The oil industry is rich … isn’t it?

gas-pump-dollars

The one thing we all know about the oil industry is that it’s awash with money.  Except that if you look at the refining business in the UK, it’s not.

Refineries in the UK work on a margin of around 1.65 pence per litre.  (Compare that with the £1.40 you pay at the pump).  Taking out operating costs, energy, salaries etc, that comes down to a net figure of 0.6p/litre.  New costs imposed by UK legislation take out around 0.1p.  And the industry is now facing new EU legislation, including the Emissions Trading Scheme Phase III, the Industrial Emissions Directive, and the Fuel Quality Directive (FQD).  That last by itself will cost 1p/l.  Taking all the regulatory costs together, that will see the industry making a loss of around 0.75p/l.

Can’t they just put the prices up?  No they can’t.  It is becoming cheaper to import refined oil products from other countriess than to refine under EU rules in the UK.  They tell me that India has some excellent, very large, modern, state-of-the-art refineries, which deliver lower costs without the burden of EU rules.  No one looking to invest in refining capacity will do it in the EU, faced with massive regulatory uncertainty and massive regulatory costs.  And we’ve already seen one major UK refinery, Petroplus’s Coryton, close with the loss of 850 jobs.

Yet again, we see EU regulation driving business, jobs and investment out of the EU altogether, and usually to jurisdictions with lower environmental standards.  So our “Green” policies undermine European economies while actually increasing CO2 emissions.  It’s sheer lunacy.

The FQD is a particular problem, not only for its cost but for its distorting effect on the market.  The first objective was to ban imports of Canadian oil sand products (which in any case go mostly to the USA, not Europe).  But they’ve made a real dog’s breakfast of it.  In effect, they’ve rated oil from all sources for “Green-ness”.  And they’ve ignored the market impact.  This will limit EU refineries to a fraction of the global market — and will therefore drive up prices in that sector, creating a unique penalty for EU refiners — and for EU businesses and motorists.  It’s a spectacular own goal.

Sometimes I despair over the folly of the EU.  And I am more than ever convinced that we should be Better Off Out.

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7 Responses to The oil industry is rich … isn’t it?

  1. mikestallard says:

    In the Alice in Wonderland where Guy Verhofstadt lives with his chums, all this makes perfect sense.
    Which is why, I agree, we must get out fast.
    But how?

  2. Joseph T Croft says:

    what annoys me most about our fuel is the amount the Government gets from it , they don’t have to do any research to find oil , they don’t drill for oil , as far as I can see they don’t do any thing apart from taking a larger slice of the cake than any body else , you would think with a large population like ours with more people buying fuel it would be cheap , and yet Australia with a population a 3rd of ours its far cheaper ,

  3. Adrian Hey says:

    Wouldn’t it be nice to be ruled by people who actively encouraged and supported our industries instead of trying to destroy then. Alas, it seems that at both the EU and national levels government these days is not merely incompetent, it’s insane!

  4. DougS says:

    I think that we have to look beyond the incompetence and stupidity displayed by the EU. Nobody of average intelligence would hobble their industries with pointless rules and regulations the way they do.

    The agenda of those pulling the strings is to de industrialise Europe – just as they attempted when, in the seventies, the big scare was ‘global cooling’ leading to another ice age.
    What was the answer back then? To shut down ‘polluting’ industries that were causing the cooling!

    The people who have insinuated themselves into powerful positions have an anti-industry agenda and will not be happy until they’ve destroyed our manufacturing base.

    No wonder they’re furious at the thought of the UK leaving the EU, it’s not just the money that they’ll lose, it’s also the power to regulate. They hate us and they would hate us even more if we left the EU and became, as we undoubtedly would, a much more successful nation without being shackled to the greedy, anti-democratic troughers of the EU.

  5. mrsircharles says:

    Here another reason why we should do anything but continue burning dirty tarsands and fracked gas: Climate Change. Roger Helmer is denying that manmade emissions would cause any significant global warming. He is also dismissing the the scientific consensus on the extent of global warming, its significance, and its connection to human behavior.

    The U.S. National Academy of Science have produced a series of videos providing a basic overview of climate science, it’s is called “Climate Change: Lines of Evidence”. The whole series in one video here:

  6. Joseph Cross says:

    here’s an email I got this morning about CO2 ,********
    STRAIGHT-TALKING AUSSIE….

    Author’s credentials:

    Ian Rutherford Plimer is an Australian geologist, professor emeritus of earth sciences at the University of Melbourne, professor of mining geology at the University of Adelaide, and the director of multiple mineral exploration and mining companies. He has published 130 scientific papers, six books and edited the Encyclopedia of Geology.

    Born12 February 1946
    Residence: Australia
    Nationality: Australian
    Fields: Earth Science, Geology, Mining Engineering
    Institutions: University of New England,University of Newcastle,University of Melbourne,University of Adelaide
    Alma mater: University of New South Wales,Macquarie University
    Thesis: The pipe deposits of tungsten-molybdenum-bismuth in eastern Australia (1976)
    Notable awards: Eureka Prize (1995, 2002),Centenary Medal (2003), Clarke Medal (2004)

    DISCUSSION:

    Where Does Carbon Dioxide Really Come From?

    Professor Ian Plimer explains…

    If you’ve read his book you will agree, this is a good summary.

    PLIMER: “Okay, here’s the bombshell. The volcanic eruption in Iceland . Since its first spewing of volcanic ash it has, in just FOUR DAYS, NEGATED EVERY SINGLE EFFORT you have made in the past five years to control CO2 emissions on our planet – all of you.

    Of course, you know about this evil carbon dioxide that we are trying to suppress – it’s that vital chemical compound that every plant requires to live and grow and to synthesize into oxygen for us humans and all animal life.

    I know….it’s very disheartening to realize that all of the carbon emission savings you have accomplished while suffering the inconvenience and expense of driving Prius hybrids, buying fabric grocery bags, sitting up till midnight to finish your kids “The Green Revolution” science project, throwing out all of
    your non-green cleaning supplies, using only two squares of toilet paper, putting a brick in your toilet tank reservoir, selling your SUV and speedboat, vacationing at home instead of abroad…

    Nearly getting hit every day on your bicycle, replacing all of your 50 cent light bulbs with $10.00 light bulbs….well, all of those things you have done have all been rendered totally useless in just four days…

    The volcanic ash emitted into the Earth’s atmosphere in just four days – yes, FOUR DAYS – by that volcano in Iceland has totally erased every single effort you have made to reduce the evil beast, carbon dioxide.

    And there are around 200 active volcanoes on the planet spewing out this crud at any one time – EVERY DAY.

    I don’t really want to rain on your parade too much, but I should mention that when the volcano Mt Pinatubo erupted in the Philippines in 1991, it spewed out more greenhouse gases into the atmosphere than the entire human race had emitted in all its years on earth.

    Yes, folks, Mt Pinatubo was active for over one year — think about it.

    Of course, I shouldn’t spoil this ‘touchy-feely tree-hugging’ moment being encouraged and mention the effect of solar and cosmic activity and the well-recognized 800-year global heating and cooling cycle, which
    keeps happening despite our completely insignificant efforts to affect climate change.

    And I do wish I had a silver lining to this volcanic ash cloud, but the fact of the matter is that the bush fire season across the western USA and Australia this year alone will negate your efforts to reduce carbon in our world for the next two to three years.

    And it happens every year.

    Just remember that the Australian government just tried to impose a whopping carbon tax on you, on the basis of the bogus ‘human-caused’ climate change scenario.

    Hey, isn’t it interesting how they don’t mention ‘Global Warming’ anymore but just ‘Climate Change’ — do you know why?

    It’s because the planet has COOLED by 0.7 degrees in the past century and these global warming bull artists got caught with their pants down.

    And just keep in mind that you might yet have an Emissions Trading Scheme – that whopping new tax – imposed on you that will achieve absolutely nothing except make you poorer.

    It won’t stop any volcanoes from erupting, that’s for sure.

    But, hey, relax……give the world a hug and have a nice day!”

  7. I read this excellent article in Australia.
    Do you know what? It will simply be dismissed. “97% of all scientists agree that Global Warming is a fact. Therefore we have to save the planet before it burns up. Lalalalalala (with fingers in ears)”.
    The scary thing is that for children inodoctrinated with Global Warming, now in their 30s and now teaching the next generation, this is the nearest thing there is for them to a religion.

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