[quote]frisbee wrote:
even more of an issue then not wanting nuclear power plants near them, in my opinion, is not wanting the radioactive waste stored anywhere[/quote]
Too late. The waste already exists. We have to store it somewhere.
[quote]mindeffer01 wrote:
Thanks Vroom and Hedo for breaking through the simple minded thinking that leads people to believe that more refineries lead to cheaper crude. Thats why it is crude. Because it is un-refined. New refineries will do a good deal to hep rectify the deficit on the supply of refined fuels side, but how about demand?
… [/quote]
I don’t think anyone believed that. Vroom brought it up as kind of a joke and Doogie was just kidding.
I hope no one here is that stupid.
[quote]hedo wrote:
Yes more refineries will cause prices to drop. The reason gas prices spiked is because refining capacity was hurt due to Katrina.
Oil companies will build more capacity if it makes economical sense to do so. They sold them off many years ago because it was not profitable to own them and exploration made more of a profit. This is often lost on academics and socialists but understood quite well by businessmen. It’s not popular to support big oil so the Dems will distance themselves from this bill to the detriment of the public in general in the form of higher gas prices.[/quote]
the price of oil and consequently gasoline was rising long before katrina… . that was just a sprinkling of sugar on top of the muffin that is global oil depletion. …
how about… . oil companies are not building any more refineries because there is no longer any need to as there is no additional oil around to make them necessary.
the world is basically running at full capacity now and its a dream that they can keep producing more and more and more ad infinitum… . the oil companies basically allready know that theres no point making new refineries that will be useless within the decade or however many years… . chevron is allready making it clear that they can not continue with business as usual for much longer so its not hard to assume that all other companies are aware of just how little value something like new refineries are going to be in the coming years. …
now on the other hand… . once bush and his cronies get into the arctic national wildlife reserve and start trying to get at the canadian tar sands some sort of new breed of refinery will have to be built to refine this very expensive and low grade oil source. …
Yea, I guess I was just reacting to what I’ve heard a lot of lately. A bunch of stuff about an oil shortage. Meanwhile, the Saudis just offered up their excess production, but had to be turned down because of a lack of refinery capacity. Most of the news equates a fuel shortage to an oil shortage, as if you just pump crude oil into your vehicle.
[quote]Gl;itch.e wrote:
how about… . oil companies are not building any more refineries because there is no longer any need to as there is no additional oil around to make them necessary.
now on the other hand… . once bush and his cronies get into the arctic national wildlife reserve and start trying to get at the canadian tar sands some sort of new breed of refinery will have to be built to refine this very expensive and low grade oil source. … [/quote]
Aren’t these two paragraphs in direct contradiction?
I’ve been reading a lot of reports on exploration lately that indicate that none of that is true.
[quote]I don’t think anyone believed that. Vroom brought it up as kind of a joke and Doogie was just kidding.
I hope no one here is that stupid.[/quote]
Well, anyway, what I would like to know is how much it costs to refine a barrel of crude oil.
This would give us a base price for refined fuel products before transportation to and taxation at the pump.
I don’t know about anyone else, but what I hear on the news all the time is talk about record prices per barrel of crude oil…
Does anyone have any answers?
[quote]mindeffer01 wrote:
Gl;itch.e wrote:
how about… . oil companies are not building any more refineries because there is no longer any need to as there is no additional oil around to make them necessary.
now on the other hand… . once bush and his cronies get into the arctic national wildlife reserve and start trying to get at the canadian tar sands some sort of new breed of refinery will have to be built to refine this very expensive and low grade oil source. …
Aren’t these two paragraphs in direct contradiction?
I’ve been reading a lot of reports on exploration lately that indicate that none of that is true.
[/quote]
they would be if the refining was the same for tar sands as it is for light sweet crude and heavy sour. …
We are already exploiting the tar sands… and rising prices make it a more profitable venture.
I drive by a bunch of refineries everyday. If you’ve never really seen one, they are very confusing to look at–miles of pipes going everywhere.
I drive by, look, and realize I have no clue what refining oil entails. Does anyone here have some reading on the subject they could point me to? It would be nice to have a little understanding of what is going on next door. I’m especially curious as to why the gas being burned off in the flares couldn’t be put to some use.
Since nobody understands this, let me enlighten everyone. (I would have said illuminate, but you know how the thread would have turned after that.)
First remember the 90’s? Oil was cheap. When OPEC said they were cutting production, nobody believed them, and rightly so. Supply was more then sufficient for demand. And as happens when a commodity is low priced, oil companies quit trying to find more oil, pump more oil, or worry about fighting the environmentalists. In fact they were secretly supporting the environmentalists by not really fighting all the rules that bottleneck the supply.
The problem was nobody was preparing for the growing middle class of India and China.
At the same time nobody really cared about fuel economy. The demand was for power, and the car industries put a lot of research into getting more energy out of a gallon of gas. But all that extra energy which could have gone into more fuel economy instead went into more power.
The reasons are not the conspiracy theories you have heard in the past, but actually just giving the customer what they want. If the customer had actually demanded more fuel economy, they would have given it to us. But nobody did, other then a few in the fringe, but that was not enough to make a dent compared to the large groups who wanted more power, and SUV’s.
Now demand has suddenly jumped again because of China and India. They need fuel, and want their economies to grow. Perfectly understandable, but demand is growing faster then the supply has been pumped and refined. And after more then a decade of the oil companies not preparing for this, prices have jumped.
There are other factors as well, such as last year’s hurricane, which slowed supplies, and the two again this year. But the biggest factor is really the speculators (i.e. gamblers) who bid the prices up beyond what they really should have been. In fact the price was beginning to fall right before Katrina hit. In fact it hasn’t been able to sustain the price having dropped to $60.70 for US light sweet crude from it’s high of $70.85. (That’s a 14% drop if you care.)
Now for people who do not understand why crude prices go up when it is not the crude, but the gasoline that is in short supply, really it doesn’t make too much sense, but the speculators still bid it up, seeing it in the same vein as gasoline.
Recently I have heard of refineries saying that stuff that happens all the time but never made the news, nor had any affect the market suddenly was almost front page and caused oil to have more excuses for climbing.
This is no different then the worthless internet companies that never showed a profit being bid up into billions, with assets in the hundreds. Too many people see the market as a craps table, not a place for intelligent investments. There are a lot of compulsive gamblers in the market who do not know it. Loose your house to a casino, and you look like an idiot. Loose your house because you bet on a stupid unprofitable company, and you were just unlucky due to a bad market.
Now again people are bringing up peak oil. Intelligently pointing out that the supply is finite. To put this into perspective the fuel for the sun is also finite. Just another 4 billion years and poof it’s gone.
Rather then go into detail as I have in the past, here are the facts. (Skip it if you are tired of this discussion.)
There is plenty of oil. All the doom and gloom is based on the proved reserves, which is the oil we know for a fact we can get cheaply. It does not include probable nor unproved reserves. It also does not include heavy oil, oil sands, nor oil shale.
Yes those will cost more to refine, which is why it is not in big use right now. Why would any company go the more expensive route when they don’t need to? Does not make financial sense. But when oil actually starts to decline, it will suddenly become financially viable.
Also more types of fuel are being made available. In Brazil they are buying flexible fuel cars, and running on alcohol made from sugar.
This is the market responding to high gas prices, and this will reduce the demand for gas. I believe, regardless of what anyone says, we will have chap fuel again, and we will have expensive fuel again, and the peak oil crowd will again pop up, or some other doom and gloom group.
Now as far as Nu-Q-Ler power, I do not have a problem with them building a plant behind me. None. Again groups of politically blind people are against Nu-Q-Ler power. It would be better when the fusion plants go online, but that is way too far in the future. In the meantime I see no problem with fission plants.
People need to realize that technology has advanced since the last plant was built, and they are safer then ever. If Chernobyl comes to mind, people need to know that the entire Nu-Q-Ler industry was complaining about how the plant was designed. It should never have been built, and was actually the reverse of what it should have been.
Then there is 3 mile island. Further in the past event. Funny thing is that people were in their courthouse worrying about the radiation from the plant, not realizing that they were getting more radiation from the granite in that building then they were getting from the plant.
Back to oil, the price is actually all our fault. It is nice to find a scapegoat, such as “Bushy” and his “cronies” but we are all to blame. But I will say the oil industry really should have been prepared, and needs more competition. (I believe there is a little too much collusion going on between these companies, and not enough competition.)
Now if you don’t get what I am saying, if you are going to blame Bush, you must present the facts to back up your accusation. There must be a real connection, not just an assumption because he once worked in the oil industry. If you don’t have the proof, then all you are doing is gossiping.
Now I will say he has some blame, as does all of the government, and the oil industry, and the car manufactures, and the whole car and SUV buying public.
Hey Mage, what do you think of this?
I’ve been thinking about this for a few days. It looks like we’re going through another cycle. In the 60’s the auto industry was producing muscle cars and 20 foot long sedans. That went well until Opec put a crunch on crude and prices went through the roof relative to the time period of the 70’s. The humongus cars were no longer the thing to have and the refineries we now have that are considered outdated were built. The size of cars came down and the efficiency of them went up. All kinds of crazy new ideas like gasahol were popping up. Exploration and technological solutions increased and so did the efficiency and refinery capacity. The eighties and early nineties come and go, leaving us with feul injection, smaller more efficeint cars and new technology to be perfected.We get to the late nineties and s.u.v.'s become the norm. A return of the leviathan sized vehicles. Opec threatens to raise prices and does make good on it. They announced a price target a few years ago, but not too many were listening. Recent reports say you can’t even give an S.U.V. away. No one wants them. So now we have a new generation of vehicles. The hybrid driven engines, and scientists working on alternative feul sources like never before. The size of vehicles is coming down, and the new tech. is being implemented. Some new refineries should be finished in about five years.
So where does the market go from here?
I’m guessing that the next trend is going to go toward getting more power and efficiency out of the hybrid drives, and there should be some new developements in fuel formulae a few years away. It seems like a prety broad speculation, but I’m just going off of a previous trend.
p.s. I got out of HAL and VLO last friday.
[quote]doogie wrote:
vroom wrote:
One thing more refineries won’t do is bring down the price of crude…
Yes it would.[/quote]
That response is wrong in so many ways.
The price of crude oil represents the cost of ‘texas sweet’ crude oil.
The ‘dirtier’ crude oil is more abudant but we do not have the ability to refine it.
Crude oil prices and refining cost are mutually exclusive. To say they are the same is to say the price of cotton and the cost of making clothes from cotton are dependant on each other. Think about it.
Raise your hand if you want a refinery in your town or county…that is the problem. The costs of refining have gone up 300% since 2000 because these costs are not regulated and the refining companies know we will pay.
I have sat in meetings with the petro/chemical analysts at my firm and I am confident the vast majority of people really have misguided reasons for believing why oil costs so much.
It is supply and demand. Asia and India produce most of the goods we consume and they use oil to make electricity. This is what we get for allowing other countries to make everything for us and they could careless how they produce electricity.
[quote]doogie wrote:
vroom wrote:
Yes it would.
Really? Refineries increase the supply of crude nowadays?
Will wonders never cease!
I was just being argumentative there.
[/quote]
Nuke power takes 10 years to come online. The startup costs depreciated on the p&l gets passed on to the consumer and thus make electricity very expensive.
Hydrogen is made with natural gas which is trading at $15+ per decatherm and Ethanol takes more petroleum products to produce than it would replace. The proof is ADM does not use Ethonal to power its vehicles. ADM uses diesel.
[quote]Gl;itch.e wrote:
hedo wrote:
Yes more refineries will cause prices to drop. The reason gas prices spiked is because refining capacity was hurt due to Katrina.
Oil companies will build more capacity if it makes economical sense to do so. They sold them off many years ago because it was not profitable to own them and exploration made more of a profit. This is often lost on academics and socialists but understood quite well by businessmen. It’s not popular to support big oil so the Dems will distance themselves from this bill to the detriment of the public in general in the form of higher gas prices.
the price of oil and consequently gasoline was rising long before katrina… . that was just a sprinkling of sugar on top of the muffin that is global oil depletion. …
how about… . oil companies are not building any more refineries because there is no longer any need to as there is no additional oil around to make them necessary.
the world is basically running at full capacity now and its a dream that they can keep producing more and more and more ad infinitum… . the oil companies basically allready know that theres no point making new refineries that will be useless within the decade or however many years… . chevron is allready making it clear that they can not continue with business as usual for much longer so its not hard to assume that all other companies are aware of just how little value something like new refineries are going to be in the coming years. …
now on the other hand… . once bush and his cronies get into the arctic national wildlife reserve and start trying to get at the canadian tar sands some sort of new breed of refinery will have to be built to refine this very expensive and low grade oil source. … [/quote]
This is already happening.
Our clients porfolios have bond (high yield) in them from companies expanding their mining of crude for Canadian sand.
The cost of oil makes this very profitable and the practice will continue indefinitely as crude will never decrease in price but only increase.
They charge us $0.99 per gallon now and charged us $0.33 in 2000.
mindeffer01,
We are going through a cycle of high energy prices, and as usual the market responds. The last big oil spikes actually helped the Japanese car market. American car companies were convinced nobody could compete against them, and got lazy.
American car quality stagnated while Japanese cars were working on improving quality. Also they were designed to be more efficient. When oil prices jumped, they went from waiting in the wings to taking over the market.
What we are seeing is another change in the market. More and more hybrids are being built, and demand for them is climbing. Even if the price of oil drops, which it eventually will, the memory of high prices will stay in people’s minds for a while.
Also I am hearing about some advances coming in the ethanol area causing a plunge in price to become more competitive with gas, and biodiesel. (Biodiseal can be used in place of diseal in most cases with little or no modification to current engines.)
Marmadog,
Actually as I pointed out earlier while it would seem the price of crude and refining is mutually exclusive, the price of gas and oil generally influence each other, along with the whole energy market. When one rises, they often take the others along for the ride. Again just like the 90’s when internet companies were all the rage, there were a lot of worthless companies that rose for no reason other then they were an internet company.
Also more refineries mean more supply of gas, which reduces the upward supply/demand pressure, reducing gas prices directly, as well as oil.
As far as heavy oil, and the tar sands, here is a nice little article from over a year ago:
It talks about production costs are $10 a barrel right now, which is 3 times as much as light sweet crude. I don’t have current information as far as refining, but a year or two ago I ran into an article that mentioned it costs and extra $10 per barrel to refine the heavy stuff. Interestingly OPEC was offering a $14.20 discount per barrel of their Dubai crude (a medium crude,) to refiners.
I thought the 90 plus cents per gallon tax that makes gas expensive.
[quote]Actually as I pointed out earlier while it would seem the price of crude and refining is mutually exclusive, the price of gas and oil generally influence each other, along with the whole energy market. When one rises, they often take the others along for the ride. Again just like the 90’s when internet companies were all the rage, there were a lot of worthless companies that rose for no reason other then they were an internet company.
Also more refineries mean more supply of gas, which reduces the upward supply/demand pressure, reducing gas prices directly, as well as oil.[/quote]
Okay, this seems to be missed around here.
Gasoline is one of the products produced by REFINING oil. So the cost of raw crude oil can certainly have an impact on gasoline, as it determines the cost of the major input into the production of gasoline.
When people, the general public, complain about gas prices, they are talking about gasoline, not natural gas. So, while the price of natural gas is not directly linked to crude oil prices, the price of gasoline does have a very concrete link.
However, yes, the Internet analogy will hold to some degree – no disagreement with that.
[quote]The Mage wrote:
Since nobody understands this, let me enlighten everyone. (I would have said illuminate, but you know how the thread would have turned after that.)
First remember the 90’s? Oil was cheap. When OPEC said they were cutting production, nobody believed them, and rightly so. Supply was more then sufficient for demand. And as happens when a commodity is low priced, oil companies quit trying to find more oil, pump more oil, or worry about fighting the environmentalists. In fact they were secretly supporting the environmentalists by not really fighting all the rules that bottleneck the supply.
The problem was nobody was preparing for the growing middle class of India and China.
At the same time nobody really cared about fuel economy. The demand was for power, and the car industries put a lot of research into getting more energy out of a gallon of gas. But all that extra energy which could have gone into more fuel economy instead went into more power.
The reasons are not the conspiracy theories you have heard in the past, but actually just giving the customer what they want. If the customer had actually demanded more fuel economy, they would have given it to us. But nobody did, other then a few in the fringe, but that was not enough to make a dent compared to the large groups who wanted more power, and SUV’s.
Now demand has suddenly jumped again because of China and India. They need fuel, and want their economies to grow. Perfectly understandable, but demand is growing faster then the supply has been pumped and refined. And after more then a decade of the oil companies not preparing for this, prices have jumped.
There are other factors as well, such as last year’s hurricane, which slowed supplies, and the two again this year. But the biggest factor is really the speculators (i.e. gamblers) who bid the prices up beyond what they really should have been. In fact the price was beginning to fall right before Katrina hit. In fact it hasn’t been able to sustain the price having dropped to $60.70 for US light sweet crude from it’s high of $70.85. (That’s a 14% drop if you care.)
Now for people who do not understand why crude prices go up when it is not the crude, but the gasoline that is in short supply, really it doesn’t make too much sense, but the speculators still bid it up, seeing it in the same vein as gasoline.
Recently I have heard of refineries saying that stuff that happens all the time but never made the news, nor had any affect the market suddenly was almost front page and caused oil to have more excuses for climbing.
This is no different then the worthless internet companies that never showed a profit being bid up into billions, with assets in the hundreds. Too many people see the market as a craps table, not a place for intelligent investments. There are a lot of compulsive gamblers in the market who do not know it. Loose your house to a casino, and you look like an idiot. Loose your house because you bet on a stupid unprofitable company, and you were just unlucky due to a bad market.
Now again people are bringing up peak oil. Intelligently pointing out that the supply is finite. To put this into perspective the fuel for the sun is also finite. Just another 4 billion years and poof it’s gone.
Rather then go into detail as I have in the past, here are the facts. (Skip it if you are tired of this discussion.)
There is plenty of oil. All the doom and gloom is based on the proved reserves, which is the oil we know for a fact we can get cheaply. It does not include probable nor unproved reserves. It also does not include heavy oil, oil sands, nor oil shale.
Yes those will cost more to refine, which is why it is not in big use right now. Why would any company go the more expensive route when they don’t need to? Does not make financial sense. But when oil actually starts to decline, it will suddenly become financially viable.
Also more types of fuel are being made available. In Brazil they are buying flexible fuel cars, and running on alcohol made from sugar.
This is the market responding to high gas prices, and this will reduce the demand for gas. I believe, regardless of what anyone says, we will have chap fuel again, and we will have expensive fuel again, and the peak oil crowd will again pop up, or some other doom and gloom group.
Now as far as Nu-Q-Ler power, I do not have a problem with them building a plant behind me. None. Again groups of politically blind people are against Nu-Q-Ler power. It would be better when the fusion plants go online, but that is way too far in the future. In the meantime I see no problem with fission plants.
People need to realize that technology has advanced since the last plant was built, and they are safer then ever. If Chernobyl comes to mind, people need to know that the entire Nu-Q-Ler industry was complaining about how the plant was designed. It should never have been built, and was actually the reverse of what it should have been.
Then there is 3 mile island. Further in the past event. Funny thing is that people were in their courthouse worrying about the radiation from the plant, not realizing that they were getting more radiation from the granite in that building then they were getting from the plant.
Back to oil, the price is actually all our fault. It is nice to find a scapegoat, such as “Bushy” and his “cronies” but we are all to blame. But I will say the oil industry really should have been prepared, and needs more competition. (I believe there is a little too much collusion going on between these companies, and not enough competition.)
Now if you don’t get what I am saying, if you are going to blame Bush, you must present the facts to back up your accusation. There must be a real connection, not just an assumption because he once worked in the oil industry. If you don’t have the proof, then all you are doing is gossiping.
Now I will say he has some blame, as does all of the government, and the oil industry, and the car manufactures, and the whole car and SUV buying public.[/quote]
One word: cogent.
[quote]vroom wrote:
Actually as I pointed out earlier while it would seem the price of crude and refining is mutually exclusive, the price of gas and oil generally influence each other, along with the whole energy market. When one rises, they often take the others along for the ride. Again just like the 90’s when internet companies were all the rage, there were a lot of worthless companies that rose for no reason other then they were an internet company.
Also more refineries mean more supply of gas, which reduces the upward supply/demand pressure, reducing gas prices directly, as well as oil.
Okay, this seems to be missed around here.
Gasoline is one of the products produced by REFINING oil. So the cost of raw crude oil can certainly have an impact on gasoline, as it determines the cost of the major input into the production of gasoline.
When people, the general public, complain about gas prices, they are talking about gasoline, not natural gas. So, while the price of natural gas is not directly linked to crude oil prices, the price of gasoline does have a very concrete link.
However, yes, the Internet analogy will hold to some degree – no disagreement with that.[/quote]
Vroom, what are you talking about? He is referring to gasoline. As in the wholesale commondity. Not natural gas, which is linked to wholesale gasoline and crude oil prices, much like the tech analogy outlined above.
Something interesting in the US would be to consider getting rid of the isolated special interest groups that campaign to have their oil left alone. Off the coast of Florida would be a good place to start. We know there’s oil, but they don’t want to look at derricks… Poor guys. Or maybe reducing this specialty market gas and come up with one grade for across the US based on emissions? The difference between wholesale gas (around 1.78) and what most people are paying at the pumps is around a dollar. Maybe some things to help standardize the market would help.