging more for the same supply is far less risky. You would not expect to see this behavior in a free market, but in truth the market for refined petroleum products is too dominated by a handful of large players to be really competitive.You are comparing two different realities, this is much closer to a business used in a pump and dump than a contsruction company.

Arizona Clean Fuels cannot find the money, because they are basically a shell of a company and have a management team that makes the big investors run.

The company exists on paper and has an office, and not much else. In fact I can see at least one other shell company this management team has taken bankrupt, and this is the third name used for this pipe dream.

Do you really want to invest with these people? They have no history and no current business operations.

However, the examples you keep using -- most of these cases, the company is real, the management or individual has done these projects many times before, and you can usually find an investor happy to take your place.

---

And I keep saying shell company, because I mean a shell company -- and not Shell Oil.

[mactastic]

All of the above flies in the face of reality. Many, many construction projects take five years or longer, sometimes much longer, to come to fruition. Residential, commercial, industrial -- you name it. The proponents of these projects aren't stupid, they are dogged and determined, and they think long-term because they have to.
Exactly. You'd think he'd never met a determined developer.

The sad reality is, the Arizona Clean Fuels project can't seem to find the financial commitments required to actually build the plant once they've got the permissions in hand, which to me, looks like the project's fatal flaw. I wish they could, because we could certainly use the fuels on the market. But what this tells me is that the incentive in not on the side of risking capital to increase supply, when charging more for the same supply is far less risky. You would not expect to see this behavior in a free market, but in truth the market for refined petroleum products is too dominated by a handful of large players to be really competitive.
Despite huge record profits for oil companies AND refiners over the last 18 months they can't seem to find the capital to expand their capacity which would be the normal capitalistic response. Which begs the question, why would these folks be so interested in new drilling sites, but not new refinery sites?

[Sun Baked]

Exactly. You'd think he'd never met a determined developer.And it seems like you've never seen a shell company implode.

There is a reason bogus and shell company turn up near each other so often.

If you feel safe investing in a shell company, there are a lot of people waiting to take your money with a silly grin on their face.

Also Enron like to play with these types of entities.

[IJ Reilly]

You are comparing two different realities, this is much closer to a business used in a pump and dump than a contsruction company.

Arizona Clean Fuels cannot find the money, because they are basically a shell of a company and have a management team that makes the big investors run.

The company exists on paper and has an office, and not much else. In fact I can see at least one other shell company this management team has taken bankrupt, and this is the third name used for this pipe dream.

Do you really want to invest with these people? They have no history and no current business operations.

However, the examples you keep using -- most of these cases, the company is real, the management or individual has done these projects many times before, and you can usually find an investor happy to take your place.

---

And I keep saying shell company, because I mean a shell company -- and not Shell Oil.

They must have some backers to have gotten them this far. If Arizona Clean Fuels is a "shell company" then so are most developers. Few developers actually build the projects, they obtain the entitlements and sell the package to somebody else who does the actual construction and markets the product. I don't know if this is ACF's plan, but clearly they aren't asking anyone to plunk down $2 billion on the barrel-head (so to speak). They are looking for financial commitments contingent on their actually getting the project approved -- IOW, the construction financiers take essentially no risk if the project is never built. Yet, they still aren't getting these commitments. You must admit, this defies the logic of a market which is so short of the commodity they wish to sell.

[zimv20]

And it seems like you've never seen a shell company implode.

There is a reason bogus and shell company turn up near each other so often.

If you feel safe investing in a shell company, there are a lot of people waiting to take your money with a silly grin on their face.

out of curiosity, do you have a relationship w/ such a company?

[Chip NoVaMac]

What incentive is there to build a refinery? Profits are already sky high without that additional capital expenditure. It's still very possible to find a refinery site -- they managed to find a place to bury nu-cu-lar waste. You're telling me they can find that site despite all the environmental regulations, yet the best and brightest the oil industry has to offer can't find a refinery site? Methinks the oil industry doth protest to much.

They're flush with cash and high friends in places willing to bend any rule they want (as evidenced by this and many other industry-friendly policies of this administration) and yet they somehow can't get their poor poor refinery built. I don't buy it.


Had heard reports that refiners shut down many refineries over the years, just to keep their pockets fat with cash. They did not want to play by the rules (environmental and such).

In the end we have only ourselves to blame for the debacle in Washington. We only want to elect on sound bites and attack ads. The one with the most money wins the elections for the most part. Someone who says that they will not take lobbyist money, gets drowned out.

[Sun Baked]

They must have some backers to have gotten them this far. If Arizona Clean Fuels is a "shell company" then so are most developers. Few developers actually build the projects, they obtain the entitlements and sell the package to somebody else who does the actual construction and markets the product.No most developers give investors enough confidence to move forward -- Arizona Clean Fuels hasn't.

Arizona Clean Fuels has the state permit, but still lacks the land, and the contingent contract for the oil supply.

Since Mexican lawmakers actually have to pass a law to sell Pemex oil to ACF, it is a little iffy.

Not quite as bad as it was 6 years ago when they had nothing and were a completely empty shell, but as an investor this would probably be the time to come in with a bridge loan and rape ACF for a big chunk of the company.out of curiosity, do you have a relationship w/ such a company?Had, yes... boom. Stagger around. Boom.

Need several hundred thousand shares of fancy toilet paper? Used to be worth a lot. :(

Learned enough not to be with the first tier investors, avoid companies with zero operations, leap when they are near operational -- because you can rape the company (and first investors) for a huge stake with lower risk and bigger rewards.

And caution most people to run away from the money sucking black holes, and stick with companies that are operational.

If there isn't a 10-Q, 10-K, or a balance sheet with income being generated -- run very fast.

Investing with a shell company like this refinery 6 year ago is gambling.

Investing with a developer holding a troublesome project is a risk.

[mactastic]

And it seems like you've never seen a shell company implode.
Sheesh. I've seen real companies explode. Ones with assets and financing. It happens, but does that stop people from trying? Most restaurants fail within a year of opening, but does that stop people from trying?

There is a reason bogus and shell company turn up near each other so often.

If you feel safe investing in a shell company, there are a lot of people waiting to take your money with a silly grin on their face.
Yeah I get it there is a lot of risk in investing money without asking questions. But why do people still do it?

Also Enron like to play with these types of entities.
Good excuse. Enron also apparently like to play with California's power system as well. Should we abandon it? Say that it's not possible for it to be functional?

I don't know what your obsession with 'shell companies' is, but lots of business deals happen with the main company simply coordinating all the action, not necessarily holding all the assets personally. Why couldn't one of the big oil companies swoop in and make this happen? It should benefit them too -- but they can make money without that capitol outlay just by keeping prices artificially high.

[IJ Reilly]

No most developers give investors enough confidence to move forward -- Arizona Clean Fuels hasn't.

And why is that?, I keep asking. Blame "enviro-wackos" all you like, but it's clear that ACF has much bigger problems than environmental issues, because these can and are solved all the time for all manner of projects.

[IJ Reilly]

Had heard reports that refiners shut down many refineries over the years, just to keep their pockets fat with cash. They did not want to play by the rules (environmental and such).

Well, yeah. Recently Shell closed a refinery near Bakersfield and was determined to keep it closed by not even offering it up for sale to somebody else who might want to operate it. That raised quite a political stink in a state where supplies have been running on the hairy edge for years.

[Sun Baked]

And why is that?, I keep asking. Blame "enviro-wackos" all you like, but it's clear that ACF has much bigger problems than environmental issues, because these can and are solved all the time for all manner of projects.The rest of the problems can also be solved, as long as Pemex ain't the problem.

ACF is likely the problem and they'll ride this pig into the ground and take the investors with them.

My bet for several quatloos would be the bridge capital offers for the $75-100 million are raping the company, asking for 80% of the stock, and ejecting current management for a veteran group that is satisfisfactory to their big money investors.

[mactastic]

It has to be 'environuts'. It can't possible be an incompetent business team that flubbed this one.

[solvs]

It has to be 'environuts'. It can't possible be an incompetent business team that flubbed this one.
Yeah, I think that's our problem with Sun's argument. I guess we just doubt that cutting some "red tape" (some of which may be needed) is going to magically fix everything. Personally, I think oil companies need more regulation. We're not exactly talking about small business here.

[blackfox]

what in the hell?...where has this thread gone?

In any case, although much interests me about this incident, I am particularily piqued by the behavior of the House membership. Does no-one else find this to be something worth discussion?

I personally find it troubling that a party leadership would trump it's representatives opinions on the matter and that those representatives would allow that to happen.

I may be cynical, but this still smarts...

[Sun Baked]

Currently the protracted permit process keeps fly-by-night investment groups out ...

This bill passes and they will flock to biggest boom market since energy deregulation.

Probably a lot of the same people jumping in. :(

---

Do you really want some of these people running a refinery?

Heck, I wouldn't wan't Arizona Clean Fuels running one. And they have vast experience pumping gas (with all the gas stations they own.)

The new refineries won't be dangerous, but I wouldn't say the same about the people running them. I'd expect some major safety glitches.

Adding

I guess that old Shell refinery in Bakersfield CA that was mentioned sold cheap, to Flying J.

Shell dumped it for $130 million, the buyer Flying J is having problems.

Not All Flows Smoothly at Bakersfield Refinery (http://www.latimes.com/business/la-fi-refinery23oct23,1,223122.story?coll=la-headlines-business)