Oil Refiners See Profits Sink as Consumption Falls

DealMonkey

Lifer
Nov 25, 2001
13,136
1
0
I think we're hitting an interesting tipping point in gas prices. They've finally reached a level where the average consumer is now cutting back. Once demand starts to ebb, refiners can no longer continue passing on the cost of skyrocketing crude prices to consumers, because it will simply spur more conserving, thus driving down demand even further.

It's hard to feel sorry for them, really it is.

Oil Refiners See Profits Sink as Consumption Falls

While drivers are facing sticker shock at the pump these days, here is a bigger shock: high prices are putting a strain on oil refiners.

After last year?s stellar profits, American refiners are going through a traumatic period. In a time of record gasoline prices, some of them actually lost money in the first quarter, and for virtually all refiners, profits are down sharply.

Experts say the refiners are caught in a double bind. The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve.

However much the companies would like to raise gasoline prices enough to pass along the full increases in oil, analysts say they have been unable to do it. Oil prices doubled in the past year, while wholesale gasoline prices rose a mere 39 percent.


?Refiners are having a terrible time,? said Lawrence J. Goldstein, an economist at the Energy Policy Research Foundation.

For decades, global oil prices were tightly coupled to the ups and downs of the American economy. But in recent years, world oil prices have been pulled upward by heavy demand for diesel fuel from developing countries like China. American economic growth weakened in the last few months, but that has mattered little in the upward march of oil prices.

?What we see at the gasoline pump is increasingly driven by what is happening elsewhere in the global economy,? said Daniel Yergin, the chairman of Cambridge Energy Research Associates, a consulting firm.

Gasoline prices rose on Tuesday to a nationwide average of $3.73 a gallon, according to AAA, the automobile club. That is yet another record. Diesel prices also set a record, at $4.39 a gallon. Crude oil futures closed at $125.80 a barrel, up $1.57, or 1.3 percent, on the New York Mercantile Exchange.

In its latest monthly report, the International Energy Agency, an adviser to industrialized countries, reduced its forecast for global oil demand for this year, as consumption drops by a bigger-than-forecast 300,000 barrels a day in the developed world.

But that decline will be more than offset by growth from developing countries. Consequently, global consumption is expected to rise this year by 1 million barrels a day, to 86.8 million barrels a day. Nearly all that growth will come from China, the Middle East and Russia.

In the United States, there is no longer much doubt that consumers are responding to higher fuel costs by driving less. Oil consumption fell by 3.3 percent in March, compared with March of last year.

But even as gasoline demand softens, the price keeps rising, driven by higher oil prices. The cost of oil represents about 75 percent of the price of gasoline at the pump, according to the Energy Department; state and federal taxes account for 12 percent, and refining and distribution make up the rest.

The rising oil prices have led to a sharp drop in refining profit margins, or the difference between the cost of oil and the cost of gasoline. These margins, at $12.45 a barrel on average, are 60 percent below their year-ago level, and in the lower half of their five-year range, according to a report by UBS.

In response to falling gasoline demand and rising costs, refiners have cut their production rates. Refining utilization rates, for example, slumped to a low of 81.4 percent in the second week of April, compared with 90.4 percent at the same time last year. Earlier this month, refineries were running at 85 percent of their capacity.

All this has translated into a tough quarter for some refiners. While large integrated companies, like Exxon Mobil, reported big profits in the first quarter thanks to their oil sales, smaller independent refiners that buy their oil, instead of producing it themselves, have been losing money.

Tesoro, Sunoco, and United Refining all posted losses in the first quarter. The hardest hit have been small refineries that tend to process the most expensive types of crude oil into gasoline. Sunoco, for example, lost $123 million in the first quarter, while Tesoro posted a $82 million loss for that period, in contrast to a profit of $116 million last year.

?We?re just not able to pass along the increased cost of crude oil on the gasoline side,? said Lynn Westfall, the chief economist at Tesoro.


At Valero, the nation?s largest independent refiner, first-quarter profit melted by 76 percent. Its refining capacity allows it to process heavier grades of crude oil that typically trade at a discount. Still, its profit dropped to $261 million in the first quarter compared with $1.1 billion last year.

Some consumer advocates say they are deeply suspicious about the behavior of refiners who are sharply cutting production at a time of record gasoline prices.

?They are not sitting in a boardroom and colluding, but they can see easily enough where their benefit lies, and it doesn?t lie in a price war,? said Judy Dugan, the research director at Consumer Watch. ?In a truly competitive market, you might see some of these providers try to improve their market share by reducing prices. But this is not happening. They are all better off by restricting production to keep prices up.?

Mark Cooper, director of research at the Consumer Federation of America, said mergers in the 1990s had cut the number of refiners in the country and contributed to reduced competition in the refining market.

?We let them accumulate market power through the wave of mergers, and we?ve been paying the price in the last five years,? he said. ?If there is a small number of players in the market, they learn from each other?s behavior.?

The demand for diesel has been one of the main drivers of oil demand in recent years. Diesel and other so-called middle distillates are used as transportation, power generation and industrial fuels.

In China, for example, oil imports have surged in recent weeks, a signal that the government is stockpiling oil and diesel in anticipation of the Olympic Games. Beijing, the International Energy Agency report said, is seeking to avoid a repeat of the embarrassing fuel shortages and power disruptions that plagued the country last year.
NYTimes.com

Perhaps the answer is to move operations to countries where demand is steadily rising - China, the Middle East and Russia?
 

dphantom

Diamond Member
Jan 14, 2005
4,683
268
126
This is one of the chief reasons we have seen no new refineries in a long time. The margins are simply to small to justify inverstment in a refinery. Another indication the commodity market has seriously overpriced crude (even taking into account increased usage by BRIC) and we should see a crash sometime similar to the dot com bubble.
 

techs

Lifer
Sep 26, 2000
28,561
3
0
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.
 

nonameo

Diamond Member
Mar 13, 2006
5,949
2
76
Wow - I guess we can expect to see these smaller refineries get swallowed up by the larger ones, or the conglomerates.
 

techs

Lifer
Sep 26, 2000
28,561
3
0
Originally posted by: techs
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.

Wow - I guess we can expect to see these smaller refineries get swallowed up by the larger ones, or the conglomerates.
You mean bought out and shut down, don't you? After all, its necessary to buy out your competitors and shut them down so you can cause a shortage which means you make more money.
Its the capitalist way.
 

Robor

Elite Member
Oct 9, 1999
16,979
0
0
Originally posted by: techs
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.
Damn, techs. Don't hold back. Tell us how you really feel! ;)
 

techs

Lifer
Sep 26, 2000
28,561
3
0
Originally posted by: Robor
Originally posted by: techs
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.
Damn, techs. Don't hold back. Tell us how you really feel! ;)
Don't get me started.....

 

Sinsear

Diamond Member
Jan 13, 2007
6,435
79
91
And I'll still drive my SUV either way. I'm way over gas prices.

/shrug
 

DealMonkey

Lifer
Nov 25, 2001
13,136
1
0
Originally posted by: Sinsear
And I'll still drive my SUV either way. I'm way over gas prices.

/shrug
How much is it costing you to fill up these days?

I was doing the math in my head the other day. For a hypothetical GMC Yukon Denali owner, with a 26-31 gal tank, at present California prices for premium gas, you're looking at: 28.5 gal tank (avg) x $4.25/gal for premium unleaded = $121.12 per fill up.

Imagine if someone actually commuted to work in such a vehicle! Yikes!
 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
Originally posted by: techs
Originally posted by: techs
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.

Wow - I guess we can expect to see these smaller refineries get swallowed up by the larger ones, or the conglomerates.
You mean bought out and shut down, don't you? After all, its necessary to buy out your competitors and shut them down so you can cause a shortage which means you make more money.
Its the capitalist way.
Arguing with yourself again, huh? You really should take those pills the nice doctor-man gave you.
 

WHAMPOM

Diamond Member
Feb 28, 2006
7,628
182
106
We have independent refineries? Thought the last one closed years ago. Only losing money on paper, notice the oil COs are still making a profit, they are pumping their own wells at a cost of $5.00 a barrel.
 

Fingolfin269

Lifer
Feb 28, 2003
17,948
31
91
Originally posted by: WHAMPOM
We have independent refineries? Thought the last one closed years ago. Only losing money on paper, notice the oil COs are still making a profit, they are pumping their own wells at a cost of $5.00 a barrel.
Making a profit is not good enough in the corporate world. It's all about past performance. If you made $10 two years ago and $9 last year did you really have a good year?
 

daishi5

Golden Member
Feb 17, 2005
1,196
0
76
Originally posted by: techs
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.
I really wish I could resist doing this, but could you please explain to me how a reduction in demand that causes oil companies to reduce output proves whatever point it is your trying to make? I mean, A I really am not sure what you mean, and B, a reduction in demand leads to a reduction in output seems like the natural response no matter what your capacity for production.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
Originally posted by: techs
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
H
AHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


THIS SHOULD JUST SHUT UP THE LYING B*STARDS WHO KEEP CLAIMING GAS IS SO HIGH BECAUSE WE NEED MORE REFINERIES.
THIS THREAD WILL NOW BE SAVED AND SHOVED DOWN THE THROATS OF THE RIGHT WING WACKOS, NEO-CONS, REPUBLICANS AND ENVIRONMENT HATERS WHO KEEP CLAIMING THE THOROUGHLY DISCREDITED, BUT CONTINUALLY QUOTED BY BUSH, LIE THAT IT IS THE ENVIRONMENTAL ACTIVISTS WHO ARE THE REASON THERE AREN'T MORE REFINERIES.
GUESS WHAT? THERE IS AS MUCH REFINING CAPACITY AS NEEDED AND BUSINESSES THAT LOSE MONEY DON'T BUILD MORE CAPACITY JUST SO THEY CAN LOSE MORE MONEY.
Who cares? We already have all your money - you're the one who lives in a town that can't support a Home Depot. Hell, from the looks of your post, you can't even afford a Caps Lock key. Meanwhile, the evil stockowners of Valero (NYSE - VLO) are up 400% over the last five years, and almost 5,000% (that's 50 times) in the last 20.
 

fallout man

Golden Member
Nov 20, 2007
1,787
0
0
Originally posted by: LTC8K6
NYT? I'll wait 48 hours to see if the story is accurate.
This story is pure malarkey!

Our Dear Leader has debunked it single-handedly:



Saudi oil output hike would not solve US problems: Bush

May 17 10:04 AM US/Eastern

US President George W. Bush said on Saturday that a hike in oil output by Saudi Arabia would not solve American energy problems.

"It's not enough, it's something but it doesn't solve our problem," Bush told reporters in Egypt's Red Sea resort of Sharm el-Sheikh.

Bush said he was "pleased" with a Saudi decision taken on May 10 to increase its oil production by 300,000 barrels per day in response to customers, but said that he was "also realistic" about what the Americans should do.

"Our problem in America gets solved when we aggressively go for domestic exploration. Our problem in America gets solved if we expand our refining capacity, promote nuclear energy and continue our strategy for the advancing of alternative energies as well as conservation," he said.

"One interesting thing about American politics these days is those who are screaming the loudest for increased production from Saudi Arabia are the very same people who are fighting the fiercest against domestic exploration, against the development of nuclear power and against expanding refining capacity."

Bush was in Egypt for talks with Palestinian leaders and to address the Middle East World Economic Forum which brings together 1,500 people, including heads of state, business leaders and ministers from 55 countries.
DRILL DRILL DRILL DRILL DRILL DROOL DROOL DROOL...

I see where this is going.
 

BoomerD

No Lifer
Feb 26, 2006
59,855
8,077
136
Originally posted by: fallout man
Originally posted by: LTC8K6
NYT? I'll wait 48 hours to see if the story is accurate.
This story is pure malarkey!

Our Dear Leader has debunked it single-handedly:


Saudi oil output hike would not solve US problems: Bush


DRILL DRILL DRILL DRILL DRILL DROOL DROOL DROOL...

I see where this is going.
yep, the same place it's been going for years...The hell of it is, if we opened the ANWR up to the oil companies, prices wouldn't drop...Why would they? The oil companies are already selling themselves the oil they drill for market prices, even though it may only cost them a few $$$/bbl for the oil. Opening the ANWR would only give them MORE oil to rape us with...or sell on the open market for market prices. Much of the Alaskan oil is already being sold to foreign countries, what makes anyone think that this would change?
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
Originally posted by: BoomerD
Originally posted by: fallout man
Originally posted by: LTC8K6
NYT? I'll wait 48 hours to see if the story is accurate.
This story is pure malarkey!

Our Dear Leader has debunked it single-handedly:


Saudi oil output hike would not solve US problems: Bush


DRILL DRILL DRILL DRILL DRILL DROOL DROOL DROOL...

I see where this is going.
yep, the same place it's been going for years...The hell of it is, if we opened the ANWR up to the oil companies, prices wouldn't drop...Why would they? The oil companies are already selling themselves the oil they drill for market prices, even though it may only cost them a few $$$/bbl for the oil. Opening the ANWR would only give them MORE oil to rape us with...or sell on the open market for market prices. Much of the Alaskan oil is already being sold to foreign countries, what makes anyone think that this would change?
We import about 40+% of the oil used in this country, so alot of that oil is purchased on the open market. But let no produce any more in our country so we can remain in opec stranglehold.

 

Engineer

Elite Member
Oct 9, 1999
39,234
701
126
Originally posted by: charrison
Originally posted by: BoomerD
Originally posted by: fallout man
Originally posted by: LTC8K6
NYT? I'll wait 48 hours to see if the story is accurate.
This story is pure malarkey!

Our Dear Leader has debunked it single-handedly:


Saudi oil output hike would not solve US problems: Bush


DRILL DRILL DRILL DRILL DRILL DROOL DROOL DROOL...

I see where this is going.
yep, the same place it's been going for years...The hell of it is, if we opened the ANWR up to the oil companies, prices wouldn't drop...Why would they? The oil companies are already selling themselves the oil they drill for market prices, even though it may only cost them a few $$$/bbl for the oil. Opening the ANWR would only give them MORE oil to rape us with...or sell on the open market for market prices. Much of the Alaskan oil is already being sold to foreign countries, what makes anyone think that this would change?
We import about 40+% of the oil used in this country, so alot of that oil is purchased on the open market. But let no produce any more in our country so we can remain in opec stranglehold.

More oil (unless it's an unlimited supply) will not keep us off of the OPEC tit right now. Oh, and we import over 60% of our oil now.
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
Originally posted by: Engineer
Originally posted by: charrison
Originally posted by: BoomerD
Originally posted by: fallout man
Originally posted by: LTC8K6
NYT? I'll wait 48 hours to see if the story is accurate.
This story is pure malarkey!

Our Dear Leader has debunked it single-handedly:


Saudi oil output hike would not solve US problems: Bush


DRILL DRILL DRILL DRILL DRILL DROOL DROOL DROOL...

I see where this is going.
yep, the same place it's been going for years...The hell of it is, if we opened the ANWR up to the oil companies, prices wouldn't drop...Why would they? The oil companies are already selling themselves the oil they drill for market prices, even though it may only cost them a few $$$/bbl for the oil. Opening the ANWR would only give them MORE oil to rape us with...or sell on the open market for market prices. Much of the Alaskan oil is already being sold to foreign countries, what makes anyone think that this would change?
We import about 40+% of the oil used in this country, so alot of that oil is purchased on the open market. But let no produce any more in our country so we can remain in opec stranglehold.

More oil (unless it's an unlimited supply) will not keep us off of the OPEC tit right now. Oh, and we import over 60% of our oil now.
I agree it is not going to get us off opec, but it will give us more power to bargain with them. As long as we say we are not going to go after anwr or offshore it means what we have decided to be on opec tit for sure.
 

Engineer

Elite Member
Oct 9, 1999
39,234
701
126
Originally posted by: charrison

I agree it is not going to get us off opec, but it will give us more power to bargain with them. As long as we say we are not going to go after anwr or offshore it means what we have decided to be on opec tit for sure.
My vote is to agressively do what Brasil did and that is to develope something alternative and run with it. I'm sure that the brainpower is here....and if we're going to be paying outrageous prices for fuel, I would just rather pay it to man made alternatives made right here in the USA. Oil isn't going to last forever (in any usable quantities) so why not say fuck em now?
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
Originally posted by: Engineer
Originally posted by: charrison

I agree it is not going to get us off opec, but it will give us more power to bargain with them. As long as we say we are not going to go after anwr or offshore it means what we have decided to be on opec tit for sure.
My vote is to agressively do what Brasil did and that is to develope something alternative and run with it. I'm sure that the brainpower is here....and if we're going to be paying outrageous prices for fuel, I would just rather pay it to man made alternatives made right here in the USA. Oil isn't going to last forever (in any usable quantities) so why not say fuck em now?
You do know that we make more ethanol that brazil does?

While I agree it is time to get off oil. it is not a trivial problem we are going to solve in a short amount of time. If we mandated everyone had a drive a scooter to work, it would still take a long time to produce them for everyone. So if we want to get away from opec, we need to decrease demand, increase supply or both.


 

Engineer

Elite Member
Oct 9, 1999
39,234
701
126
Originally posted by: charrison
Originally posted by: Engineer
Originally posted by: charrison

I agree it is not going to get us off opec, but it will give us more power to bargain with them. As long as we say we are not going to go after anwr or offshore it means what we have decided to be on opec tit for sure.
My vote is to agressively do what Brasil did and that is to develope something alternative and run with it. I'm sure that the brainpower is here....and if we're going to be paying outrageous prices for fuel, I would just rather pay it to man made alternatives made right here in the USA. Oil isn't going to last forever (in any usable quantities) so why not say fuck em now?
You do know that we make more ethanol that brazil does?

While I agree it is time to get off oil. it is not a trivial problem we are going to solve in a short amount of time. If we mandated everyone had a drive a scooter to work, it would still take a long time to produce them for everyone. So if we want to get away from opec, we need to decrease demand, increase supply or both.

Increasing supply will give us a short term price drop (maybe???) but will do nothing except that. It will turn off developments of alternatives as cheaper fuel always does.

Doesn't matter that we produce more ethanol than Brasil does. They do it with a more efficient process and make enough to serve their country's needs. We could have done the same by now. Every year we wait is one year closer to the real peak oil and once on a decline, the scramble begins. Sure, if we can keep the price high and produce more oil domestically, it will help lower our dependence on OPEC and imported oil but it will do nothing for the long term energy needs of this country.

Why not start now....the price is currently high enough to do just that, IMO.
 

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