Back in the 1970's and early 1980's, oil companies could gouge prices.

The way they did it was to initiate "preventative maintenence" on refineries, pipelines, or ships. Things that did not necessarily have to be done right then, they'd just shut down and do it. If a pipe would eventually have to be replaced, they'd pick a spot when prices had dipped and do mainentence. This worked for them because it would be an acute price increase, and they could "justify" it to their investors' board. People wouldn't have enough time to find alternatives, and prices wouldn't jump enough for industries to spawn. They would, of course, buy out any patents or inventions that could change this business strategy.

Times have changed, and the oil companies no longer have that much control over supply and demand. 1970-1985 (excepting the embargo, of course), they could create supply, and they could create demand. These days, with all the environmental activists and regulations, they cannot alter the supply. Refineries are running at 95% capacity, with some (California) are running at 102% right now, and routinely during summer months.

The supply is limited by the ability of our refineries, not by our ability to import crude oil.

The demand is greater than their ability to actually supply refined products. Light, sweet crude (rich with the highly-volatile hydrocarbons, low sulfur) is easy to refine in comparison to heavy-sour crude; and HSC is the only "surplus" left in the supply chain, simply because no one has any extra refining ability to use it. This is due to the increased infrastructure necessary to refine and cleanse the refining-byproducts before venting them.

There is surplus heavy-sour crude (from various countries), but there are no refineries in America that can use this surplus; they are already refining the maximum amount of heavy-sour they can. Every plant is individual, and designed for a different type of crude and product.

So, here we are with the Chuckster and his Democrat buddies. Setup a committee, call in CEO's, make a "scene" on C-SPAN by chewing his/her ass for gouging. When the vote to license a new refinery comes up, they'll veto it. When the ANWAR vote comes up, they'll veto it. When a nuclear plant comes up for licensing, they'll veto it. A new coal mine? Veto. A space solar-collector? Veto. Tidal harness? Veto.


In the immortal words used by Dick Marcinko to describe the failed Iranian hostage-rescue attempt, "I do believe, good Sir, there is too much confusion amongst our modes of operation to allow victory in this endeavor."

My 2 cents worth:

US prices vs other countries.
Ill wager people in other countries don't have to drive near as much as we do in the US. My commute is 70 miles a day round trip because im forced to live out of town where rent is cheaper. There are others who live farther and hence drive further.

Big oil.
Price gouging, big time. I dont see how they can justify the prices when.
a.) All time record profits. (this by itself is enough)
b.) Apparently from all accounts ive read, they're not refining oil at maximum capacity, but rather spoonfeeding to ensure theres a constant demand.


BOHICA.
Theres really nothing the average citizien can do about it. The country is basically being bent over by the upper 1%. I saw on the news last night some of the oil company's CEO's, get paid 140,000 dollars EVERY WORKDAY. On top of the, it doesnt help when you have various govermental officals in the capital with ties to big oil.

Gas prices are infuriating, and the the reason behind those prices is even more infuriating.

I didn't think you were :) ... if you were a lacrosse player I figured you wouldn't have much time for forums. :D I drive right past the VA on the way home.

Incidentally, I checked tonight and gas in Spartanburg is about $2.79/gallon depending on where you go. Prices always go up as we get closer to Memorial Day (May 29 this year), so I wouldn't be surprised at all if they top $4.00/gallon

I must say though as I work in the oil industry for a company that makes accommodation, workshop and other modules for off-shore platforms, in some ways I want the price to stay reasonably decent as then the companies will spend more on prospecting. Therefore use more rigs, employ more people on the rigs and thus use my companies products.

So a double edged sword really.

I saw on the news the other night that Exxon/Mobile CEO earned something like $684,000,000 last year. That just blows my mind.

Not quite. Not that I would complain if we came across a small sum like that! :nope:

However, you're much closer if you were referring to the chairman of the board. :doh:

Guess where those profits go. That's right: to the investors, in the form of dividends. And if you held stock in those same publicy traded oil companies, you'd be getting your dividends. I'm.......uh......getting my dividends, although I'm in a slightly different (but no less important!) area of the petroleum sector.

Private companies do not hold back profitable production, nor do they keep spare production capacity. The telephone companies don't install central offices capable of handling 100% of the population, simply because 25% of that capacity will go un-used except in the case of and emergency, and even then it doesn't make enough profit to cover the cost. You don't leave 45 minutes early to work every day just because you MIGHT have a flat tire.

But, regardless of all else, petroleum companies haven't been able to *make* spare production capacity, because the building licenses have been denied for as long as I have been alive.


Now, beyond all of that, on the specific topic of refineries:

We haven't built a new refinery in nearly 30 years. And the existing refineries haven't been expanded in nearly 20 years. All of the numbers you see for "total refining capacity" are based off the refinery design, not it's current working state. Just like your car, there are a thousand parts, and things fail at different rates. Your air conditioner might be unusable for awhile even though the car will still move, or your clutch might be going out but it's not completely gone out just yet.

For example, right now there's a huge deficit because of the switch-over from methyl tertiary butyl ether. You have to purge the system to rid it of any solute, and so the refineries storage tanks and pipes, as well as tanker trucks and gas stations, have to purge. Right now, that means sections of refineries (especially in California) have shut down 10-15% working capacity to do this purge. On top of that, you can't put as much ethanol into solution, so the total volume of "gasoline" production will be reduced from each refinery's MTBE production levels.

All of this pulls down the supply. And all of this is in the hands of engineer "tiger teams" working their asses off, 24/7 to get it done on all of our 130+ refineries. Why'd they wait until the last minute? Because gas was high anyway, and they wanted every last bit of production they could possibly output to cover the purge costs.




You can thank the environmentalists for the price of gas, right now. Windmills kill birds. Tidal harnessing disrupts fish breeding. Nuclear power contaminates the area for thousands of years. Orbital solar-collectors can go off-target with their terawatt beam. Geothermal rapes the planet core. Coal forces horrible conditions on the miners and even more horrible atmospheric conditions. Natural gas creates voids in the earth which will someday collapse.

And then, when they have been working hard all day at protesting all power production, they grab their iPod, jump on MSN Chat, and cooridinate tomorrow's protest.

Not if you transmit the power down an orbital tether. All the more reason to build a Space Elevator. :rock:

So, you're not a cynic then? :rotfl:

I think we know why Germany developed those fuel cell subs! :lol:

Score one for the Fatherland...

Anyway, so I picked up the Land Rover and man does it suck gas!!! And, it needs Premium fuel as well! This is a bad combo. I'll keep it parked except for work or play.

I must say, I already took it 4x'ing and it is way fun to drive off-road. This thing is not meant much for onroad and is designed to be driven off road. Land Rover's kick butt. Is this one of the last SUV's with a locking differential? I don't understand why they are turning other SUV's into just glorified mini-vans. They are going cheap.

-S

Yes, best way to counter it is drive less, and drive a more fuel-efficient vehicle :up:

still US pays like 30% less for fuel than we do in europe. So you guys just quit whining.

This black gold has peaked and is now on the slide. So what the heck is going to replace it, no one has a real solution to that question.