$3 and Climbing

[Makalakumu]

America is indeed facing an energy crunch. For much of the year, gas prices have soared and supply has trailed demand.

The oil industry and its allies would have the public believe that insufficient refining capacity, restrictive environmental standards, growing gasoline demand and OPEC production cutbacks are the primary reasons for the current oil and gas supply problem.

However, the record shows ... that there is more to the story. Specifically, documentes suggest that major oil companies pursued efforts to curtail refinery capacity as a strategy for imporving profit margins; that compete oil companies worked together to subvert supply; that refinery closures inhibited supply; and that oil companies are reaping record profits, yet may benefit from a proposed national energy policy that owuld offer financial incentives to expand refinery capacity.

I don't know if this is a purposeful manipulation or not, but I do know that the science shows that we are on the beginning of a permanent energy crunch. The worlds total production has risen to as high as it will ever get and will begin falling...and this will happen despite an increase in demand by the world.

 

[michaeledward]

Did you hear, Brazil is about to become energy independent.

Brazil uses approximately 2 million barrels of oil a day. With the opening of their lastest drilling facility, Brazil is going to be able to extract and produce 2 million barrels of oil a day.

Certainly, that is not going to work forever, but they are not going to rely on imports for their fuel needs.

 

[Blindside]

I don't know if this is a purposeful manipulation or not, but I do know that the science shows that we are on the beginning of a permanent energy crunch. The worlds total production has risen to as high as it will ever get and will begin falling...and this will happen despite an increase in demand by the world.

There are other oil supplies out there that aren't near full utilization, a strong example is:
http://www.energy.gov.ab.ca/89.asp

But, as an enironmentalist the idea of strip-mining Alberta for oil is pretty repugnant to me.

Lamont

 

[Gemini]

If my aged mind serves, in 1972 when the first crunch hit, gas was .55/gallon. When I got my license in 1974, gas was about $1.20/gallon . Yet, in over 30 years it hasn't increased at the same rate as anything else I can think of. Cars, housing, milk, beef, haircuts, salaries...nothing. I don't think it's so much that its risen, as that it hasn't risen at the same steady rate as enything else over the same period of time. To Bob's point, the fact that the reasons <excuses> are based more in speculation than justification doesn't help either. I do believe however, that this too will become an non-issue as the situation stabalizes, but I doubt we'll ever see prices where they were. I'll just need to put my beautiful 400 hp Stang in a museum somewhere. Pretty soon, driving it will be about as popular as walking around in genuine fur.

 

[tshadowchaser]

I am starting to feel old. I used to fill up my fathers buick fo$2.50 bak when I started driving. Now I can't even nuy a gallon of gas for that amount.
I think (personalu)that if we are in that big off a pronlem getting oil to make gas then the gas companies should not be makeing many billions of dollars profit each year. I know that they musst procs the crude and the want a small profit but I think most of the world is getting ripped off
check out the gas prices in other countries around the wols and you will se prices from 20 cents a gallon to 5 dollars a gallon

 

[Bob Hubbard]

Theres a solid reason for Brazil's success. They are running on dual-use vehicles, and have a very successful bio-fuel program in that country.
http://news.bbc.co.uk/2/hi/business/4581955.stm

A new generation of alcohol-powered cars entered production in Brazil in 2003, after the government decided that cars capable of burning ethanol should be taxed at 14%, instead of 16% for their exclusively petrol-powered counterparts.

Unlike earlier models, these are "flex-fuel" cars - equally happy with pure alcohol, pure petrol, or any blend of the two.

When the fuel tank is filled, a special computer chip analyses the mixture and adjusts the motor according to how much ethanol and how much petrol it contains.

In 2004, the first full year that "flex-fuel" cars were on sale, they accounted for more than 17% of the Brazilian market.

Last year, they scored an even bigger success, overtaking petrol-driven models for the first time since the 1980s and taking 53.6% of the market for new cars.

But, don't worry. In 20-30 years we'll have fuel cells here in the US, and everything will be ok again.

I like bio-diesel. Use old McD fryer grease, costs 53 cents a gallon, get 70mpg, and your exhaust smells like french fries.
You can even make it at home.

 

[Henderson]

I like bio-diesel. Use old McD fryer grease, costs 53 cents a gallon, get 70mpg, and your exhaust smells like french fries.
You can even make it at home.

http://www.biodiesel.org/

 

[michaeledward]

America is indeed facing an energy crunch. For much of the year, gas prices have soared and supply has trailed demand.

The oil industry and its allies would have the public believe that insufficient refining capacity, restrictive environmental standards, growing gasoline demand and OPEC production cutbacks are the primary reasons for the current oil and gas supply problem.

However, the record shows ... that there is more to the story. Specifically, documentes suggest that major oil companies pursued efforts to curtail refinery capacity as a strategy for imporving profit margins; that compete oil companies worked together to subvert supply; that refinery closures inhibited supply; and that oil companies are reaping record profits, yet may benefit from a proposed national energy policy that owuld offer financial incentives to expand refinery capacity.

Well, I guess I should source this ... because these words aren't actually mine. They can be found in this 2001 report.

http://wyden.senate.gov/leg_issues/reports/wyden_oil_report.pdf

Some interesting facts ...

According to Energy Information Administration, the following refineries were shut
down between 1995 and 2001:​

Year Refinery Location​

1995
Indian Refining................. Lawrenceville, IL
Cyril Petrochemical Corp..... Cyril, OK
Powerine Oil Co................ Sante Fe Springs, CA
Sunland Refining Corp........ Bakersfield, CA
Caribbean Petroleum Corp... San Juan, Puerto Rico
1996
Tosco............................. Marcus Hook, PA
Barrett Refg. Corp............. Custer, OK
Laketon Refg.................... Laketon, IN
Total Petroleum, Inc.......... Arkansas City, KS
Arcadia Refg. & Mktg......... Lisbon, LA
Barrett Refg. Corp............. Vicksburg, MS
Intermountain Refg. Co....... Fredonia, AZ
1997
Gold Line Refg. LTD............ Lake Charles, LA
Canal Refg. Co.................. Curch Point, LA
Pacific Refg. Co................. Hercules, CA
1998
Gold Line Refining Ltd.......... Jennings, LA
Petrolite Corp.................... Kilgore, TX
Shell Oil Co....................... Odessa, TX
Pride Refg. Inc................... Abilene, TX
Sound Refg. Inc................. Tacoma, WA
1999
TPI Petro. Inc.................... Alma, MI
2000
Pennzoil............................ Rouseville, PA
Berry Petroleum.................. Stephens, Ark.
Chevron............................ Richmond Beach, WA
2001
Premcor............................ Blue Island, IL

These refinery closures took more than 830,000 barrels per day of refinery capacity out of production.​

Listen carefully to the arguments now, and there is a call for more exploration by corporate flunkies.

So, the decreased refining capacity to jack up margins. Successful.
Now they are using the higher prices brought about by limited capacity to demand exploration.

And Herr Bush buys it, and writes it into law. It's good to take care of your friends. ​

 

[Gemini]

Does the report also state how many new refineries have been opened during that same span of years? Just curious.

 

[FearlessFreep]

I'm curious how refinary closuers in 1995 made the gas prices suddenly increase over the last few months?

I think to gain any sort of correlation you would need to know how many gallons of capacity were available at a given time, how much (or how much percentage) was lost due to those closures, and how much capacity there is today. Other than that I sorta have a hard time seeing how closures in 1995 and 1997 were part of a plot to drive up prices today, especially since the price spikes seem to be more closely correlated in time to specific events that are much harder to orchestrate (Katrina,the war in Iraq, and Iran threatening to develop nuclear weapons)

 

[Bob Hubbard]

I don't believe there have been any new refineries built in the last 20 years.

Also, the closure in 95 doesn't have an immediate impact today, until you look at the damages done during last years hurricanes, and todays increased demand. Crude is backed up on the docks.

 

[TigerWoman]

Here in Minnesota it is 2.80 a gal. Sounds like we are getting a deal. After filling up the tank last night in my suv, it was 48. Made me think on the way to my dog obedience class 50 miles away today, that maybe I should carpool now with another woman and her mountain dog. It took a third of a tank so 16+9 for the class= 25. a week and this is ongoing through six sessions of eight weeks (if my dog is good at it). $200 a session as opposed to the people living there paying just 70. Kind of like out-of-state tuition.

And I suppose I should pay for TKD classes now too that my kickboxing classes went under, maybe I should bike there this summer to save gas. Well, our winters were reallll mild this year. Only had enough snow to shovel in March and the the bills which were threatened to be 150%-200% were about normal. So what happened to all the gas we saved with the mild winter? I know my Mom had it mild in Nebraska as well and I gave her extra for her heat this year. I think there is definitely gas company gouging now from gasoline prices or maybe their execs can take a little less for salary. TW

 

[FearlessFreep]

Also, the closure in 95 doesn't have an immediate impact today, until you look at the damages done during last years hurricanes, and todays increased demand. Crude is backed up on the docks.

There's a big difference between "capacity was cut because of lack of need, until a natural disaster wiped out a lot of what capacity we had left...oops" and "capacity was cut intentionally to drive up cost, those scoundrels"

 

[Bob Hubbard]

Demand has been going up for years, we've just hit critical with everything now.

 

[michaeledward]

The closures of the refineries were designed to constrict capacity. Once capacity is constrained, margins can increase. Throw in a few weeks of rolling blackouts in the 7th largest economy in the world (California 2001) to prove a point, and you can increase margins. And profits go up.

The immediate excuses are the change over from winter heating oil to gasoline. This change over always creates tight supplies in late March / early April as the refineries make the processing switch. Summertime driving always increases demand for gasoline.

Also, the uncertainty about Iran is being used as an excuse to keep prices up.

Listen carefully to the oil companies paid for congresspersons ... they are all crying for increased exploration. As if we were somehow going to be able to drill ourselves to energy independence.

The one thing we can be confident in, is that Saudi Arabia is going to open their spiggots before the first Tuesday after the first Monday in November. Three bucks a gallon spells a Democratic Congress and Articles of Impeachment. House of Bush - House of Saud is not going to let that happen.

 

[Gemini]

I don't believe there have been any new refineries built in the last 20 years.

I did a quick check and you're close. Appears none have been opened since the late 70's in the US. Hmm. Wonder why if demand has been on the rise for so long (which I would agree with that statement) then why has the rest of the world been opening them (found several) and we have not?
Correct me if I'm wrong, but my understanding is that we haven't seen any expected relief from Iraq because though Iraq has huge crude resources, it doesn't have the capacity (or need) to refine so much crude. Input?

 

[Bob Hubbard]

Even if Iraq was 100% online, it wouldn't really dent our problem as we don't get much oil from there, and theres a backlog waiting to be refined as is.

 

[michaeledward]

I did a quick check and you're close. Appears none have been opened since the late 70's in the US. Hmm. Wonder why if demand has been on the rise for so long (which I would agree with that statement) then why has the rest of the world been opening them (found several) and we have not?
Correct me if I'm wrong, but my understanding is that we haven't seen any expected relief from Iraq because though Iraq has huge crude resources, it doesn't have the capacity (or need) to refine so much crude. Input?

Some from the industry will argue that no new refineries have been opened because of environmental regulations make it burdensomely difficult. This argument does not address why refineries are being closed.

We were led to believe that Iraq oil reserves would be sufficient to pay for the Iraqi reconstruction, relieving the American Taxpayers of the trillion dollar investment we have been committed too. Additionally, the friendly government of Iraq was supposed to make supplies available to the United States. And, as we all know, ample supply keeps prices low.

Currently, Iraq's oil output (not refining capacity, just getting the oil out of the ground) is below pre-invasion levels.

Kind of amazing to me, if you hit the ground in Iraq with a hammer, oil pours out, but we can't seem to get any onto a tanker headed this way.

 

[Rich Parsons]

Look into E85 Gasoline

Like Bob stated those with Ethanol.

The problem with Ethanol is that it is about 30 to 35 % less efficient then Gasoline of the same volume.

So, for it to be cost effective it would have to be about 33% less of the cost of Gasoline. Back a few months ago when Gas dropped down to $2.39 a gallon the two E85 (* yes there are only two at the moment *) had E85 at $2.29 a gallon. This is not cost effective for the driver will see a drastic change in the miles per gallon on E85.

It is even possible to see the change in mile per gallon on the E15 which is the standard Ethanol Additive in Gasoline used to add "Oxygen" to make it "Burn" cleaner. In reality what you get is a less effiecient reaction for the same price as a gallon of gas that does not have E15.

Now, is E85 much more renewable? YES IT IS!

Is E85 capable of being mass produced and distributed with todays infrastructure? YES IT IS, with some minor changes to handle the alcohol content.

Why not go with E100? Because the governement is concerned that people will drink it. So, some Gasoline is added for better reaction as it acts like a catalyst.

Are all cars capable of using E85? NO!

Even if the car runs or could run on E85, and sometimes this happens with E15, the hoses and other parts get brittle and are more likely to break or malfunction becuase of the rection with the alcohol.

Can my car be updated to support this? Most can, but it may cost you some money for injectors and fuel rails.

Most large size or Full size trucks support the E85 from GM/Ford/Chrysler. These are the newer models. The older models have the same issues as I mentioned above.

On the good side GM has agreed to work with Miejers here in Michigan to build 85 gas stations to carry and dispurse the E85 fuel.

The biggest thing to remember about the E85 is that your MPG wil go down and your distance travelled per tank will be less. Expect this, and be willing to work with this.

 

[donna]

Our fuel prices here just hit $1.40 / litre Aus. So if you do the conversion math that is over $4 US / gallon.