Gas prices: worse than '81 oil shock (1 Viewer)

[Doug B]

Or do we say enough is enough.. Cut back on consumption, start doing our own drilling and truly look for alternative energy instead of all talk and no substance.

Until that happens we will have no choice but to pay what they charge.

Dovetailing nicely into what DeathBytes posted. I feel a lot smarter today ...

Schizm, thanks also for your response and links. I've read a lot about China's extensive role in gas pricing before. My impression from those readings is that if China were to suddenly vanish tomorrow, gas would be about a nickel per gallon

 

[PatsWillWin]

3. Make hybrid engines mandatory. The quality of engines is to the point now where it rivals combustion engines. making it standard should help lower the cost of hybrid vehicles as well.

Could the federal government actually do this?I would think it more likely/pragmatic to make hybrid engines (or other alternatively fueled automobiles) the clearly better choice over fuel powered engines by using economic influences.(SEE: Great Britain)

 

[Rayderr]

3. Make hybrid engines mandatory. The quality of engines is to the point now where it rivals combustion engines. making it standard should help lower the cost of hybrid vehicles as well.

Could the federal government actually do this?I would think it more likely/pragmatic to make hybrid engines (or other alternatively fueled automobiles) the clearly better choice over fuel powered engines by using economic influences.

Not much different than how leaded gasoline engines were phased out years ago. And there already currently is a law out there requiring auto manufacturers to have their vehicles hit X mpg by the year Y (I can't remember the numbers.)

 

[Doug B]

Actually, my comments dealt more with crude oil prices and how they affect gasoline prices.

My mistake -- you were talking about use of the U.S.'s own strategic oil reserve. Of course, that's pre-refining.Question -- is any part of the U.S. oil reserve imported oil? Or is it all homegrown?

 

[CRay]

What the article misses is that our energy costs have actually gone DOWN since 1981, from almost 14% of GDP to less than 10% Link That’s why we’re able to stomach higher gas prices and demand has yet to drop off.

In fact, gasoline demand is up 1.7% YTD over last year and up 1% for the last 4 weeks.

Gasoline inventories are almost 10% below the 5-yr average – at least they’ve started to improve over the last two weeks because gasoline imports increased, but imports still remain sluggish versus last year. One of the reasons our gasoline stocks are so low is because imports have been lower and haven’t added the relief to the market that we saw in 2006.

 

[Death Bytes]

3. Make hybrid engines mandatory. The quality of engines is to the point now where it rivals combustion engines. making it standard should help lower the cost of hybrid vehicles as well.

Could the federal government actually do this?

They already help promote them buy giving tax breaks for the purchase of them. But making them mandatory would put a huge burden on the auto industry, which even when done wouldn't eliminate our dependence on foriegn oil.

 

[PatsWillWin]

3. Make hybrid engines mandatory. The quality of engines is to the point now where it rivals combustion engines. making it standard should help lower the cost of hybrid vehicles as well.

Could the federal government actually do this?I would think it more likely/pragmatic to make hybrid engines (or other alternatively fueled automobiles) the clearly better choice over fuel powered engines by using economic influences.

Not much different than how leaded gasoline engines were phased out years ago. And there already currently is a law out there requiring auto manufacturers to have their vehicles hit X mpg by the year Y (I can't remember the numbers.)

That's true.Wouldn't this kind of law though, more than the other regulations you've mentioned, have a massive impact on the economy? Particularly the domestic automobile industry, which in my uneducated opinion would be less prepared for such a shift than would the foreign automobile industry?

 

[Flash]

Well thank god the democrats are in charge of congress now and are taking care of it. Gas prices should drop any minute now.

 

[mr. furley]

3. Make hybrid engines mandatory. The quality of engines is to the point now where it rivals combustion engines. making it standard should help lower the cost of hybrid vehicles as well.

Could the federal government actually do this?I would think it more likely/pragmatic to make hybrid engines (or other alternatively fueled automobiles) the clearly better choice over fuel powered engines by using economic influences.

Not much different than how leaded gasoline engines were phased out years ago. And there already currently is a law out there requiring auto manufacturers to have their vehicles hit X mpg by the year Y (I can't remember the numbers.)

whoa whoa whoa.. back off the algebra here, gb. some of us are getting confused.

 

[Alan Smithee]

gas goes up 50% in 6 weeks and we're supposed to just shrug our shoulders and say "that's just the way it is"?

What else do you suggest?

It is what it is. You can show all the outrage you want. But as long as you keep buying SUV's to drive to work and keep buying the gas they will continue to charge what they want when they want.

I still can't get over watching a news report about the cost of gas..

They interviewed one person after another driving SUV's alone on their way to work complaining about the price of gas.

people are complaining because something that was once reasonable.. has nearly doubled in very short order.of course people are going to complain. it's shocking.

my fiancee has no choice but to commute to work right now.. she's dropping $45 a week in the tank. $180 a month. we're not exactly banking chet money over here. and she drives a car that's getting appx 30-32 mpg. not a gas guzzler by current standards.

50% is "nearly double"?

I paid $1.79/gallon a little over a year ago. On Friday I paid $3.42 a gallon.

According to this chart (you have to scroll down a litte), regular grade was selling for about $2.90 a year ago.The interesting thing to note on that chart is the wild swings in gas over the last two years. If I was in charge of OPEC (and if OPEC controlled the price of gas), this is exactly the plan I would institute. If you keep prices at or above $3/gal all the time, it would eventually lead to some permanent behavioral changes in energy use by consumers, spur widespread interest in alternative energy, and lessen the demand for your product. If you let the price fall back down to "tolerable prices", around $2/gal once in a while, people go back to their old patterns of energy use, alternative energy investment becomes riskier and demand for your product continues to rise.

The only real, quick way to spur major alternative energy investment if for the gov't to never let the price of gas fall below a floor price that they set, say $4 a gallon. This would reassure investors in alternative energy that they cannot be undercut by low gas prices in the future and would lead to an enormous influx of capital into this research. Unfortunately, this will never happen.

 

[Rayderr]

3. Make hybrid engines mandatory. The quality of engines is to the point now where it rivals combustion engines. making it standard should help lower the cost of hybrid vehicles as well.

Could the federal government actually do this?I would think it more likely/pragmatic to make hybrid engines (or other alternatively fueled automobiles) the clearly better choice over fuel powered engines by using economic influences.

Not much different than how leaded gasoline engines were phased out years ago. And there already currently is a law out there requiring auto manufacturers to have their vehicles hit X mpg by the year Y (I can't remember the numbers.)

That's true.Wouldn't this kind of law though, more than the other regulations you've mentioned, have a massive impact on the economy? Particularly the domestic automobile industry, which in my uneducated opinion would be less prepared for such a shift than would the foreign automobile industry?

I really don't see why. They're already making hybrid engines, so it's not like we're asking them to come up with new technology. We're also not saying that everyone with a combustion engine has to stop driving their vehicles. If the U.S. said "ok automakers, by the year 2017, all your vehicles that you sell in the US must have hybrid engines." That'll give the automakes plenty of time to make any necessary adjustments by slowly phasing in the hybrids and phasing out the combustion engines. It's not an instant solution, but rather one that will work long term.

 

[Jack Burton]

Bottom line is we all have to change our driving habits. Until then expect to be gouged by the oil companies.

 

[CRay]

Bottom line is we all have to change our driving habits. Until then expect to be gouged by the oil companies.

If oil companies can fix oil prices, why weren’t they doing it in 1998 when oil went to $10?

 

[FavreCo]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

 

[mr. furley]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

 

[Schlzm]

The most recent reason I have seen for the sudden increase to the price of oil is because Mr. Chaves decided to nationalize the oil industry and back out of OPEC, among other things. Actions such as this cause the futures market to freak out thus driving up the cost of fuels and other petrol based items.

Thanks for the response.There are some black boxes in your response that I would love to see opened (note that I'm not putting you personally on the hook for greater detail, as I'm sure these issues are pretty darned complicated). For instance, I didn't think Venezuela controlled a large enough percentage of the world's production to cause a "freak-out". Also, is the "freak out" warranted? Isn't Venezuela still selling oil on the market,only now in competition to OPEC? If so, why isn't this competition leading to a decrease in per-barrel prices?

And what exactly constitutes a "freak out"? Is that really a good enough excuse? Perhaps instead of "freaking out", there's some analysts out there that need to spend a little more time checking out the price environment, and not just clicking on the "INCREASE" button everytime anything changes.

Look, I'm just trying to apply some common sense to a ridiculously complex system. I know I'm missing loads of facts and nuances here. I would love just to understand, and be able to mentally account for the quick movement of the price I pay at the pump.

I don't have all the answers to your questions but I will try and add a little more insight and provide a few links as to why Venezuelas recent actions have cause the sudden changes to the futures markets.Major dealings with China

Takes over drilling operations from foreign companies.

Takes over local TelCo

Sweeping nationalization overview

Strategic agreements with China

Sweeping reforms throughout government

Add to this other activities around the world such as growing Russian hostility, Iranian hardlining, Iraq, some Royal ##### crashing his yacht in the ME, etc... etc... and it really starts to affect how investors trade on the futures markets and how OPEC decides to throttle output.

Schlzm

this type stuff has been happening for years and years and years. gas stayed relatively stable for most of my teens and 20s. we went through a war during that period, a conflict or three, saw the collapse of the USSR. we had major hurricanes, devestation of Kuwait and Iraq's oil fields...those are pretty major changes.... gas generally stayed the same or at least the fluctuations were "reasonable". now every other day or so we read another news article about how Bangladesh has experienced a drop in their birth rate by 0.00002% which has a(e)ffected the way oil is refined in Greenland so we can expect a 4 cent increase at the pump.

it's a joke

gas prices literally go up 4-5 cents every 2 to 3 days here.

Agreed, these types of events have been happening since forever. The major difference here is that there is no longer such a large price offset available to keep prices down, money is being spent elsewhere and the want to move away from foreign oil and oil altogether has stopped money being shifted into offsets by certain decision makers. A few other posters have already written better information about this than I have. It is my opinion though the most recent spike is due largely to Mr. Chavez and his sweeping changes in Venezuela. Unfortunately I wasn't able to link to several articles I wanted to, such as the nationalizing the banking system to include backing out of the World Bank, nationalization of the steel industry and of course sweeping changes to local oil production.Schlzm

double signature = too much

 

[culdeus]

Bottom line is we all have to change our driving habits. Until then expect to be gouged by the oil companies.

If oil companies can fix oil prices, why weren’t they doing it in 1998 when oil went to $10?

They wanted to consolidate the power to a few oil companies while killing off the mid-sized and squeezing the mom-and-pops to near death. Made acquisition easier as the cash flow was near 0 or negative for most fields. A few years of pain = long term gain[/tinfoilhat]

 

[FavreCo]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

 

[culdeus]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I know you've been here a few months, but try to go easy on furley. tia

 

[TommyGilmore]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

 

[PatsWillWin]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

I agree with this. And it is because of this that I think/hope that the move to hybrid engines exclusively can happen naturally.At some point, the cost of gasoline becomes prohibitive and SOME company is going to see that the time is right to hit the market hard with more and improved hybrid options.

I just don't think it's going to be U.S. companies. I just don't feel like they're on top of ####. The price of gas is constantly rising and I still feel like almost ALL of the Ford/GMC/Chevy commercials I see are pushing huge pickup trucks and SUV's.

 

[Flash]

should we not be enraged that Venezuelans pay $0.12 a gallon?

i mean.. we're paying a LOT more than that.

As soon as we can drill in our own backyard and supply our own oil then we can have those prices to.

BUT WE'RE AMERICA! just flipping the idea that we should all shut up because Europeans pay $7 a gallon. doesn't quite work like that... if we should eat #### because Europe pays double. shouldn't we be burning embassies because Venezuelans pay a fraction of what we do?

yeah it's stupid. but so is the idea that because Europeans are taxed outrageously.. that we should be content we're not.

dunno what the two have to do with each other. we're talking American gas prices.. not European.

You keep saying the Republicans are saying this, but I have only seen ONE person in here who has said that, he doesn't even live in the US!Please point out where all these Republicans are saying this.

TYVM

 

[PatsWillWin]

should we not be enraged that Venezuelans pay $0.12 a gallon?

i mean.. we're paying a LOT more than that.

As soon as we can drill in our own backyard and supply our own oil then we can have those prices to.

BUT WE'RE AMERICA! just flipping the idea that we should all shut up because Europeans pay $7 a gallon. doesn't quite work like that... if we should eat #### because Europe pays double. shouldn't we be burning embassies because Venezuelans pay a fraction of what we do?

yeah it's stupid. but so is the idea that because Europeans are taxed outrageously.. that we should be content we're not.

dunno what the two have to do with each other. we're talking American gas prices.. not European.

You keep saying the Republicans are saying this, but I have only seen ONE person in here who has said that, he doesn't even live in the US!Please point out where all these Republicans are saying this.

TYVM

I don't think he said this.The Republican comment was posted by someone else and I believe that he has since deleted it.

:flaps arms like a chicken:

 

[Schlzm]

Slightly related to this discussion, especially about US auto companies and moving away from standard internal combustion engines. Saw an ad for the new line of Saturn hybrids, one of them is a V-12? Anyone have a good grasp on how much a V-12 hybrid is going to save on fuel? I would think that a V-12 hybrid would probably be about as fuel efficient as a standard 6 or 4 cyl. Am I way off here?

Schlzm

 

[snogger]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

Why is that "schtick?? When is the last time a new refinery was built in the USA??I'll hang up and listen..

 

[snogger]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

Why is that "schtick?? When is the last time a new refinery was built in the USA??I'll hang up and listen..

Hi, thanks for taking my call:

The public has demanded that many governments place restrictions on contaminants that refineries release, and most refineries have installed the equipment needed to comply with the requirements of the pertinent environmental protection regulatory agencies. In the United States, there is strong pressure to prevent the development of new refineries, and no major refinery has been built in the country since Marathon's Garyville, Louisiana facility in 1976.

Best I could find on short notice.

 

[palmerville]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

Why is that "schtick?? When is the last time a new refinery was built in the USA??I'll hang up and listen..

1976?

 

[FavreCo]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

Why is that "schtick?? When is the last time a new refinery was built in the USA??I'll hang up and listen..

The crickets are a chirpin. It's basically not profitable to build a new refinery. http://www.tompaine.com/articles/2006/06/0..._refineries.php

Indeed, at a Senate hearing last year, BP’s chief executive officer explained that “[refinery] margins over the last 10 to 15 years have not been high enough on average to justify building a new refinery.” And in a recent closed-door briefing with congressional aides, an Exxon Mobil official said that company foresees no need to build new refineries at least through the year 2030.

By 2030, we will be well down the wrong side of peak oil. Thus, like I said, never.

 

[dickey moe]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

Why is that "schtick?? When is the last time a new refinery was built in the USA??

I was just about to ask the EXACT SAME THING.There are two factors at work here:1) The environmental regulatory hurdles to get new refineries permitted is nearly impossible. NIMBYism compounds this effect.2) The oil companies have no incentive to build new refineries, because it keeps the supply of refined product low, and with high demand, this perpetuates high gasoline prices.What I see happening, possibly in the not to distant future, is that things get bad enough where politicians will attempt to get the government to get more involved in the oil refining business, where we will get government-run refineries. Watch out.

 

[Flash]

should we not be enraged that Venezuelans pay $0.12 a gallon?

i mean.. we're paying a LOT more than that.

As soon as we can drill in our own backyard and supply our own oil then we can have those prices to.

BUT WE'RE AMERICA! just flipping the idea that we should all shut up because Europeans pay $7 a gallon. doesn't quite work like that... if we should eat #### because Europe pays double. shouldn't we be burning embassies because Venezuelans pay a fraction of what we do?

yeah it's stupid. but so is the idea that because Europeans are taxed outrageously.. that we should be content we're not.

dunno what the two have to do with each other. we're talking American gas prices.. not European.

You keep saying the Republicans are saying this, but I have only seen ONE person in here who has said that, he doesn't even live in the US!Please point out where all these Republicans are saying this.

TYVM

I don't think he said this.The Republican comment was posted by someone else and I believe that he has since deleted it.

:flaps arms like a chicken:

i love that this has fallen on party lines.

either it's Republicans saying "so what, Europeans pay $7 a gallon" or it's Dems saying "this is a crime!"

we're ALL taking it in the ###.

women fly off the handle when milk prices flux... and that's a few pennies. gas goes up 50% in 6 weeks and we're supposed to just shrug our shoulders and say "that's just the way it is"?

 

[FavreCo]

What I see happening, possibly in the not to distant future, is that things get bad enough where politicians will attempt to get the government to get more involved in the oil refining business, where we will get government-run refineries. Watch out.

No chance. Name 1 politician feeling the pinch of higher gas prices. They could care less. None of you are man enough to vote them out either. Case in point: Bush is still in the White House.

 

[PatsWillWin]

should we not be enraged that Venezuelans pay $0.12 a gallon?

i mean.. we're paying a LOT more than that.

As soon as we can drill in our own backyard and supply our own oil then we can have those prices to.

BUT WE'RE AMERICA! just flipping the idea that we should all shut up because Europeans pay $7 a gallon. doesn't quite work like that... if we should eat #### because Europe pays double. shouldn't we be burning embassies because Venezuelans pay a fraction of what we do?

yeah it's stupid. but so is the idea that because Europeans are taxed outrageously.. that we should be content we're not.

dunno what the two have to do with each other. we're talking American gas prices.. not European.

You keep saying the Republicans are saying this, but I have only seen ONE person in here who has said that, he doesn't even live in the US!Please point out where all these Republicans are saying this.

TYVM

I don't think he said this.The Republican comment was posted by someone else and I believe that he has since deleted it.

:flaps arms like a chicken:

i love that this has fallen on party lines.

either it's Republicans saying "so what, Europeans pay $7 a gallon" or it's Dems saying "this is a crime!"

we're ALL taking it in the ###.

women fly off the handle when milk prices flux... and that's a few pennies. gas goes up 50% in 6 weeks and we're supposed to just shrug our shoulders and say "that's just the way it is"?

I stand corrected.I also agree that that's BS and would also like to see Mr. Furley produce something to back this notion up.

 

[Rayderr]

What I see happening, possibly in the not to distant future, is that things get bad enough where politicians will attempt to get the government to get more involved in the oil refining business, where we will get government-run refineries.

Watch out.

No chance. Name 1 politician feeling the pinch of higher gas prices. They could care less. None of you are man enough to vote them out either. Case in point: Bush is still in the White House.

He won by default. The Democrats failed to put a candidate in the Presidential race.

 

[CRay]

We haven’t built a refinery since 1976, but refiners have added capacity to existing refineries. Today we can refine 17.5 million barrels of oil per day into products, up about 750,000 barrels per day over the last 5 years, or about 1% more each year. Meanwhile, gasoline demand is up 1-1.5% per year and diesel & distillate demand is up more like 3-4%.

 

[schaef2k]

Slightly related to this discussion, especially about US auto companies and moving away from standard internal combustion engines. Saw an ad for the new line of Saturn hybrids, one of them is a V-12? Anyone have a good grasp on how much a V-12 hybrid is going to save on fuel? I would think that a V-12 hybrid would probably be about as fuel efficient as a standard 6 or 4 cyl. Am I way off here?Schlzm

I think you are making the assumption that the V12 has the same individual cylinder (combustion chamber) size as a V8. The total volume of the combustion chambers is what will determine the how much gas is used.This is why you see the "liter" rating on the engine. A 5.0 liter V8 uses more gas than a 4.2 liter V8. That hybrid has 12 small cylinders as opposed to 6 or 4 larger ones.

 

[Andrew74]

I'm lazy and stopped reading half way through, so hopefully this isn't a repeat. We have lots of crude inventories but not enough ability to convert that to gasoline. Refineries are running in the high 80s of capacity due to fires, etc. We haven't added much refinery capacity in a significant way since the 70s and there are several reasons for that. One interesting issue was brought up at a conference i was at recently by a managing director at Goldman that output (globally) is at global production capacity. Lehman noted the same thing - we can't really pump much more oil to meet the growing demand, then you add in the rate of demand from China/India and it gets nasty. The same thing goes for refining capacity. The petroleum supply is at the world refining capacity. Needless to say, both are very bullish on commodities.

 

[schaef2k]

I'm lazy and stopped reading half way through, so hopefully this isn't a repeat. We have lots of crude inventories but not enough ability to convert that to gasoline. Refineries are running in the high 80s of capacity due to fires, etc. We haven't added much refinery capacity in a significant way since the 70s and there are several reasons for that. One interesting issue was brought up at a conference i was at recently by a managing director at Goldman that output (globally) is at global production capacity. Lehman noted the same thing - we can't really pump much more oil to meet the growing demand, then you add in the rate of demand from China/India and it gets nasty. The same thing goes for refining capacity. The petroleum supply is at the world refining capacity. Needless to say, both are very bullish on commodities.

The part I don't understand is the refining capacity. I looks like the oil companies are creating a bottleneck (or at least not addressing it) so they can keep prices high.Maybe they could reinvest some of those record profits into some more refinery capacity. They've only had 30 or so years now.

 

[Schlzm]

Slightly related to this discussion, especially about US auto companies and moving away from standard internal combustion engines. Saw an ad for the new line of Saturn hybrids, one of them is a V-12? Anyone have a good grasp on how much a V-12 hybrid is going to save on fuel? I would think that a V-12 hybrid would probably be about as fuel efficient as a standard 6 or 4 cyl. Am I way off here?Schlzm

I think you are making the assumption that the V12 has the same individual cylinder (combustion chamber) size as a V8. The total volume of the combustion chambers is what will determine the how much gas is used.This is why you see the "liter" rating on the engine. A 5.0 liter V8 uses more gas than a 4.2 liter V8. That hybrid has 12 small cylinders as opposed to 6 or 4 larger ones.

I understand the X.XL rating for each engine. However a 1.5L V-12 (18 total litres) will consume for fuel than a 2.0L V-8 (16 total litres) unless severe RPM governing and gear ratios are set in place. This is however why I asked for clarification about this newfangled V-12 hybrid, just curious about the hard data.Schlzm

 

[Andrew74]

I'm lazy and stopped reading half way through, so hopefully this isn't a repeat. We have lots of crude inventories but not enough ability to convert that to gasoline. Refineries are running in the high 80s of capacity due to fires, etc. We haven't added much refinery capacity in a significant way since the 70s and there are several reasons for that. One interesting issue was brought up at a conference i was at recently by a managing director at Goldman that output (globally) is at global production capacity. Lehman noted the same thing - we can't really pump much more oil to meet the growing demand, then you add in the rate of demand from China/India and it gets nasty. The same thing goes for refining capacity. The petroleum supply is at the world refining capacity. Needless to say, both are very bullish on commodities.

The part I don't understand is the refining capacity. I looks like the oil companies are creating a bottleneck (or at least not addressing it) so they can keep prices high.Maybe they could reinvest some of those record profits into some more refinery capacity. They've only had 30 or so years now.

I am not a commodity guy, so I don't know the answer. I do believe it takes quite a while to build one and there wasn't a big need for it until about 3 years ago (when you look at the data - there was a lot of spare capacity). The spare capacity has been pretty steady since the mid-90s then contracted sharply starting in 2003. I also think there are some pretty hefty regs envolved, but maybe somebody else can comment on that.

 

[BGP]

The current price increases are due to problems in gasoline supplies and refinery output.

While crude oil prices have fallen over the last few weeks and oil supplies are high in the United States, problems at several refineries have crimped gasoline output ahead of the summer driving season.

The refinery problems include fires, power outages, and longer-than-usual maintenance periods.

XWhat have I been saying on this board for the last 3-4 years? There is a COMMODITIES BULL MARKET. OIL, GOLD, COPPER, ETC. ITS ALL GOING UP. Its not the refineries.

Big Oil went on the defensive Wednesday, getting grilled before a House panel and denying accusations that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices.

And the oil companies are GD right, too. This is being caused by YOUR GOVERNMENT. Your government has been powering up inflation to ward off an economic slide. The price you pay for that is HIGHER COMMODITIES. Sooner of later, that will spill into the general market and all prices will start shooting up. The government causes the problem, and then it acts innocent and tries to paint "Big Oil" as the culprit. The oil companies should be absolutely P.O.'ed over this.

 

[schaef2k]

Slightly related to this discussion, especially about US auto companies and moving away from standard internal combustion engines. Saw an ad for the new line of Saturn hybrids, one of them is a V-12? Anyone have a good grasp on how much a V-12 hybrid is going to save on fuel? I would think that a V-12 hybrid would probably be about as fuel efficient as a standard 6 or 4 cyl. Am I way off here?Schlzm

I think you are making the assumption that the V12 has the same individual cylinder (combustion chamber) size as a V8. The total volume of the combustion chambers is what will determine the how much gas is used.This is why you see the "liter" rating on the engine. A 5.0 liter V8 uses more gas than a 4.2 liter V8. That hybrid has 12 small cylinders as opposed to 6 or 4 larger ones.

I understand the X.XL rating for each engine. However a 1.5L V-12 (18 total litres) will consume for fuel than a 2.0L V-8 (16 total litres) unless severe RPM governing and gear ratios are set in place. This is however why I asked for clarification about this newfangled V-12 hybrid, just curious about the hard data.Schlzm

I could be wrong as I'm no expert (nor did I stay at a Holiday Inn) on engine lingo but I thought the liter rating was for the entire engine. So 1.5L V-12 would use less gas then a 2.0 Liter V-8 (just plugging in numbers, a 2.0 V-8 would be a damn small V-8).Can anyone elaborate?

 

[BGP]

How many years have I been b######g about gold?

What has your government done?

1. MASSIVE debt spending.

2. Cut interest rates.

3. Cut taxes.

All of this is highly inflationary put together.

So the value of the US Dollar starts falling. Commodities start rising. I've gone over this again and again.

STOP BLAMING THE OIL COMPANIES.

 

[Schlzm]

The current price increases are due to problems in gasoline supplies and refinery output.

While crude oil prices have fallen over the last few weeks and oil supplies are high in the United States, problems at several refineries have crimped gasoline output ahead of the summer driving season.

The refinery problems include fires, power outages, and longer-than-usual maintenance periods.

XWhat have I been saying on this board for the last 3-4 years? There is a COMMODITIES BULL MARKET. OIL, GOLD, COPPER, ETC. ITS ALL GOING UP. Its not the refineries.

Big Oil went on the defensive Wednesday, getting grilled before a House panel and denying accusations that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices.

And the oil companies are GD right, too. This is being caused by YOUR GOVERNMENT. Your government has been powering up inflation to ward off an economic slide. The price you pay for that is HIGHER COMMODITIES. Sooner of later, that will spill into the general market and all prices will start shooting up. The government causes the problem, and then it acts innocent and tries to paint "Big Oil" as the culprit. The oil companies should be absolutely P.O.'ed over this.

This brings up another question. BIG Oil? Is there little or midlevel oil? IS there some tiny refinery in the middle of nowhere Texas next to a town where the gas costs like .10$ a gallon? The whole BIG label has always bothered the crap out of me.Schlzm

 

[Schlzm]

Slightly related to this discussion, especially about US auto companies and moving away from standard internal combustion engines. Saw an ad for the new line of Saturn hybrids, one of them is a V-12? Anyone have a good grasp on how much a V-12 hybrid is going to save on fuel? I would think that a V-12 hybrid would probably be about as fuel efficient as a standard 6 or 4 cyl. Am I way off here?Schlzm

I think you are making the assumption that the V12 has the same individual cylinder (combustion chamber) size as a V8. The total volume of the combustion chambers is what will determine the how much gas is used.This is why you see the "liter" rating on the engine. A 5.0 liter V8 uses more gas than a 4.2 liter V8. That hybrid has 12 small cylinders as opposed to 6 or 4 larger ones.

I understand the X.XL rating for each engine. However a 1.5L V-12 (18 total litres) will consume for fuel than a 2.0L V-8 (16 total litres) unless severe RPM governing and gear ratios are set in place. This is however why I asked for clarification about this newfangled V-12 hybrid, just curious about the hard data.Schlzm

I could be wrong as I'm no expert (nor did I stay at a Holiday Inn) on engine lingo but I thought the liter rating was for the entire engine. So 1.5L V-12 would use less gas then a 2.0 Liter V-8 (just plugging in numbers, a 2.0 V-8 would be a damn small V-8).Can anyone elaborate?

 

[CRay]

5 years from now you will dream about $3 gas as you pay $4-6 a gallon. Demand keeps going up and production cannot. There won't be another refinery built....ever.

Wow, that's sad. Pretty simple concept that you are unable to grasp. The price will continue to go up until demand drops.

I think Furley was confused by your claim that "there won't be another refinery built....ever." It's good right-wing schtick but it's speculative bluster at best.

Why is that "schtick?? When is the last time a new refinery was built in the USA??

I was just about to ask the EXACT SAME THING.There are two factors at work here:1) The environmental regulatory hurdles to get new refineries permitted is nearly impossible. NIMBYism compounds this effect.2) The oil companies have no incentive to build new refineries, because it keeps the supply of refined product low, and with high demand, this perpetuates high gasoline prices.What I see happening, possibly in the not to distant future, is that things get bad enough where politicians will attempt to get the government to get more involved in the oil refining business, where we will get government-run refineries. Watch out.

In addition to the NIMBY issues…it costs ~$25,000-$30,000 per barrel of throughput capacity to build a new refinery (throughput capcity = how much crude you can crack into products). Meanwhile, investors are only willing to value that refining capacity at $17,000/bbl (using Valero, the largest independent refiner as a proxy).Until prices get to a level where reinvestment makes sense, we’re only going to get marginal capacity additions.

 

[snogger]

How many years have I been b######g about gold?What has your government done? 1. MASSIVE debt spending.2. Cut interest rates.3. Cut taxes.All of this is highly inflationary put together.So the value of the US Dollar starts falling. Commodities start rising. I've gone over this again and again.STOP BLAMING THE OIL COMPANIES.

Whoa.. I think someones next shot is over due.

 

[BGP]

I'm also telling you this is a CLASSIC way to turn a free society into an empire.

1. The government creates MASSIVE inflationary pressures.

2. The public doesn't understand economics, and when inflation appears, the public blames BUSINESSES and not the government.

3. The government rides in on a white horse to "protect" the people from "the free market" and establishes tight controls on economic activity.

4. The people lose the financial freedom, and that's when they essentially become slaves.

 

[PatsWillWin]

I'm also telling you this is a CLASSIC way to turn a free society into an empire.1. The government creates MASSIVE inflationary pressures.2. The public doesn't understand economics, and when inflation appears, the public blames BUSINESSES and not the government.3. The government rides in on a white horse to "protect" the people from "the free market" and establishes tight controls on economic activity.4. The people lose the financial freedom, and that's when they essentially become slaves.

Where has this happened before?

 

[BGP]

How many years have I been b######g about gold?What has your government done? 1. MASSIVE debt spending.2. Cut interest rates.3. Cut taxes.All of this is highly inflationary put together.So the value of the US Dollar starts falling. Commodities start rising. I've gone over this again and again.STOP BLAMING THE OIL COMPANIES.

Whoa.. I think someones next shot is over due.

I'm telling you how this will go.This will eventually spill over into overall prices. The price of beef and milk will skyrocket. There will be calls for the government to step in and regulate and control prices. It may even happen. We actually did see some under Nixon (and they failed miserably) You really are not far off from the USSR at that point.

 

[Death Bytes]

Slightly related to this discussion, especially about US auto companies and moving away from standard internal combustion engines. Saw an ad for the new line of Saturn hybrids, one of them is a V-12? Anyone have a good grasp on how much a V-12 hybrid is going to save on fuel? I would think that a V-12 hybrid would probably be about as fuel efficient as a standard 6 or 4 cyl. Am I way off here?Schlzm

I think you are making the assumption that the V12 has the same individual cylinder (combustion chamber) size as a V8. The total volume of the combustion chambers is what will determine the how much gas is used.This is why you see the "liter" rating on the engine. A 5.0 liter V8 uses more gas than a 4.2 liter V8. That hybrid has 12 small cylinders as opposed to 6 or 4 larger ones.

I understand the X.XL rating for each engine. However a 1.5L V-12 (18 total litres) will consume for fuel than a 2.0L V-8 (16 total litres) unless severe RPM governing and gear ratios are set in place. This is however why I asked for clarification about this newfangled V-12 hybrid, just curious about the hard data.Schlzm

I could be wrong as I'm no expert (nor did I stay at a Holiday Inn) on engine lingo but I thought the liter rating was for the entire engine. So 1.5L V-12 would use less gas then a 2.0 Liter V-8 (just plugging in numbers, a 2.0 V-8 would be a damn small V-8).Can anyone elaborate?

I'm pretty sure it's engine size and not cylinders. For instance if someone says "I have a 3 liter engine" you don't have to ask how many cylinders to know he has a 3 liter engine.