Midwest Gasoline to Spike $0.50-$1.00 Per gallon

[Torvy]

The point is that in time of a major war, we have the resources and the ability to refine them domestically. We have had that in the past. This all became abundantly clear when OPEC tried to use its market size to push the US into abandoning its allies. It is not that the country itself controls the assets directly, as you suggest, but that they are readily available here for domestic use if needed.

 

[MossRoad]

The point is that in time of a major war, we have the resources and the ability to refine them domestically. We have had that in the past. This all became abundantly clear when OPEC tried to use its market size to push the US into abandoning its allies. It is not that the country itself controls the assets directly, as you suggest, but that they are readily available here for domestic use if needed.

Yes. It's already here. "We" (I use that term loosely) already have the production. The government isn't preventing any of that. Private industry has chosen to sell it on the international market. And, they have plenty of unused oil leases in the bank. As mentioned, it's a small percentage of government oil leases that the government can control, while the majority of oil leases in the US are on private and state lands, not FED lands.

When the Saudis or other oil producers cut production to raise prices, the companies that extract it in the US raise their prices and sell it on the open market to fill the gap left by the OPEC type nations.

IF there's a war, the government can prevent it from leaving the country. In the mean time, it's supply and demand capitalism. Private industry and foreign government profits are to blame for the rise in oil prices worldwide.

 

[Torvy]

That is not the point, and I suspect you know it.

We had been producing enough to use domestically. It is not best to do so because the heavy crude is cheaper. Effectively, in peacetime it is better to sell the light sweet crude abroad (at higher prices than heavy) and buy cheaper heavy crude and refine that and sell the refined products. In wartime, we keep those domestic.

Now we are not producing as much as we use. We also drained our strategic reserves to help polling. If we have a real crisis, we will need years to redirect resources and start drilling more...and get pipelines moving as they are a safer, more efficient way to move oil.

 

[MossRoad]

That is not the point, and I suspect you know it.

We had been producing enough to use domestically. It is not best to do so because the heavy crude is cheaper. Effectively, in peacetime it is better to sell the light sweet crude abroad (at higher prices than heavy) and buy cheaper heavy crude and refine that and sell the refined products. In wartime, we keep those domestic.

Now we are not producing as much as we use. We also drained our strategic reserves to help polling. If we have a real crisis, we will need years to redirect resources and start drilling more...and get pipelines moving as they are a safer, more efficient way to move oil.

To that I say, it's all controlled by private industry. They are the culprits in the rising fuel costs, not the government. Put the blame squarely on the problem... profits.

Infographic: Oil & Gas Giants Cash in Tens of Billions

This chart shows how major oil companies' profits have increased over the past years.

www.statista.com

 

[jyoutz]

While I agree their has been political pressure exertion against Oil ad gas in general, there are other factors like profitability for oil companies and especially small operators, many went broke and lost everything or were bought out by big fish and consolidated when they had to pay to get rid of crude production in 2020.

Shutting down refineries isn't helping the retail cost of diesel and gas in the US either.

Some of the oil companies might follow their corporate mission statement of "highest return" to share holders and in some cases that means shutting down a functioning refinery.
Doing so certainly will not make gasoline or diesel less expensive.

Some of the shut down refineries since Covid
Many of which the claim is "to convert in some way to renewables"
I am going to take that with a grain of salt , because the immediate effect is higher prices at the pump.. Other things like storm damage and being old and unprofitable were mentioned as well

Shell Convent, St. James, LA
Marathon, Martinez, CA and Gallup, NM. Capacity: 161,000 bpd (Martinez); 27,000 bpd (Gallup)
Phillips 66, Rodeo, CA and Belle Chasse, LA. Capacity: CA: 120,200 bpd, LA: 255,000 bpd
Hollyfrontier, Cheyenne, WY. Capacity: 52,000 bpd
Calcasieu Refining, Lake Charles, LA. Capacity: 135,500 bpd
Limetree Bay Energy, St. Croix, USVI. Capacity: 210,000 bpd

A ninth, LYONDELLBASELL planned in 2025 to shut down its refinery.. and so on.

This info is about a year old so looking to see if some of these plants are back on line or if others have also closed.

Oil Refinery Closures in an Era of Transition

If the US isn’t ready to move to biofuels, it could become a slippery slope.

www.powderbulksolids.com

I’m not sure that this tells the whole story. For example, the refinery closure at Gallup, NM. It is a very small refinery and the large refinery at Jamestown, NM, 30 miles east increased its capacity with expansion. Now the crude that was refined at Gallup goes to the large refinery. This is also the case for Gulf coast refineries; consolidation of refining but not necessarily reduced production. I would be interested in knowing what has happened with refining capacity.

 

[Torvy]

To that I say, it's all controlled by private industry. They are the culprits in the rising fuel costs, not the government. Put the blame squarely on the problem... profits.

Infographic: Oil & Gas Giants Cash in Tens of Billions

This chart shows how major oil companies' profits have increased over the past years.

www.statista.com

Not at all, it's governments. Who raised crude prices? OPEC governments (and other nation-states with oil capacity).

Those companies are regulated by governments. They cannot simply build a refinery or drill for oil or build a pipeline if they feel like it. Permits, studies, etc drive up cost.

Corporate profits are complicated. If you don't understand the details of the accounting, the numbers mean little. For example, if a hypothetical government prevents an oil company from investing in future production and transportation, the profit will go up because of lower short-term expenses. (Of course, those projects mean jobs and investment for individuals and other entities, but that's a whole other level of detail.) Companies sometimes choose to realize profits in the near term if they expect taxes to go up. These are just 2 quick examples of how profits don't tell a story.

 

[Hay Dude]

A huge oil refinery in Philadelphia had a fire in 2019 and never was rebuilt. It processed 335,000 barrels of oil per day! Largest on the east coast.

 

[Hay Dude]

Yes. It's already here. "We" (I use that term loosely) already have the production. The government isn't preventing any of that. Private industry has chosen to sell it on the international market. And, they have plenty of unused oil leases in the bank. As mentioned, it's a small percentage of government oil leases that the government can control, while the majority of oil leases in the US are on private and state lands, not FED lands.

When the Saudis or other oil producers cut production to raise prices, the companies that extract it in the US raise their prices and sell it on the open market to fill the gap left by the OPEC type nations.

IF there's a war, the government can prevent it from leaving the country. In the mean time, it's supply and demand capitalism. Private industry and foreign government profits are to blame for the rise in oil prices worldwide.

The current administration IS currently fighting a proxy war with Russia.
Upwards of 100 billion spent.
We are at war.

 

[Hay Dude]

So it sounds like we need a new and improved farmers co-op that gets a refinery or two going in the Panhandle to refine WTI into diesel. Members only sales.

I’m in.

 

[jyoutz]

Not at all, it's governments. Who raised crude prices? OPEC governments (and other nation-states with oil capacity).

Those companies are regulated by governments. They cannot simply build a refinery or drill for oil or build a pipeline if they feel like it. Permits, studies, etc drive up cost.

Corporate profits are complicated. If you don't understand the details of the accounting, the numbers mean little. For example, if a hypothetical government prevents an oil company from investing in future production and transportation, the profit will go up because of lower short-term expenses. (Of course, those projects mean jobs and investment for individuals and other entities, but that's a whole other level of detail.) Companies sometimes choose to realize profits in the near term if they expect taxes to go up. These are just 2 quick examples of how profits don't tell a story.

There was a time before the 1920s before there was any government regulations. I believe that history books refer to that as the robber baron oligarchy period.