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“The best outcome for the oil companies is if nothing changes”

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“The best outcome for the oil companies is if nothing changes”

Posted 26 April 2013 in

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“The best outcome for the oil companies is if nothing changes”

–Paul Bryan, former Chevron executive

This week, oil companies are releasing their quarterly financials and Chevron, like the rest of the industry, has managed once again to amass exorbitant profits at the expense of the American taxpayer – $6.2 billion dollars in the last three months alone.

Now if oil companies like Chevron were actually interested in reducing the squeeze on our wallets, they would reinvest some of those billions into the research and infrastructure we need to support alternative, renewable fuels. But instead, Chevron “quietly shelved” its renewable fuel projects in 2010, despite assurances from their own scientists that their research had yielded a “technical winner.”

This is all part of a larger pattern. Oil companies were willing to support renewable fuel last decade, when they didn’t see it as viable competition. But now that they see real change on the horizon, they’re more worried about protecting their monopoly than ushering in the next generation of transportation fuel. That’s why API and its corporate backers (like Chevron) will go to any lengths to kill the Renewable Fuel Standard because they know that if gas prices stay high, so do their profits.

If this makes you mad (it sure makes us mad), then take a stand and sign the pledge to support renewable fuel!

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“The best outcome for the oil companies is if nothing changes”

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Chevron ignored a decade of warnings before Richmond refinery explosion

Chevron ignored a decade of warnings before Richmond refinery explosion

Stephen Schiller

The Chevron refinery explosion was visible from far away.

An August fire and explosion at a refinery in Richmond, Calif. — which sickened 15,000 residents of the San Francisco Bay area — was the result of Chevron not giving a shit about safety.

That’s the paraphrased conclusion of an investigation into the accident by the U.S. Chemical Safety Board. While releasing an interim report Monday, the board said a regulatory overhaul was needed to protect the public from such accidents.

From the Contra Costa Times:

At a news conference in Emeryville, officials from the U.S. Chemical Safety Board portrayed a refinery that took a Band-Aid approach to plant maintenance — pipes were often clamped as they aged rather than being replaced, and the section of pipe that ruptured had deteriorated to less than half the thickness of a dime. …

“The regulatory regime in which the refinery worked allowed this to happen,” Rafael Moure-Eraso, chairman of the U.S. Chemical Safety Board, told a room full of news cameras and reporters at the Hilton Garden Inn.

Moure-Eraso said the refinery industry nationwide is “a very old industry … and there is very little reinvestment by the companies. What happened here is a reflection of the sector in general. We need to be looking at inherently safer technologies. The approach must be not to manage risk but to avoid risk from the beginning.”

The explosion was caused by a rupture in a corroded pipeline that allowed vapor to escape and ignite. Chevron knew for a decade that the pipeline was corroding away. But Chevron didn’t do anything about it, and then the inevitable happened. From Reuters:

The Safety Board … said Chevron did not act upon six recommendations over 10 years to increase inspection and replace the line at its Richmond, California, refinery with upgraded pipe.

During the 10 years before the August 6 blast, refinery officials saw signs the pipeline’s walls were thinning due to corrosion from rising sulfur content in the increasingly diverse crude oil grades the refinery was processing, the CSB found.

Chevron’s apparent negligence cost its CEO some of his potential bonus payment last year, but he still took home a gargantuan paycheck. From a Contra Costa Times report published last week:

Chevron’s top boss, John Watson, received 30 percent more in total compensation in fiscal 2012, despite a cut in his bonus after a string of accidents for the energy giant, a regulatory filing Thursday shows.

The company awarded Watson a total compensation package of $32.2 million last year. That was up 30 percent from a total pay package of $24.7 million in fiscal 2011, a proxy filing ahead of the company’s annual meeting showed. …

Chevron’s board of directors last month decided to cut the bonuses for the CEO and other top executives after a series of mishaps jolted the company, including an August 2012 fire at the company’s refinery, a November 2011 oil leak from the ocean floor near Brazil and a January 2012 explosion on a oil rig off the coast of Nigeria that killed two.

Glad to hear Watson is going to be OK, despite all those terrible accidents that affected other Chevron workers and innocent nearby residents.

John Upton is a science aficionado and green news junkie who

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Chevron ignored a decade of warnings before Richmond refinery explosion

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Beaver dams block Chevron oil spill in Utah

Beaver dams block Chevron oil spill in Utah

Brian Yeung

Beaver dams prevented diesel from reaching Willard Bay.

Chevron’s third pipeline spill in Utah in as many years on Monday released hundreds of barrels of diesel, polluting a river, coating beavers with the slick, and leading to the closure of a state park and the evacuation of campers.

Dozens of cleanup workers are mopping up the fuel along the northeastern edge of the Great Salt Lake. An estimated 4,200 to 6,300 gallons of fuel leaked after a pipeline laid in 1950 ruptured.

The pipeline was shut down after the leak was detected. Diesel was blocked from flowing into the wildlife-rich waters of Willard Bay by a series of beaver dams.

Two hero beavers covered with diesel were rescued. The dam where they lived will be torn out.

From The Salt Lake Tribune:

“From the wildlife perspective,” said Utah Division of Wildlife official Phil Douglass, “we are obviously very concerned about how this will impact the wildlife and the fishery that exists in that area.”

Willard Bay comprises nearly 10,000 acres of fresh water that is located atop the Great Salt Lake flood plain north and west of Ogden. In addition to wildlife, it supports populations of crappie, walleye, wiper and catfish in its popular fishery. The area is also popular with boaters.

The newspaper also noted that Chevron’s pipelines leaked oil into Utah less than three years ago — twice:

The two 2010 leaks spilled 54,600 gallons of crude oil near Red Butte Garden in Salt Lake City’s eastern foothills, and cost the company an estimated $43 million in cleanup costs, fines and other spill-related expenses. Monitoring is expected for years to come.

Lynn de Freitas, executive director of the Friends of the Great Salt Lake, said the latest spill raises broader questions about the cumulative impacts of all the pipelines snaking through Utah — not just this one, but all the others, including the 250-mile one that carries crude between Wyoming and the refineries on the lake’s edge and another along the south edge of the Great Salt Lake that transports fuel to Las Vegas.

“It’s part of a tapestry of habitats, and all of the habitats matter because they fill the needs of the wildlife and the birds that use it,” she said.

“When is the next big one going to occur?”

John Upton is a science aficionado and green news junkie who

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Pipeline struck by tug still burning, yards away from oil-laden barge

Pipeline struck by tug still burning, yards away from oil-laden barge

Coast GuardThis photo, taken Wednesday, shows how close the oil barge, on the left, is to the burning tug and pipeline. The barge contains 2,200 barrels of crude oil.

A tugboat and a gas pipeline continued to burn in Louisiana on Thursday — and connected to the burning tug is a barge laden with 2,200 barrels of crude oil, potentially ready to catch fire or spill.

The tug crashed into the liquid petroleum pipeline in Bayou Perot, 30 miles south of New Orleans, on Tuesday evening in shallow water after its crew steered into an area that vessels are not supposed to enter.

Not only was the no-go area clearly marked with white stakes, but the crew apparently plowed right over the warning stakes. ”The tug and barge was in the middle [of a marked pipeline area],” Coast Guard spokesman Tanner Stiehl told WWMT. “It had taken down some of the white stakes and was in the middle of that area.”

Miraculously, all of the barge’s crude has remained safely aboard so far, as emergency crews sprayed water over the barge to keep it cool and over the nearby flames. More than a dozen emergency response boats were floating near the fire on Thursday, with 40 emergency workers on hand ready to respond to a spill. A ring of floating absorbent boom was laid around the barge to help contain the oil if it leaks.

But nothing can be done to extinguish the blaze — officials are waiting for the contents of the severed liquid petroleum gas pipeline to burn themselves out. (Previous reports inaccurately stated that it was a natural gas pipeline.) The Associated Press reported on Wednesday:

The Coast Guard said pipeline owner Chevron shut off the flow of gas to the area, but what’s left in the 19-mile section of pipeline could fuel the fire until Thursday or later.

Petty Officer William Colclaugh said Chevron began a process Wednesday to inject nitrogen gas into the pipeline in hopes of extinguishing the blaze, but it was unclear how soon that might affect the fire.

An oil spill would wreak further havoc on fisheries and coastal ecosystems in an area still affected by the 2010 Deepwater Horizon spill. The Coast Guard had previously said that Tuesday’s accident had triggered an oil spill. It now appears that the sheen the Coast Guard had spotted on the water surrounding the accident was not oil — it was a thick layer of ash from the blazing gas.

As emergency workers labored to protect the oil-laden barge from the flames on Thursday, questions were being asked about how the crew of the 47-foot tug Shanon E. Settoon could have drifted so far off course.

Unusually, the Coast Guard refused to say whether the tug boat crew had been tested for drugs and alcohol after the accident, as is standard practice. “We’re not releasing that information,” Stiehl told Grist. As many as four members of the tug boat’s crew were reportedly injured. The captain reportedly suffered burns to more than three-quarters of his body, which could have complicated normal toxicology testing procedures.

John Upton is a science aficionado and green news junkie who

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Pipeline struck by tug still burning, yards away from oil-laden barge

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Americans spent 4 percent of household income on gas in 2012

Americans spent 4 percent of household income on gas in 2012

In 2012, Chevron made $26.2 billion in profits. Exxon, $44.9 billion. Shell, $26.59 billion. At today’s prices, that’s enough to buy almost 25 billion gallons of gas in California.

Last year, Americans paid record-high average gas prices, a fact that is certainly linked to the oil companies’ massive profits.

How much did Americans spend on gas? From the U.S. Energy Information Administration:

Gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4% of income before taxes, according to EIA estimates. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures.

EIA

Click to embiggen.

Four percent of household income went to gasoline in 2012. But here’s the kicker:

U.S. gasoline consumption fell in 2011 to 134.2 billion gallons, its lowest level since 2001. However, at the same time, EIA’s average city retail gasoline price rose 26.1% in 2011, and another 3.3% in 2012, when it reached $3.70 per gallon. The effect of the higher prices in 2011 and 2012 outweighed the effect of reduced consumption.

We are paying more for gas even though we’re using less. Allowing just three oil companies to rake in nearly $100 billion in profits.

Hat-tip: Ed Crooks.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Chevron reports record profits — and will spend some of them undermining California pollution standards

Chevron reports record profits — and will spend some of them undermining California pollution standards

Another day, another oil company reporting massive quarterly and annual profits. Today: Chevron.

From the Associated Press:

Chevron Corp. posted a 41 percent gain in net income for the fourth quarter as the company produced more oil and gas, improved the performance of its refinery business and realized a gain from swapping assets in an Australian natural gas field.

Chevron Corp. posted net income of $7.2 billion for the quarter on revenue of $60.6 billion. That’s up from $5.1 billion on revenue of $60 billion a year ago.

It was the biggest fourth quarter profit in the company’s history.

Emphasis added, so that you can marvel.

And what will Chevron do with its gobs and gobs of money? One million dollars of it will go to pay a fine levied by the state of California. And some will go to undermining that state’s carbon-reduction rules.

From the Contra Costa Times:

San Ramon-based Chevron is leading an aggressive campaign to delay implementation of California’s Low Carbon Fuel Standard, a cornerstone of the state’s efforts to reduce greenhouse gas emissions.

The fuel standard requires the oil industry to gradually reduce the “carbon intensity” of transportation fuels like diesel and gasoline by at least 10 percent by 2020. Chevron and its allies, including the Western States Petroleum Association, are trying to undermine the standard by rallying opposition, financing critical studies and lobbying the Democratic-controlled Legislature, state agencies and Gov. Jerry Brown. …

Chevron and the Western States Petroleum Association argue that the 2020 timeline can’t be met without severe economic impacts, including a huge spike in gasoline prices.

Ironically, higher gasoline prices are also what helped propel Chevron to its all-time best quarter. Don’t pretend you don’t like it, Chevron.

As we did yesterday with Shell, we’ve broken Chevron’s quarterly profits down: $80 million a day. $3.3 million an hour. $926 every second. And so, Chevron would have earned:

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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California levies record $1 million fine against Chevron for refinery fire

California levies record $1 million fine against Chevron for refinery fire

Nearly six months after a Chevron refinery erupted in flames in Richmond, Cailf., there’s a tiny bit of charred justice for residents of the San Francisco East Bay area.

In an announcement Wednesday, California’s Division of Occupational Safety and Health (Cal/OSHA) said it would be fining Chevron $963,200 for the fire — the biggest fine ever levied by the agency, and the biggest fine Cal/OSHA was even legally able to levy.

Cal/OSHA enforces workplace-safety law, and this judgment stemmed directly from 25 violations the agency said Chevron had committed. From the San Francisco Chronicle:

The state said 11 of the violations were willful and that Chevron had disregarded known and obvious hazards, a category that carries a fine of $70,000 per instance. Twelve other violations were deemed serious, with fines ranging from $6,000 to $25,000 apiece. The other two violations were minor.

Cal/OSHA found that Chevron officials ignored their own reliability department’s urging in 2002 that they replace the pipe that ultimately failed. Company inspectors told managers that the line was vulnerable to corrosion.

The line had lost more than 80 percent of its thickness to corrosion when it finally ruptured, a separate federal investigation has found. …

The state also found several violations at the refinery that weren’t related to the fire, but which suggest that Chevron’s safety regimen was lax.

Among those were nine makeshift repairs of pipe leaks in which Chevron had tried to fix the problems with clamps, Cal/OSHA said. Such repairs should have been temporary, but “in some cases the clamps remained in place for years, rather than (Chevron) replacing the pipes themselves,” the agency said.

The judgment did not say whether Chevron’s own workers had actually made the situation worse by puncturing another pipe.

In a move that surprised no one, Chevron vowed to appeal the decision, specifically the “willful” characterization.

Chevron wasn’t the only passive-aggressive problem at this party. Cal/OSHA itself was criticized after the fire when it was discovered the agency had not fined a major oil company in 10 years, and had been inspecting refineries in about 50 hours each, compared to 1,000 hours spent on average by federal officials.

As for members of the general public who also suffered from Chevron’s black plumes — about 15,000 of whom sought medical attention at local hospitals — Chevron says it’s paid $10 million to area medical centers in compensation.

It’s a little bit of justice for poor, dirty Richmond, but it’s not likely to quell the unrest there. Two weeks ago, even Richmond Mayor Gayle McLaughlin joined in a demonstration at the refinery protesting Chevron’s comically large money sacks of influence over local politics. The oil giant can build all the community gardens it wants — this town will still remember the time Chevron sent their kids to the hospital with acute respiratory distress, and then tried to buy the city council.

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If named secretary of defense, Chuck Hagel will leave Chevron’s board

If named secretary of defense, Chuck Hagel will leave Chevron’s board

secdef

Chevron board member Chuck Hagel.

A spot of good news: If Chuck Hagel is confirmed as defense secretary, he will resign his seat on the board of Chevron. While it seems likely that the oil company would prefer he remain, helping guide its strategy as he simultaneously made determinations about the deployment and structure of the largest military in the history of the world, others disagreed.

From The Wall Street Journal:

Chuck Hagel will shed hundreds of thousands of dollars of stock in Chevron Corp. CVX -0.46% and private equity firm McCarthy Group LLC if the Senate confirms him to be the next defense secretary, according to his financial disclosure. …

Mr. Hagel’s assets were valued between $2.9 million and $6.1 million in total. … In addition to his stock holdings, Mr. Hagel earned $116,000 in director fees from Chevron and between $5,001 and $15,000 in dividends.

In addition to divesting Chevron and McCarthy holdings, Mr. Hagel said he would resign his positions with both firms and 25 other entities.

Why? “One conservative outside group, the American Future Fund, said that the Chevron holdings could have posed a potential conflict of interest because of the company’s fuel contracts with the Pentagon.” Oh, right. The massive conflict of interest. Thanks for pointing that out, conservative outside group.

Once Hagel resigns from Chevron’s board, he will forget all about the company’s priorities and its ongoing arguments for expanding the use of its products in the military. He will not fall back on the many discussions he had as a compensated member of the board and as a shareholder in the company when determining how the military should operate.

Leaving Chevron in the same unhappy position in which Halliburton found itself after its CEO Dick Cheney resigned to become vice president.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Chevron is pleased with how much money it made last year, which is nice

Chevron is pleased with how much money it made last year, which is nice

Hey, hey! Happy times at Chevron headquarters, located at 10 Satan Street in a secret city that hovers out of sight behind storm clouds. The company’s fourth quarter profits will be “notably higher” than third quarter profits! (Third quarter revenues for the company were only $56 billion. Sad face.)

Bruna CostaChevron headquarters, somewhat obscured

From Bloomberg:

The outline given by the second-largest U.S. oil producer by market value hints at a bright succession of earnings reports when the world’s biggest publicly traded energy producers begin releasing results in coming weeks, said Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis.

“Chevron’s results certainly provide an optimistic preview of what its peers in the integrated energy sector have in store,” Youngberg said in a telephone interview yesterday.

Hooray! Optimism in these dark times. Refreshing.

As for ExxonMobil:

Exxon, based in Irving, Texas, is expected to report net income of $43.8 billion for 2012, according to the average of six analysts’ estimates compiled by Bloomberg.

Clap clap clap clap! It will either spend that $43 billion by giving $6 to every living human being or by buying more things that enable it to suck more oil out of the ground more quickly to hasten the planet’s wrenching slide into a changed climate. (Sad face.)

Somewhere, behind the darkest cloud in the night sky, a toast is made. “To as much as we can get, as soon as we can get it.” Glasses clink. A single lightning bolt flashes to the ground leaving a scorched “X” that marks yet another place to drill.

Source

Chevron Strikes Optimistic Note for Quarterly Earnings, Bloomberg

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Chevron is pleased with how much money it made last year, which is nice

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