lets nationalize a few refineries

[cirrrocco]

One of the problems with these energy companies making massive profits is that, they reinvest all this windfall profits in emerging energy companies. This way they can then control the technology out in the wild and also the cost of new energy.

I hope many smaller players emerge and hopefully prevent themselves from being acquired by the massive energy behemoths.

The world will never be energy independent if that happens

 

[JS80]

When I used to work at Shell and Exxon, the operations manager used to tell me that cost to drill a barrel of oil was about 16 bucks in the US. This was in 2005. They used to sell it back to the parent company [ Shell or Exxon in this case ] for 60 bucks. The market price at that time was about 85 bucks.

so these oil companies open subsidiary companies, and have massive margins when they sell oil to themselves. Then they go back and say that cost to refine that barrel of oil is miniscule and then get subsidies and they don't make any profits on refining. In the meantime they have already made massive profits by drilling and selling the oil to themselves.

crazy I tell ya

These phantom "margins" are eliminated on the financial statement upon consolidation.

Fucking retards some of you guys.

 

[davmat787]

When I used to work at Shell and Exxon, the operations manager used to tell me that cost to drill a barrel of oil was about 16 bucks in the US. This was in 2005. They used to sell it back to the parent company [ Shell or Exxon in this case ] for 60 bucks. The market price at that time was about 85 bucks.

so these oil companies open subsidiary companies, and have massive margins when they sell oil to themselves. Then they go back and say that cost to refine that barrel of oil is miniscule and then get subsidies and they don't make any profits on refining. In the meantime they have already made massive profits by drilling and selling the oil to themselves.

crazy I tell ya

That all happens AFTER the oil deposits are found. Exploration and drilling to find the oil pockets is very expensive and no sure thing. This, in part, is probably why there is the gap between your 16$ cost per barrel and $60 selling point, they have to recoup the expense of finding it in the first place.

 

[zephyrprime]

This would be useless. The high price of gas is due to the high price of crude, not of refining. The US just recently became a net exporter of gasoline.

 

[cirrrocco]

These phantom "margins" are eliminated on the financial statement upon consolidation.

Fucking retards some of you guys.

yeah but they group the FS into Business areas or functional areas. Now the oil comanies only crib abt how low the margins are for refining.

Also they may not even consolidate these companies, let the smaller drilling and exploration companies stand alone with private Financial statements. have the same rich fucks on board from where they gain very nice profits, but then the parent company would not show a lot of income [because they are paying almost market price] for the crude.

I used to work in the accounting dept and so know many of the tricks.

 

[cirrrocco]

That all happens AFTER the oil deposits are found. Exploration and drilling to find the oil pockets is very expensive and no sure thing. This, in part, is probably why there is the gap between your 16$ cost per barrel and $60 selling point, they have to recoup the expense of finding it in the first place.

Dav, the cost includes the cost of exploration and drilling. You think they do not include the cost of exploration into the actual cost. The std cost for a barrel of oil includes indirect labor and services as well.

so it is all factored in.

 

[JS80]

yeah but they group the FS into Business areas or functional areas. Now the oil comanies only crib abt how low the margins are for refining.

Also they may not even consolidate these companies, let the smaller drilling and exploration companies stand alone with private Financial statements. have the same rich fucks on board from where they gain very nice profits, but then the parent company would not show a lot of income [because they are paying almost market price] for the crude.

I used to work in the accounting dept and so know many of the tricks.

The large integrated oil co's have refineries, but looking at stand alone refinery financials reveals they operate on high leverage and low margins. Refining is not a lucrative product line.

 

[werepossum]

This would be useless. The high price of gas is due to the high price of crude, not of refining. The US just recently became a net exporter of gasoline.

Having the government take over refineries would totally fix THAT . . .

 

[cirrrocco]

The large integrated oil co's have refineries, but looking at stand alone refinery financials reveals they operate on high leverage and low margins. Refining is not a lucrative product line.

Oh sorry. I agree refining in itself may not have high margins. I was talking in general about the oil industry and responding to GENX87's post, where he mentioned the crude is the primary cost driver.

 

[bfdd]

lol... they practically already are. Some refineries CANNOT BE SHUT DOWN. The government WILL NOT ALLOW THEM TO BE. They HAVE TO be sold and operated by someone else. Refineries are constantly changing hands between different oil companies.

 

[bfdd]

That's not how the market works. Eventually you have to buy more oil at the higher price.

Let's say you were a farmer growing corn, and you normally sell it for $2 per bushell. If the market price for corn went up to $3 per bushell, would you continue to sell your current stock of corn at the old, lower price just because that happened to be the price when you grew the corn? If you did, everyone would rush out to immediately buy all of your underpriced corn to resale it at the market price, since it would be nearly risk-free profit for them.

Let's say on your farm you happen to have 100 gallons of fertilizer in storage for use next month, that you bought at $2 per gallon, but now the price is $3 per gallon. Now lets say your neighbor farm has run out of fertilizer and wants to buy yours. Are you going to sell him your fertilizer at $2 per gallon, even though it would cost you $3 per gallon to buy more when you need it later? If you did, you would essentially be giving your neighbor farmer free money.

lol he's right and you're wrong. they have supplies of 90 dollar oil, tons of it. they IMMEDIATELY raised the price on gas produced from the cheaper oil to offset costs of rising oil futures. when oil futures came down, they did not IMMEDIATELY drop the price, yet they do a slow stagnated drop in hopes of keeping it semi-inflated which they will justify as "uncertainty of the futures market" which is a load of shit. Don't sit here and defend these shady practices because it's rather obvious to anyone with a clue what the fuck is going on.

 

[desy]

OMG its not shady practices its been done forever!
http://en.wikipedia.org/wiki/Sticky_(economics)
There is whole economic theory around sticky downward prices.

 

[BoomerD]

*gets into devils advocate character*

What if the u.s. purhased and ran a few off line refineries for gasoline? We could call its products "U.S. Gas"

The crude purchased for refinement could be bought off the market at price or brought in from surpluss reserves, and then refined and sold to dealers at a set price with set profit margins ensuring operating costs are covered and minimal profit which could be spent however, maybe R&D or new infrastrucure for alternatives.

Also, only a few stations selling only u.s. gas could be open in each city, keeping local price competition in check but not over run with government business. Especially because supplies have to be limited due to the small amount of refinement capacity.

This would #1 increase competition, #2 help stimulate the economy since no new infrastructre is really necessary other then buying old stations and renovating them, #3 is minimally intrusive to the private sector....so long as the gas sold does not cease to be profitable. #4 how about paying off that big debt in the meantime.....

I dont see how opec or other producing nations would be too opposed because oil is sti bought at market price. And also it would be a good gauge for regular americans what the real cost at the pump should be.

Moat industries are already so comptetitive that the us couldnt possibly get anywhere competiting, but it seems so silly easy to make a quick buck in oil refinement for gas and it makes sense for ciizens.


This of course is assuming oil refining is where we are making very good profit margins in the grand scheme of things

Hell, while you're at it...nationalize all the oil fields in the USA. Make all that oil the property of the people...Let the government "sell" the oil to itself for the cost of production...NOT the world market price. Watch gas prices in the USA drop significantly.

BUT, since the US government is owned by big business, especially big oil, ain't none of that ever gonna happen.

 

[davmat787]

Dav, the cost includes the cost of exploration and drilling. You think they do not include the cost of exploration into the actual cost. The std cost for a barrel of oil includes indirect labor and services as well.

so it is all factored in.

Sorry, I misread you then. When you said "drilling" I took that to mean extraction costs, not exploration as well.

 

[dmcowen674]

Dog and Pony show #2011 commencing

5-12-2011

http://news.yahoo.com/s/ap/20110512...jb3JkaW9uX2J1c2luZXNzBHNsawNvaWxjZW9zaGVhZHQ-

Oil CEOs head to Hill for grilling by Senate Dems



Senate Democrats are calling top executives from the five biggest oil companies before a congressional hearing to flog them verbally for high gasoline prices, big profits and generous tax breaks that Democrats would like to end but don't have the votes to stop.

"Why on earth, when we are supposedly working to reduce the deficit, would we be subsidizing the top five oil companies?" Sen. Robert Menendez, D-N.J., said prior to the hearing Thursday before the Senate Finance Committee.



"It's time for the big five oil companies to give up these subsidies and allow their companies to pay a fair share towards reducing the deficit."

The five companies booked profits totaling $36 billion the first quarter of this year. The Democrats say that with profits that high, the big oil companies wouldn't miss tax breaks that average $2 billion a year.


"These subsidies were passed when the price of oil was $17 a barrel, when you needed some incentive for exploration," said Sen. Chuck Schumer, D-N.Y. "With the price of oil at $100 a barrel, the only thing that keeps them in place is pure politics."


"They ought to be making profits fairly, not with the kind of giveaways that they are receiving now," said Sen. Richard Blumenthal, D-Conn.


Menendez has introduced a bill that would repeal the tax breaks for the five largest oil companies — Shell Oil Co., ExxonMobil, ConocoPhillips, BP America and Chevron Corp. The heads of those companies are scheduled to testify before the Senate Finance Committee.


On Wednesday, ConocoPhillips chairman and CEO Jim Mulva issued a statement saying a tax increase would cost jobs, discourage investment and lead to even higher gas prices.
==============================================
Please, please, please end the subsidies, lay off workers and raise gas to $10. Thank you

 

[Generator]

Refineries? You think to small, already the distinction between banks and government is blurred. Massive corruption, school mate collusion, and they work for both sides unchallenged.

There will no choice but to nationalize the banks. I honestly can't tell you where the private and public institution begins and ends.