Gasoline: The new big U.S. export!

[Fritzo]

The much more relevant question: WHY ISN'T GAS $1.50 a GALLON?

I can't think of anything that would jump start the economy faster. It would make everything less expensive, people would buy more, and everyone would go back to work.

::FRITZO FOR PRESIDENT::

 

[Born2bwire]

Not refine as much?

If we have enough supply that the refiners are exporting gasoline, we don't need to open up places like the AWNR to drilling.

I guess it depends on the details though. Say for example that Canada does not have enough refinery capacity to produce enough gasoline for their needs. So they sell the oil to US refineries and buy back the gasoline. The refineries also have additional products from the oil that they can sell too abroad or domestically (so that doesn't mean that all of the oil used goes back abroad). I don't see this as being different from say India selling cotton to England and then buying the processed material back (ignoring the economic issues with such a trade dependence). If they are using oil produced in the US to refine the gasoline that is sold abroad that would be different. The issue then is how much of the supply that we import is used for refined exports and how much of our domestic production is used for refined exports.

The much more relevant question: WHY ISN'T GAS $1.50 a GALLON?

I can't think of anything that would jump start the economy faster. It would make everything less expensive, people would buy more, and everyone would go back to work.

::FRITZO FOR PRESIDENT::

I know that this is being facetious, but the point is that gasoline demand is not isolated to the US. If the US refineries lowered the price of gasoline domestically to drive up the domestic demand, then this would only increase the foreign demand for gasoline by reducing their supplies (assuming that the reason why gas is being exported is due to economical advantage as opposed to consipiracy/oligarchs). Why then would we expect the refinery to sell a glut of gasoline domestically for $X a gallon when they can economically ship it to another country that will pay $X+Y a gallon?


Personally, this sounds very advantageous to us as it may be a net money maker for us. As long as we can export enough of the refined products from each imported barrel then this serves to help reduce the trade deficit that petroleum induces on the country.

 

[Texashiker]

The much more relevant question: WHY ISN'T GAS $1.50 a GALLON?

I can't think of anything that would jump start the economy faster.

Expensive gas is good for stockholders, its good for companies looking to build new refineries, more refineries means more steel being sold, more jobs in manufacturing and construction.

$3 a gallon might be bad for a lot of stuff, but it helps support a segment of our economy.

If you want to talk about national security, its good to have a surplus, so when our military needs more fuel, its available. Back in 1990 and 1991 the military was having issues getting enough fuel for bombing raids in Iraq. That fuel shortage might have prompted the government to spur companies to build more refineries.

The current gas prices is probably why construction companies have been working steady for the past couple of years.

 

[0roo0roo]

That doesn't make any sense. If we were exporting more than we were importing, why would we be importing anything at all? Oil is oil.. it's not like middle eastern oil is higher quality than american oil.

gasoline is just one product of crude oil...

 

[Wonderful Pork]

The much more relevant question: WHY ISN'T GAS $1.50 a GALLON?

I can't think of anything that would jump start the economy faster. It would make everything less expensive, people would buy more, and everyone would go back to work.

::FRITZO FOR PRESIDENT::

QFT. Maybe not $1.50 a gallon, and it certainly wont magically make everything rosy, but this is sort of like what the diamond industry does.

Make something appear scarce (in this case gasoline in the USA) to keep prices high, and then offload the rest to other places. This way you can still increase pricing during the "peak driving", "hurricane", and whatever else season and turn record profits.

To those saying they aren't causing artificial scarcity, what would happen if they flooded the markets with that excess gas? Prices wouldn't stay the same.

Smart business, absolutely, but kind of a dick move considering the economy. Its a good gig if you can get it.

 

[aigomorla]

Because americans dont like old anything including gas? even tho oil comes from dinosaurs dating million of years ago... 😛

 

[Texashiker]

even tho oil comes from dinosaurs dating million of years ago... 😛

Everyone knows the earth is no more then around 7,000 years old.

 

[dainthomas]

$3 a gallon might be bad for a lot of stuff, but it helps support a segment of our economy.

At the expense of things like, every OTHER segment of the economy.

If gas went down $1.50, I would have an extra $100 or more per month easily. And I would probably spend all of that somewhere. So would most people. Sure it would suck for Wyoming or the gulf coast, but it would be great for everyone else.

 

[midwestfisherman]

The much more relevant question: WHY ISN'T GAS $1.50 a GALLON?

I can't think of anything that would jump start the economy faster. It would make everything less expensive, people would buy more, and everyone would go back to work.

::FRITZO FOR PRESIDENT::

+1

Hell even 2.50 per gallon would help!

 

[ElFenix]

At the expense of things like, every OTHER segment of the economy.

If gas went down $1.50, I would have an extra $100 or more per month easily. And I would probably spend all of that somewhere. So would most people. Sure it would suck for Wyoming or the gulf coast, but it would be great for everyone else.

great, it won't. it's a globally traded commodity and demand anywhere affects pricing everywhere.



thank god we're exporting something other than shitty movies and shittier music.

 

[dmcowen674]

Gasoline: The new big U.S. export!

NEW YORK (CNNMoney) -- The United States is awash in gasoline. So much so, in fact, that the country is exporting a record amount of it.
The country exported 430,000 more barrels of gasoline a day than it imported in September, according to the U.S. Energy Information Administration.
That is about twice the amount at the start of the year, and experts and industry insiders say the trend is here to stay.


The United States began exporting gas in late 2008. For decades prior, starting in 1960, the country used all the gas it producedhere plus had to import gas from places Europe.


But demand for gas has dropped nearly 10% in recent years. It went from a peak of 9.6 million barrels a day in 2007 to 8.8 million barrels today, according to the EIA.



http://money.cnn.com/2011/12/05/news/economy/gasoline_export/index.htm?hpt=hp_t2

Shens

The Republican Oil and Gas supporters in here swear for years that there is no capacity for such a thing because there hasn't been a new refinery built since 1979 and that it's all the tree huggers and Democrats fault for that.

 

[dmcowen674]

sonoco is closing down it's philadelphia refinery.

They started the layoffs last week.

They claim no money in making gasoline.

:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d

 

[Anarchist420]

The much more relevant question: WHY ISN'T GAS $1.50 a GALLON?

I can't think of anything that would jump start the economy faster. It would make everything less expensive, people would buy more, and everyone would go back to work.

::FRITZO FOR PRESIDENT::

Because we have a weak currency, because of problems started by the US in the middle east, and because of land and water socialism. OPECountries own the land, so they make agreements with the largest oil companies and that drives prices up.

There is a lot more oil in the world than the liberals (who keep the world dependent on high priced oil because they believe in socialism and because they're destroying market efforts to make an alternative) would like people to believe.
Bush also increased oil prices by making the SPR and hoarding it. I'm pretty sure that the emergency he said it could be used for will be created by the U.S.
http://mises.org/daily/5111

 

[Darwin333]

You can sell imports for more? Maybe it's like beer.

We import oil, refine it into gas, and then export it for a profit.

Not sure about this years increase but in the past a large portion of our gas exports were to Mexico who is also our 2nd largest supplier of oil.

 

[zoiks]

So why the fuck do we complain about our dependency on foriegn oil?
The real assholes are the oil company execs here.

 

[Texashiker]

Shens

The Republican Oil and Gas supporters in here swear for years that there is no capacity for such a thing because there hasn't been a new refinery built since 1979 and that it's all the tree huggers and Democrats fault for that.

Not sure if serious.

The old Texaco refinery in Port Arthur Texas is close to 6 miles in diameter. The plant has been bought, sold, divided up, name changed,,, over the past few decades.

In the 1980s and 1990s certain parts of the plant were outdated and were no longer profitable, so those parts were dismantled.

A few years later, Motiva (the new owner of the old Texaco plant) decided to go into production of new chemicals. So a new unit was built where the old unit once stood.

While new refineries as a whole might not be being built, the existing plants are being upgraded all the time.

Take the old Fina refinery in Groves Texas (now called BASF). Back in the 1990s they built a MASSIVE add-on. Since the new unit was an add-on to the existing refinery, I doubt it would be considered a whole new refinery.

 

[Darwin333]

Because we have a weak currency, because of problems started by the US in the middle east, and because of land and water socialism. OPECountries own the land, so they make agreements with the largest oil companies and that drives prices up.

There is a lot more oil in the world than the liberals (who keep the world dependent on high priced oil because they believe in socialism and because they're destroying market efforts to make an alternative) would like people to believe.
Bush also increased oil prices by making the SPR and hoarding it. I'm pretty sure that the emergency he said it could be used for will be created by the U.S.
http://mises.org/daily/5111

Bush didn't "make" the strategic oil reserve and when a very large portion of our oil comes from an area that is very unstable it seems to be a good idea for us to have some extra on hand for .mil use just in case we get cut off somehow in the middle of a war.

All of that fancy military hardware becomes rather useless without gogo juice.

You can make a lot of reasonable arguments on why oil/gas prices are so high but the strategic reserve isn't one of them.

 

[Darwin333]

So why the fuck do we complain about our dependency on foriegn oil?
The real assholes are the oil company execs here.

Sigh....

US to Mexico "Hey guys, we would really like to buy that spare oil you got there"

Mexico to US "We have plenty of oil to spare but we really need refined product"

US to Mexico "How about you send us some extra oil and we will refine it for you and send it back?"

Mexico to US "You got yourself a deal!"

 

[OVerLoRDI]

The price of gasoline is still high because the price of oil is still quite high. It actually just climbed over $100 a barrel recently. Every gallon of gasoline refined requires X amount of oil, and that oil costs a lot. So even if the US is refining more gasoline than we need, the input cost per unit of gasoline is still high.

Also, if we happen to have spare refining capacity and there is demand for gasoline elsewhere in the world, why shouldn't we export it?

 

[CLite]

At the expense of things like, every OTHER segment of the economy.

If gas went down $1.50, I would have an extra $100 or more per month easily. And I would probably spend all of that somewhere. So would most people. Sure it would suck for Wyoming or the gulf coast, but it would be great for everyone else.

Federal tax: 18.4 cents
NJ (my state) tax: 14.5 cents
(from how stuff works.com)
distribution: ~8 cents
refining: ~14 cents
crude cost = 100/42 = $2.38

total price without profit: $2.92

ok.... so you want the refiners to lose $1.42 on every gallon of gas they produce just because their capacity exceeds local demand? People are incapable of thought at times and it's really annoying.

Also people need to stop confusing crude oil with gasoline (which happens to be just one of the many refined products).

 

[airdata]

Why not just cut down on IMPORT?

That would make sense.... and we don't do things that make sense in this country.

 

[CLite]

That would make sense.... and we don't do things that make sense in this country.

You like many others in this thread are probably confusing gasoline and crude.

The main region that imports gasoline in the USA is the East coast because of the arbitrage with European producers who usually have excess gasoline because of the high demand for diesel there. Beyond such localized situations where the arbitrage is favorable there is no import of gasoline.

A little more on the east coast situation:
In addition to arbitrage from European producers the east coast refiners have to deal with Brent prices which are much higher than crudes available to the gulf coast. This is why refiners are shutting down east coast refineries, rather than it being a giant conspiracy where multiple competitors are colluding.

 

[BoomerD]

Bush didn't "make" the strategic oil reserve and when a very large portion of our oil comes from an area that is very unstable it seems to be a good idea for us to have some extra on hand for .mil use just in case we get cut off somehow in the middle of a war.

All of that fancy military hardware becomes rather useless without gogo juice.

You can make a lot of reasonable arguments on why oil/gas prices are so high but the strategic reserve isn't one of them.

Don't try to confuse Anarchist with the facts. They don't fit into his reality...

BUT, FWIW, the SPR has been around since the OPEC-caused gas crisis in the early 1970's...

http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States)

The SPR was created following the 1973 energy crisis. The EPCA of December 22, 1975, made it policy for the U.S. to establish a reserve up to one billion barrels (159 million m³) of petroleum. A number of existing storage sites were acquired in 1977. Construction of the first surface facilities began in June 1977. On July 21, 1977, the first oil—approximately 412,000 barrels (65,500 m3) of Saudi Arabian light crude—was delivered to the SPR. Fill was suspended in FY 1995 to devote budget resources to refurbishing the SPR equipment and extending the life of the complex. The current SPR sites are expected to be usable until around 2025. Fill was resumed in 1999.

Bush merely authorized and directed that the SPR be filled to its capacity of one billion barrels.

On November 13, 2001, President George W. Bush announced that the SPR would be filled, saying, "The Strategic Petroleum Reserve is an important element of our Nation's energy security. To maximize long-term protection against oil supply disruptions, I am directing the Secretary of Energy to fill the SPR up to its 700 million barrel [111,000,000 m³] capacity."[2] The highest prior level was reached in 1994 with 592 million barrels (94,100,000 m3). At the time of President Bush's directive, the SPR contained about 545 million barrels (86,600,000 m3). Since the directive in 2001, the capacity of the SPR increased by 27 million barrels (4,300,000 m3) due to natural enlargement of the salt caverns in which the reserves are stored. The Energy Policy Act of 2005 has since directed the Secretary of Energy to fill the SPR to the full 1-billion-barrel (160,000,000 m3) authorized capacity, a process which will require a physical expansion of the Reserve's facilities.
On August 17, 2005, the SPR reached its goal of 700 million barrels (110,000,000 m3), or about 96% of its now-increased 727-million-barrel (115,600,000 m3) capacity. Approximately 60% of the crude oil in the reserve is the less desirable sour (high sulfur content) variety. The oil delivered to the reserve is "royalty-in-kind" oil—royalties owed to the U.S. government by operators who acquire leases on the federally owned Outer Continental Shelf in the Gulf of Mexico. These royalties were previously collected as cash, but in 1998 the government began testing the effectiveness of collecting royalties "in kind" - or in other words, acquiring the crude oil itself. This mechanism was adopted when refilling the SPR began, and once filling is completed, revenues from the sale of future royalties will be paid into the federal treasury.
On April 25, 2006, President Bush announced a temporary halt to petroleum deposits to the SPR as part of a four point program to alleviate high fuel prices.[citation needed]
On January 23, 2007, President Bush suggested in his State of the Union speech that Congress should approve expansion of the current reserve capacity to twice its current level.[8]
In April 2008, Speaker Pelosi called on President Bush to suspend purchases of oil for the Strategic Petroleum Reserve (SPR) temporarily.
On May 12, 2008, Rep. Peter Welch (D, Vermont) and 63 co-sponsors introduced the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act bill (H.R.6022), to suspend the acquisition of petroleum for the Strategic Petroleum Reserve.[9]
On May 16, 2008, the U.S. Department of Energy said it would halt all deliveries to the Strategic Petroleum Reserve sometime in July. This announcement came days after Congress voted to direct the Bush administration to do the same. The U.S. Department of Energy did not state when the shipments would resume.[10]
On May 19, 2008, President Bush signed the Act passed by the Congress, which he previously opposed.[11]
On January 2, 2009, the U.S. Energy Department said that it would begin buying approximately 12,000,000 barrels (1,900,000 m3) of crude oil to fill the Strategic Petroleum Reserve, replenishing supplies that were sold after hurricanes Katrina and Rita in 2005. The purchase will be funded by the roughly $600 million received in 2005 from the emergency sales.

 

[Darwin333]

That would make sense.... and we don't do things that make sense in this country.

Why exactly would that make sense?

 

[bfdd]

We should be exporting fuel, but only when our needs are met and we can get a fair price on the international market.