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Aygeear
A Day Late And A Dollar Short

join:2000-12-03
Stockton, CA

Have You Checked Oil Prices Lately?

The Stock Market is going up, and so are oil prices. We are just a tad shy of $100 a barrel. Gasoline prices will follow shortly... remember when it was $5.00 a gallon? It's time to get serious about biobased and synthetic fuels NOW!!!!


Snakeoil
Ignore Button. The coward's feature.
Premium
join:2000-08-05
Mentor, OH
kudos:1
Electric cars are out, thanks to the EPA running around shutting down power plants that run on coal. At least until more power plants that use boilers that are heated by natural gas. Which seems to be abundant thanks to the wonderful fraking that has been going on.

I read that electric prices will also be through he roof this year, until they get more natural gas power plants on line.
--
Is a person a failure for doing nothing? Or is he a failure for trying, and not succeeding at what he is attempting to do? What did you fail at today?.


Dolgan
Premium
join:2005-10-01
Sun Prairie, WI
Reviews:
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quote:
thanks to the EPA running around shutting down power plants that run on coal.
The EPA has not been shutting down coal plants. The owners of the plants are shutting them down because they are too cheap to perform the upgrades necessary to limit the amount of pollutants they emit. There is no such thing as "clean coal" and one only needs to see what has been happening in Beijing as to why we need to get off coal. Furthermore, if you look at the environmental damage caused in the emerging economies you would understand why the EPA is necessary to keep our citizens, and environment as safe as possible.

The thing I do not understand when it comes to the oil markets is why do we import the more expensive BRENT crude instead of using more of the crude oil we produce? Is it that much easier to refine that it justifies paying $10-20 more per barrel? Why aren't we refining more of the tar sands oil that has been selling in the $40-60 range instead of trying to build a pipeline so the Canadians have better access to a port so they can sell it on the world market and sell less to us?


Snakeoil
Ignore Button. The coward's feature.
Premium
join:2000-08-05
Mentor, OH
kudos:1
I disagree. Failure to comply with EPA standards equates to you getting shut down. Hence EPA shutting them down is appropriate.

I was listening to a talk radio show the other day, either Rush or Mike Trivisonno. They talked about an "EPA" raid on a coal fired power plant in Texas, that resulted in another 200 plus innocent Americans becoming unemployed, and our power production being reduced.

Hence, the EPA shut them down.

I do agree about the oil thing.
quote:
The thing I do not understand when it comes to the oil markets is why do we import the more expensive BRENT crude instead of using more of the crude oil we produce? Is it that much easier to refine that it justifies paying $10-20 more per barrel? Why aren't we refining more of the tar sands oil that has been selling in the $40-60 range instead of trying to build a pipeline so the Canadians have better access to a port so they can sell it on the world market and sell less to us?

I recall reading a while ago, that a few people think the idea is thus. To protect our oil reserves, we would rater buy the expensive stuff from over seas, and drain those sources dry. Then after they have been drained dry, then we'd open our reserves and be the oil kings of the world. For as long as they lasted.

Then again, with all the damn EPA rules and regulations, that could be the main factor as to why we aren't touching the tar sand oil.
EPA one of the many reasons why companies have moved over seas.
--
Is a person a failure for doing nothing? Or is he a failure for trying, and not succeeding at what he is attempting to do? What did you fail at today?.


DSL987

join:2000-03-22
Helotes, TX
reply to Dolgan
said by Dolgan:

The thing I do not understand when it comes to the oil markets is why do we import the more expensive BRENT crude instead of using more of the crude oil we produce? Is it that much easier to refine that it justifies paying $10-20 more per barrel? Why aren't we refining more of the tar sands oil that has been selling in the $40-60 range instead of trying to build a pipeline so the Canadians have better access to a port so they can sell it on the world market and sell less to us?

Who says we are refining a lot of Brent?


JRW2
R.I.P. Mom, Brian, Ziggy, Max and Zen.
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join:2004-12-20
La La Land
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reply to Snakeoil
said by Snakeoil:

I recall reading a while ago, that a few people think the idea is thus. To protect our oil reserves, we would rater buy the expensive stuff from over seas, and drain those sources dry. Then after they have been drained dry, then we'd open our reserves and be the oil kings of the world. For as long as they lasted.

That has been my thinking on the subject...
--
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Zoder

join:2002-04-16
Miami, FL
reply to Snakeoil
said by Snakeoil:

Electric cars are out, thanks to the EPA running around shutting down power plants that run on coal. At least until more power plants that use boilers that are heated by natural gas. Which seems to be abundant thanks to the wonderful fraking that has been going on.

I read that electric prices will also be through he roof this year, until they get more natural gas power plants on line.

That depends where you live. In Florida, FPL uses 63.83% NG, 20.12% Nuclear, 5.10% Coal, 0.94% Oil, 0.06% Solar, and 9.95% purchased power.

Kearnstd
Space Elf
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join:2002-01-22
Mullica Hill, NJ
kudos:1
reply to Aygeear
I want to know why oil prices went up when people got more efficient cars and caused a decrease in demand. That goes completely against how economics works.

If the Shop Rite is selling less of a flavor of soda they drop the price to reflect the lower demand.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports


DSL987

join:2000-03-22
Helotes, TX
said by Kearnstd:

I want to know why oil prices went up when people got more efficient cars and caused a decrease in demand. That goes completely against how economics works.

If the Shop Rite is selling less of a flavor of soda they drop the price to reflect the lower demand.

I'm going to assume you are young and have not heard of OPEC


Dolgan
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join:2005-10-01
Sun Prairie, WI
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reply to DSL987
I've been unsuccessful in my search for the long thread about oil and gas prices that used to be here and contained statements that I based my statement off of. Guess it got lost during the great DSLR crash.

quote:
said by Kearnstd:

I want to know why oil prices went up when people got more efficient cars and caused a decrease in demand. That goes completely against how economics works.

If the Shop Rite is selling less of a flavor of soda they drop the price to reflect the lower demand.
quote:
reply from DSL987
I'm going to assume you are young and have not heard of OPEC
It has nothing to do with OPEC and everything to do with refiners shutting down facilities as the demand for gasoline has decreased. Supply and Demand models no longer work in an era where producers are allowed to create false scarcity of a product by simply slowing or temporarily halting production. Furthermore, Canada is now the largest exporter of oil to the US. With the cheaper cost of Tar Sands Oil we should also see cheaper costs at the pump. Big Oil is just screwing over the average citizen in the name of Unfettered Capitalism. Since they have bought off both sides of the aisle with their huge lobby I foresee no end to the sham market that currently exists.


DSL987

join:2000-03-22
Helotes, TX
said by Dolgan:

quote:
reply from DSL987
I'm going to assume you are young and have not heard of OPEC
It has nothing to do with OPEC and everything to do with refiners shutting down facilities as the demand for gasoline has decreased. Supply and Demand models no longer work in an era where producers are allowed to create false scarcity of a product by simply slowing or temporarily halting production. Furthermore, Canada is now the largest exporter of oil to the US. With the cheaper cost of Tar Sands Oil we should also see cheaper costs at the pump. Big Oil is just screwing over the average citizen in the name of Unfettered Capitalism. Since they have bought off both sides of the aisle with their huge lobby I foresee no end to the sham market that currently exists.

Wouldn't you expect refiners to shut down non profitable refineries when demand decreases? Refineries economics usually dictate that they run at 100%, because they have large sunk costs, constant labor forces and maintenance has to be done at fairly specific intervals regardless of whether the refinery is running at 50% or 100%. Therefore they are generally run at max rate or not at all, because refining at 50% of capacity just doubles your costs. So if your only choice is to run at 100%, you have to find something to do with that extra product when demand goes down, which usually means exporting which drives up your costs. This is why some refineries have shut down in recent years, because they could not compete.

Those refiners with access to cheaper crudes have lowered their operating costs, but they will still sell their gasoline on the open market at global commodity prices. Additionally Canadian tar sand oil is much more expensive to process than light sweet crude oil so that has to be taken into consideration as well.


DSL987

join:2000-03-22
Helotes, TX
reply to Dolgan
said by Dolgan:

The thing I do not understand when it comes to the oil markets is why do we import the more expensive BRENT crude instead of using more of the crude oil we produce? Is it that much easier to refine that it justifies paying $10-20 more per barrel? Why aren't we refining more of the tar sands oil that has been selling in the $40-60 range instead of trying to build a pipeline so the Canadians have better access to a port so they can sell it on the world market and sell less to us?

Yes Brent is much easier to refine than tar sands oil. To refine tar sand oil you need a refinery that is equipped to deal with heavy crude oil. The Keystone pipeline is going to carry the oil to the Gulf Coast where there are already many refineries capable of processing this type of crude. It will displace Venezuelan and Mexican crude that many of those refineries now process.


Dolgan
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Sun Prairie, WI
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reply to DSL987
So you are telling me that refineries that have easy access to WTI, in addition to Oil from fracking and Tar Sands Oil, cannot refine and ship gasoline into economies that rely on the more costly BRENT and North Sea crude oil at a profit? I can understand that not every refinery is equipped to refine heavy crude, but you cannot honestly tell me that at an average difference of $60+/barrel there is not enough profit incentive to convert some refineries versus simply shutting them down entirely. Lastly, with new sources of oil coming online the "peak oil myth" prices we have been facing should be coming down instead of holding stable at their current high prices. We are on track to end the need for any Saudi/Middle Eastern/African oil by the end of the decade so our prices and international policies should reflect that reality.


DSL987

join:2000-03-22
Helotes, TX
The reason Tar Sand oil is so much cheaper (besides being lower quality) is because they cannot get it to people that want to use it. They are literally swimming in the stuff, and right now about the only way to transport it, is by rail which is VERY expensive. Not to say that it is not being done, because it is, but only on the lighter crudes. It is incredibly expensive to switch a refinery from processing light sweet crudes to heavy sour crudes, we are talking $ Billions just to switch one refinery. This is why it's easier to spend $5 Billion to build a pipeline to the US Gulf Coast where multiple refineries are already equipped to handle this crude.

Some East Coast refineries were recently saved from shut down by switching them from Brent crude to Bakken, but the cost of shipping it by rail car is still very expensive.


Blogger
Jedi Poster
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join:2012-10-18

2 edits
reply to Dolgan
said by Dolgan:

It has nothing to do with OPEC and everything to do with refiners shutting down facilities as the demand for gasoline has decreased. Supply and Demand models no longer work in an era where producers are allowed to create false scarcity of a product by simply slowing or temporarily halting production. Furthermore, Canada is now the largest exporter of oil to the US. With the cheaper cost of Tar Sands Oil we should also see cheaper costs at the pump. Big Oil is just screwing over the average citizen in the name of Unfettered Capitalism. Since they have bought off both sides of the aisle with their huge lobby I foresee no end to the sham market that currently exists.

Yep.

And no matter how often the above and lots more factual statements are made that basically say that when it comes to big oil you can count on the usual things such as:

No matter the crisis it's not the oil companies fault;

The oil companies are never at fault and they really love us and want the best for us in every way from price to availability to the environment;

The worse the crisis and according to the oil companies its never their fault but nevertheless they will still make incredible profit--no matter what;

Oil companies hold all the cards financially in that no matter what happens worldwide they will all ways be financially secure no matter how much it costs us. What are we going to do, take our business elsewhere?

The pseudo-monopoly oil companies are like cocaine dealers and the consumer and businesses that need petroleum products are the crack addicts--but addicts of the worse kind as there is no way that they can live without or get off the crack habit. We all literally need the crack AKA petroleum products to sustain our lives.

"We are from BP and we are here to help you."

The propaganda and shilling from and for the oil companies will never end while they rob us with kindness. Now that's something that you can count on until the day the oil is nevermore or we don't need it. Either way none of us currently living will be alive if that time comes.

--
The signal is usually drowned out by the noise.


Dolgan
Premium
join:2005-10-01
Sun Prairie, WI
reply to DSL987
It could very easily be shipped upon the Great Lakes and thru the St Lawrence Seaway, but not surprised to see the excuses piling up as to why it isn't being used more.


DSL987

join:2000-03-22
Helotes, TX
said by Dolgan:

It could very easily be shipped upon the Great Lakes and thru the St Lawrence Seaway, but not surprised to see the excuses piling up as to why it isn't being used more.

First you have to get it to the Great Lakes, and that pipeline is also stalled, as is a proposed pipeline going to the West Coast.


Aygeear
A Day Late And A Dollar Short

join:2000-12-03
Stockton, CA
reply to Dolgan
said by Dolgan:

So you are telling me that refineries that have easy access to WTI, in addition to Oil from fracking and Tar Sands Oil, cannot refine and ship gasoline into economies that rely on the more costly BRENT and North Sea crude oil at a profit?.... Lastly, with new sources of oil coming online the "peak oil myth" prices we have been facing should be coming down instead of holding stable at their current high prices. We are on track to end the need for any Saudi/Middle Eastern/African oil by the end of the decade so our prices and international policies should reflect that reality.

Although recent news articles have predicted that new methods of oil and gas drilling will produce huge quantities of oil, the Massachusetts Institute of Technology (MIT) published a report indicating that hydraulic fracturing to recover the oil in shale will boost U.S. production, but it won't bring energy independence. The MIT report further predicts that, at present rates of consumption, the reserves of shale oil will begin to diminish in as little as seven (7) years! Furthermore, the Obama administration and the EPA intend to enforce much stricter regulations and taxes that will effectively curb any benefits from the new technology. Obama is expected to tighten rules and regulations governing energy exploration, actions that may add billions in costs for oil and gas companies.
--
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Aygeear
A Day Late And A Dollar Short

join:2000-12-03
Stockton, CA
reply to Dolgan
said by Dolgan:

I've been unsuccessful in my search for the long thread about oil and gas prices that used to be here and contained statements that I based my statement off of. Guess it got lost during the great DSLR crash.

This might be the thread you're looking for:»Here we go again, folks


Blogger
Jedi Poster
Premium
join:2012-10-18

1 edit
reply to Aygeear
said by Aygeear:

Furthermore, the Obama administration and the EPA intend to enforce much stricter regulations and taxes that will effectively curb any benefits from the new technology. Obama is expected to tighten rules and regulations governing energy exploration, actions that may add billions in costs for oil and gas companies.

When it comes to big oil the government does over-regulate and over tax but sort of "makes up" for it by under enforcing those regs, particularly the safety ones, resulting in more "accidents" in oil facilities or operations that produce fatalities and serious injuries to workers or people nearby. Also, often more property and/or environmental damage too.

The "accidents" will not change the continued over regulating and under enforcement but they will produce more revenue for the government via levies, taxes, or fines.

The oil and gas companies will make up for the costs of the above by charging the generic consumers more money, (actually probably in the big picture not only more than more.)

It will also not be surprising if along with the increased costs comes increased or record profits too. It's been known to happen in the past.

--
The signal is usually drowned out by the noise.


DSL987

join:2000-03-22
Helotes, TX
reply to Aygeear
Here is part of an article recently published on producers efforts at getting bitumen oil to market.

"Persistently large discounts for Western Canadian crude -- referred to in Calgary as the 'bitumen bubble' -- are forcing producers to find creative solutions to get their crude to key markets. Mid-sized oil sands producer MEG Energy said last week that it will start using barges to transport diluted bitumen down the Mississippi River so that it can reach US Gulf Coast refineries. The barges will help MEG bypass bottlenecked pipelines to the US, which along with the boom in US crude production have weighed heavily on Western Canadian oil producers for more than a year. Starting later this year, MEG will use trains to transport its entire 32,000 b/d of output to US inland waterways near Chicago, where it will be loaded onto giant flat-bottomed barges destined for the Gulf Coast. "The idea that barges and rails can reach multiple refiners is a fundamental shift in how the business is run," MEG Chief Executive Bill McCaffrey said during an earnings call last week.

MEG is following the example of another oil sands producer, Southern Pacific Resources, which recently began shipping bitumen from Northern Alberta to the
US Gulf Coast using a combination of trucks, trains and Mississippi barges. Valero Energy is also reportedly looking at shipping heavy Canadian crude to Texas refineries via the Mississippi. While the idea of moving crude by barge is hardly new, it is unfamiliar territory for producers of landlocked Alberta crude who have long focused solely on pipelines for market access. But with the price discount for Western Canadian Select (WCS) crude and West Texas Intermediate (WTI) topping US$40 per barrel in the past few weeks, Canadian producers have little choice but to explore new modes of transportation.

MEG provides a good example of Canadian oil producers' recent struggles. Despite increasing production by 8% in the fourth quarter, it suffered a net loss
of C$19 million (US$19 million), despite achieving what the company described as "industry best" netbacks. And like many other oil sands producers, MEG's output is expected to rise sharply this year when the second phase of its Christina Lake project comes on line, doubling the company's production capacity.

Looming in the background are producers' fears of further delays or outright cancellation of the three major new pipeline projects -- Northern Gateway to the West Coast, Keystone XL to the US Gulf and the expansion of the Trans Mountain line to Vancouver. Meanwhile, railroad companies have been a big beneficiary of the jammed up pipelines. A report released earlier this year by Calgary-based bank Peters & Co. indicated that crude shipped by rail from Western Canada to the US Gulf Coast and Eastern Canada has more than doubled since last fall to some 120,000 b/d. And oil sands producer Nexen -- which is in the process of being taken over by China's CNOOC -- says it recently initiated talks with the Pacific port of Prince Rupert about shipping crude there by rail."


Dolgan
Premium
join:2005-10-01
Sun Prairie, WI
Reviews:
·Charter
reply to DSL987
Actually, now that the previous thread has been pointed out to me, it was you that pointed out how much BRENT we are refining.

quote:
said by Dolgan:

Light, Sweet Crude closed at $87.41{aKa NYMEX or WTI}. This is the oil that the US Market generally uses and has been the price basis used in this thread.

BRENT is at $100.75 and is oil that generally goes to the European Market.

As for OPEC, the Saudi target price is/has been $75-$80 and it is the Iranians who are shooting for the $100+ price target. Also, the Saudis have been preparing their Red Sea terminals to switch back to crude oil instead of the Natural Gas that has been being shipped most recently. It will help make up for the loss of Iranian Oil and is also a pre-emptive measure in case Iran tries to block the Straits. Growth has been slowing across the globe and the bump in price is due more to the fuller sanctions against Iran kicking in on July 1 than anything else.
Your reply:
quote:
I'll agree with you that this thread is about WTI, but we should be talking about Brent, not WTI/Nymex. We are importing roughly 60% of our crude, this is based on Brent prices. Of the remaining 40% that is produced here, only the crude trapped in the Mid-Continent is selling at WTI/Nymex levels. Production in the Gulf Coast is selling near Brent prices not WTI.
page 26 of this thread: »Here we go again, folks

Maybe I am misunderstanding what current conditions are, but at least at that time you stated the majority of the oil we were refining was BRENT.


DSL987

join:2000-03-22
Helotes, TX
I actually said crudes based off the price of Brent, so crudes that are similar to Brent and available on the water.

A bit confusing I know, I should have been clearer


DSL987

join:2000-03-22
Helotes, TX
reply to Aygeear
Crude Oil (WTI) USD/bbl. 95.71
Crude Oil (Brent) USD/bbl. 118.65

Gap between Brent and WTI widening again, now up to almost $23


DSL987

join:2000-03-22
Helotes, TX
reply to Aygeear
Great article on the regional variations in refining.

»www.wealthlift.com/blog/oil-refi···riation/


DSL987

join:2000-03-22
Helotes, TX

1 edit
reply to Aygeear
bleh...double post


marigolds
Gainfully employed, finally
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join:2002-05-13
Saint Louis, MO
kudos:2
reply to Snakeoil
said by Snakeoil:

I disagree. Failure to comply with EPA standards equates to you getting shut down. Hence EPA shutting them down is appropriate.

I was listening to a talk radio show the other day, either Rush or Mike Trivisonno. They talked about an "EPA" raid on a coal fired power plant in Texas, that resulted in another 200 plus innocent Americans becoming unemployed, and our power production being reduced.

Hence, the EPA shut them down.

It's more complicated than that. The EPA cannot shut you down just because you violate air standards. But they can keep you from upgrading the plant unless you add modern emission controls. You can run the plant for as long as you want without upgrades, but eventually their relative efficiency is too low compared to a new plant. So you just mothball the old plant until demand gets high enough to make it worthwhile to do the efficiency upgrades and the emissions controls.

What happened in Texas is that a company upgraded an old plant secretly without permitting and obviously without new emissions controls. This, of course, made the emissions out of the plant even higher than before. The company did not have much choice, they have the largest debt load of any company in US history thanks to a very badly timed leveraged buyout.

The plant was not actually shut down either. The EPA issued a notice of violation, which could result in fines, but it will take years to resolve that notice. In the meantime, the plant can operate free of fines or any other interference. Once the record of decision is final, then if the plant is in violation it will start accumulating fines, which would probably lead to a shutdown.
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Dolgan
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join:2005-10-01
Sun Prairie, WI
Reviews:
·Charter
Thank you for the input. I had thought that older, coal burning plants had been "grandfathered" in so they could still operate but was not sure. The owners chose to milk the profits for the decades that emission controls have been in place instead of upgrading the plants over time. Guess all those "Clean Coal" ads their Industry puts out must be lies, based upon a technology that does not exist yet, or technology that is too expensive to realistically use.

It is the same old excuses and crying by Corporations extolling heavy handed regulation by the Government as the cause of the trouble they have created for themselves over time. Corporations, and Society as whole, has such a myopic focus upon short term profit that they have forgotten the importance of what long term planning, Capital Investment in the Business' core infrastructure over time, and investment in their workforce are required for the long term health of Company. This is what happens when a society becomes focused upon greed and personal gain at the expense of social and personal responsibility.


IIIBradIII
Comm M-E-L Instr

join:2000-09-28
Greer, SC
said by Dolgan:

This is what happens when a society becomes focused upon greed and personal gain at the expense of social and personal responsibility.

Forget corps. Our own *government* is the embodiment of that.


Aygeear
A Day Late And A Dollar Short

join:2000-12-03
Stockton, CA
said by IIIBradIII:

Forget corps. Our own *government* is the embodiment of that.

Right, forget our financial problems, let's play golf with Tiger Woods. That will make everybody HAPPY!