Thursday, September 3, 2009

Those Were the Good Old Days

August 19th, 2009
Those were the good old days.

Do you folks realize that this September it will be 3 years since the “Gorilla” raised its ugly head and started all this craziness? Remember when there were rumors about an automobile manufacturing plant, a large animal confinement unit, a toxic waste dump, a nuclear power station, an operations center for Homeland Security? Those were the good old days.
We’ve made some mistakes and we’ve made our point, but that was then and this is now. Our final presentation for stopping the air permit is tomorrow and sadly to say, I don’t think it will be successful. However, this lays the groundwork for appeals. Yes, we are going to fight this through the courts.
What you may not realize, if my math is worth a toot, is that some of the options run out at the end of the month, and I think there might be a few surprises. Hyperion is going to have to renegotiate some of these options, buy the property or just let them go. My guess is that they won’t let them go because to renegotiate is not an option when someone like Randy Golden has land for sale at $59,000 an acre.
Hyperion doesn’t have just 3000 acres under options, it has somewhere between 10,000 and 13,000 acres under option. Do you think that might convince a few people that opposing this refinery isn’t such a bad deal after all? I firmly believe that there are those that signed options that once they found out what this was all about regretted doing it. Too soon old, too late smart!
I was in Kansas City last weekend, and happened to mention the Hyperion issue to my eldest, oldest, smartest brother. He said he has been around oil most of his life and doesn’t understand what all the fuss is about. He lived in Texas for almost fifty years, and he has never noticed a bad smell. About 45 minutes later I finished telling my story and he just looked at me and said “you know Doug you can’t stop them if they really want to come. They have more money than you’ll ever imagine and money talks, and b.s. walks.” Part of what he said is true. They have more money than we could ever imagine, but they haven’t come up against people like us before. If it was just a case of money, this would have been a done deal long ago. I firmly believe that Hyperion is out on a limb here and they are cutting the branch off from the wrong end. Has anyone seen or heard from any of the “Big Boys” about this refinery? No, and do you know why? They are just as opposed to Hyperion building a refinery as we are but are just letting nature run its course.
Take this into consideration for a minute. Practically every oil refinery in the United States that is operating is running at about 60% capacity. There isn’t a shortage of oil; there is a shortage of demand. If these companies were operating at capacity, the price of gasoline would be about $1.00 a gallon. Just like everything else in this world, companies operate on supply and demand. To keep the prices up, production must be less than demand. One of the reasons oil is on the commodities market is to control the price and quantity of oil. Price goes down, production goes down. Price goes up, production goes up. Back to my theory. If these big oil companies were to let Hyperion bring in a 400,000 barrel a day refinery, there would be a glut on the market for gasoline products and the price would go down. Besides, Hyperion doesn’t have a market for their product.
As I said in earlier articles, there are only so many Casey’s and Kum & Go’s. They might be independents, but have you ever noticed that they all charge the same price for gas? I wouldn’t be surprised if you were to follow a gas truck, it goes from the Coffee Cup to Casey’s, then over to Pump N Pak. The oil companies not only control the prices, they control the market, and there isn’t any room for another 400,000 barrels a day of product out there.
Conoco Phillips has a deal with Trans Canada for Tar Sands, and the pipeline is already in Nebraska, but their facility at Port Arthur won’t be done for a few years. So where does that put Hyperion? This isn’t a case of “Build it and they will come,” this is a case of it doesn’t do any good to build a refinery if you don’t have anything to refine. I’ve heard, and I don’t have anything to back this up, but if you want to deal with Trans Canada for Tar Sands you have to buy a year’s supply of oil from the get go. There ain’t no way Hyperion has that much money, and I don’t think Trans Canada is going to float them a loan. As I said, I don’t have any proof to back up that statement, but it only makes sense to me. What would happen if 4 years down the road that Hyperion goes broke and the refinery shuts down before it even gets started? Where is all that Tar Sands that Hyperion contracted for going to go? Somebody is going to get stuck, and I can guarantee it won’t be Canada.
“If a frog had wings, it wouldn’t bump its ass on the ground when it hopped around.”


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