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The truth about high gas prices and the so called "refinary" bottleneck...
Since 1990, US oil consumption has only increased about 3.7 million barrels.
http://tonto.eia.doe.gov/dnav/pet/hist/mttupus2a.htm The last 5 years has been fairly consistent with a slight 1 million barrel increase. http://tonto.eia.doe.gov/dnav/pet/pe...s_mbblpd_a.htm Current refinaries are ONLY running 80%-85% of capacity http://tonto.eia.doe.gov/dnav/pet/pe..._dcu_nus_w.htm Internal Chevron document, November 30, 1995 A senior energy analyst at the recent API (American Petroleum Institute) convention warned that if the U.S. petroleum industry doesn’t reduce its refining capacity, it will never see any substantial increase in refining margins… However, refining utilization has been rising, sustaining high levels of operations, thereby keeping prices low. Internal Texaco document, March 7, 1996 As observed over the last few years and as projected well into the future, the most critical factor facing the refining industry on the West Coast is the surplus refining capacity, and the surplus gasoline production capacity. The same situation exists for the entire U.S. refining industry. Supply significantly exceeds demand year-round. This results in very poor refinery margins, and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline. Taken from the Wyden report of 2001. In the mid-1990s too much refining capacity, not too little, concerned the nation’s major oil companies. At that time, the oil and gas industry faced what they termed “excess refining capacity,” a circumstance they viewed as a financial liability that drove down overall profit margins. The industry reduced the total amount of potential supply by closing down more than 50 refineries in the past decade. Since 1995 alone, 24 refinery closings have taken nearly 830,000 barrels of oil per day. On June 11, 2001, the Wall Street Journal reported that Marathon Ashland Petroleum intentionally withheld reformulated gasoline supply in the Midwest in a contrived effort to keep prices, and profits, artificially high.3 Although Marathon was reported to have operated alone in this instance, documents suggest that over the past five years other leading oil companies have worked together to control the amount of gasoline available on the market. There's more... Read it yourself... http://wyden.senate.gov/issues/wyden_oil_report.pdf |
So you're saying.. they lowered the supply to squeeze as much as they could in relation to the demand? Fuck. That study probably only cost us a couple bajillion, too.
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They are making 5x the ammount of profit selling less petrolium then they used too. |
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For a group of people who scream "I DEMAND $75+ PPS AND BONUSES!" the moment someone opens a program using CCBill and a $20 Kodak (and a drunk girlfriend), they sure bitch a lot when a large corporation bites down. I'm not happy about it, but I can identify with it: They're, get this, for profit. I don't agree with their methods, but they've got more money than I do, and I need their product. Thus, the vicious circle continues. :Oh crap |
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Wait where's Fluffy to tell us that corporations conspiring is all in our minds. lol
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Should invest a few k$ in OIL, last year results are amazing..
And forecasts are looking juicy :) |
Yet we still pay less than Europe. Go figure.
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its so fucked
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Surprised to see this here. I read about this last year.
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i wish we would make a refinery her.e.and tell opec to suck balls..free trade is for the people on the best receiving end
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the oil companies just need to make all their profits before "alternative energy" sources become mainstream. they've been trying to stifle alternative energy for awhile now, but because of global warming and all that save the earth stuff they see that it won't last for long. so they are finding ways to charge us up the ass before oil isn't the most demanded source of energy.
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By the way only us, China and Japan use more than that 3.7 million barrel difference. Germany is #4 and only uses a TOTAL of 2.65 million barrels a day. |
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Always nice to read "internal documents" of dubious origin and skimmings from congressional reports.
More's the point, the US hasn't been building new refineries, nor seriously fixing old ones, for upwards of 30 years, in part because of millitant environmentalists, in part because why the fuck will they ? It's risky and expensive and the economics of 1970-2000 didn't justify it. As to the 80-85% capacity issue - a refinery is a complex piece of machinery, and while it may have the theoretical ability to process x barels a year, going at y barels a day, you will never get that, because for a variety of reasons, repairs, safety inspections, etc, you will have to close it down sometime. To understand this, try having your car do it's maximum stated speed for one year running. Also, the opec has nothing to do with the oil run atm. Back when they tried, they managed to get it from 20 to 50 and people were oh so impressed. Now chinese/indian demand has taken it from 30 to 120 and somehow nobody understands... The chinese already own most of your stuff, they make most of your stuff, and they don't actually need you, your notions about freedom, your porn, your consultancy or your services. So, we're going back to where it was in 1800s, where the brits couldn't for the life of them find anythign of value to offer in trade to the empire that "made everything that's good and useful under the sky". Buckle up. |
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My point is that ther HAS been a huge increase. When our increase alone in more than what everyone but 2 other countries use that's A LOT. Also that's 22% increase since 1990. Your math skills suck. And ther HAS been a huge increae in demand. Why in the fuck do you think gas is $3.60 a gallon? Hmmm let's see 2007 20,698,000 barrels supplied daily 2004 20,731,000 barrels supplied daily So we have LESS supply than we did 3 years prior and you wonder why gas is so high? |
Its all about the dollar being in the toilet... :pimp
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I love how people think gasoline is a government provided entitlement or something.
Its a product sold by private multi-national corporations for profit. They maximize profit just to the point where it would kill off the market demand. |
dear geniuses, the price of a barrel of oil is $120ish last I looked.
refineries have ZERO to do with that. power to the people! |
Get rid of the current administration, and see if someone new fixes the issue. Lower the price by 50cents a gallon, and make it steady, and every one will be happy.
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And as of yesterday East coast refining margins were only about 1/3 of what they were in the 2nd quarter of 2007. To repeat once again refiners margins are being squeezed. Valero, the largest US refiner, just reported profits that were down 77%. The money is being made right now in oil and natural gas Exploration and Production. |
I fucking hate big oil.
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Fact: Gasoline is the most widely consumed commodity where the people who use it have little to no understanding of how it gets from the bottom of the ocean to their gas tank.
The irony is that because people are so familiar with it, they THINK they understand it. Kinda like the engine in your car.. lots of people don't understand how an internal combustion engine works.. yet they use it every day. |
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http://www.amazon.com/Your-Money-Bra...72501&sr= 8-1 |
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Also, while there haven't been new refineries built in quite some time, existing refineries have been expanded substantially so that our overall refining capacity is much larger than it was 20 years ago. |
In the news today ...
JAKARTA: President Susilo Bambang Yudhoyono of Indonesia said Tuesday that his country was considering quitting OPEC because it was no longer a net oil exporter. "Our wells are drying," he said in a nationally televised speech, adding that the country needed to concentrate on increasing domestic production, which has dropped to less than a million barrels a day even as consumption rises. The government opened talks Monday on whether it should continue to stay with the Organization of Petroleum Exporting Countries or withdraw "until we reach a point where we deserve to rejoin that organization," Yudhoyono said. The country of 235 million people is the only OPEC member in Southeast Asia. But it has to import oil following decades of declining investment in exploration and extraction because of corruption and a weak legal system that makes oil companies wary of doing business in Indonesia. Indonesian oil output has declined steadily from the 1.5 million to 1.6 million barrels produced a day in the mid-1990s. It produced around 860,000 barrels a day of crude oil last month and recorded a deficit of $794 million in its oil trade accounts. Raising output could take "one to three years," Yudhoyono said |
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I named it the "Familiarity Paradox" :upsidedow It's so true though, people feel like they should understand the price of the gas they put in their car everyday.. but, really.. they don't.. and most don't even have the capacity to underdstand at all. Hence all the layman's "conspiracy" or "price gouging" theories.. they just project what they do know into it.. so, since most people have a simplistic view of the economy.. they reflect that onto a complex market like Gasoline. They understand things on a transactional level.. I think people actually believe there is a secret room somewhere.. where a bunch of people sit around and adjust the price of gas at their gas stations to make the most profit.. or that gas station retailers somehow control the price of gasoline.. even though they are just retailers.. the lowest rung on the totem pole. |
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And yes, that's where the important decisions are made :thumbsup |
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Saying we're currently better off than them is like saying a man who lives in a shack is better off than a man who lives on a park bench. Methinks we would do well to aim just a tad higher than either :thumbsup |
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Valero Energy?s profit tumbles 77 percent ConocoPhillips refining profit drops 47% Exxon Mobil profits hit by refining margins |
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If the credibility of sources was irrelevant, I could argue anything I wanted as well. The article quotes testimony from the guy who is the head of citizen.org, a clearly radical special interest group. He presents and argument which is loosely supported, cherry picking facts from different books and articles, with a few statistics sprinkled in. I wrote a better paper on German Hyperinflation after the First world war in 2nd year university. But alas, it's on the internet so it must be a) true and b) valid. |
Looks like it is time to open a refinery.
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How much more refined product you need?
Today's news. "Motor gasoline supplies climbed 800,000 barrels to 211.9 million barrels last week, EIA said." and ... "total petroleum stocks up 15 million barrels in the last three weeks and gasoline stocks well above normal". Yet crude over $123 and natural gas at $11.32. Doesn't matter how many refineries you have if crude is at $123 gas has to be priced for profit. So why is oil so much per barrel right now? I'd suspect a good deal of speculation on top of some long-term supply and demand concerns and political issues. Speculation: Lots of hot money, hedge funds, commodity and energy bulls, Goldman Sachs report (and many others) Political issues: Middle East, Nigeria, the backlash against ethanol. Supply and Demand: Matthew Simmons hypothesis, peak oil, Russia possibly hitting peak oil, news out of Indonesia today of production declines, the world using more and more energy. |
the price of crude oil more than makes up for that
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For all of those of you who genuinely need wheels to get to work, etc. please skip this next part, it's not directed at you.
The rest of you who ran out and bought those massive gas-sucking SUVs and sports cars with 2 miles to the gallon, I'm overwhemingly amused at your misfortune. You deserve it. |
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There is no wand waving but they have more influence over the prices in their own market compared to others. |
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You need to be selling youself the oil to make it profitable. :Oh crap |
bah screw it
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yep this is true, squeezing the supply
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A significant part of the problem is that the value of the dollar has been dropping the last few years. Lets not forget that.
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Don't think the oil companies would collude together to drive up all of their profits? You're delusional.. US history alone is filled with corporations "conspiring" to gouge the consumers... If that wasn't the case, there wouldn't be antitrust laws etc. Here's one for ya.. 1995 secret meetings in hotel in Atlanta to http://www.usdoj.gov/atr/public/speeches/212266.htm The first tape segment captures this lawlessness and the contempt that the members of the cartel have for law enforcement and their victims. The meeting that you are about to see was attended by executives from the world's five dominant lysine producers. As you will see in this tape, the cartel members took steps to conceal their meeting, including staggering their arrival and departure times for the meeting so as not to arouse suspicion by having the entire group enter and leave the room at the same time. The members of the cartel had to be careful because the meeting coincided with the largest poultry industry trade association convention, so all of their customers were in town for the trade show. But, as you will see, the lysine executives laughed at the thought of being observed by their customers or by law enforcement. The videotaped recording of this meeting shows that, as the meeting begins, there are some empty seats around the table because of the staggered arrival times. The cartel members are captured on tape jokingly discussing who will fill those empty seats. One cartel member offered that one empty chair was for Tyson Foods, the largest purchaser of lysine in the United States, and that another chair was for ConAgra Foods, also a large U.S. customer. Another cartel member mocked, ironically, that one chair was for the FBI, and a third cartel executive added that the remaining chairs were for the Federal Trade Commission. Or how about Roche Holding which participated in an illegal price fixing cartel for vitamins, with BASF and Rhone-Poulenc SA. http://en.wikipedia.org/wiki/Hoffmann-La_Roche A "Textbook" Example - The Vitamin Cartel. Implementing a volume-allocation agreement to restrict output and maximize the incentives of the cartel members to sell at or above the agreed-upon price was at the core of the vitamin cartel, where agreements were reached on everything from how much product each company would produce, which customers they would sell it to, and at what price they would sell it. As with lysine, graphite electrodes, and other cartels, the vitamin conspiracy was not limited merely to a few products, customers or currencies; rather, the cartel members discussed and agreed upon prices and sales volumes for every major vitamin used for human or animal consumption sold throughout the world. http://www.justice.gov/atr/public/speeches/3981.htm or how about ....participated in a conspiracy among certain DRAM producers and their officers and employees in the United States and elsewhere to raise and stabilize the price of DRAM sold to certain OEMs from on or about April 1, 2001, to on or about June 15, 2002. Or how about the fact that the oil companies are pretty much the source of the US antitrust laws to begin with? http://www.linfo.org/standardoil.html Do you truly believe that the current oil companies don't collude together? Seriously? |
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There are a LOT of factors that go into the current price of gas and oil.. They're different though.. The point of my intial post was to point out that the refinary excuse that is being thrown around is a false one.. It's being used to deflect attention and as propganda so that it can be justified to give the oil companies money or lax laws to build more refinaries etc. etc. etc. |
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