News on the oil front

[Northern Maine Land Man]

The dealer contracts for a forecast need from a distributer. He's covered. Refiners have long term contracts for delivery of crude at $30 or $40 a barrel. These go for years into the future. We have thousands of wells in our country capped off that could be used. About 1,600 capped wells are in West Virginia alone. Wells recover. When yield from a well slows down the oil company moves to another well. The capped well slowly recharges and will be productive again.

If some refinery needs extra oil they buy it on the open market. Those prices are above $130 a barrel today. Don't make the mistake of thinking all oil is traded at $130 a barrel. Remember the base prices that are delivered every day to refineries. Then think about that as you pull up to the pump.

My own contract is for a specific number of gallons. If I go over that amount it becomes the cash price on the day of delivery. If I put in a pellet stove or something and cut my oil usage in half I pay the dealer $.50 for every gallon I didn't use.

[maine4.us]

Thanks, I was guessing that you would have a maximum number of gallons to be used, paying for the oil you don't use seems reasonable since you have contracted for a max of X number of gallons. I know the school districts contract for diesel fuel with a cap on price, because they bid it from July 1-June 30 each year. Thanks again for the answer.

[Coaster]

Originally Posted by Northern Maine Land Man

The dealer contracts for a forecast need from a distributer. He's covered. Refiners have long term contracts for delivery of crude at $30 or $40 a barrel. These go for years into the future. We have thousands of wells in our country capped off that could be used. About 1,600 capped wells are in West Virginia alone. Wells recover. When yield from a well slows down the oil company moves to another well. The capped well slowly recharges and will be productive again.

If some refinery needs extra oil they buy it on the open market. Those prices are above $130 a barrel today. Don't make the mistake of thinking all oil is traded at $130 a barrel. Remember the base prices that are delivered every day to refineries. Then think about that as you pull up to the pump.

NMLM, you've written this several times, but try as I might I can't find any confirmation of it out in the wide world. The futures traders I've asked about this laugh and say, "I wish. Those contracts are long gone, traded at enormous profit back when oil broke $60 and $80, and there weren't that many of them to begin with." Their explanation is that refineries and other large users (railroads and airlines, for example) don't buy that far out -- usually no more than 12-16 months -- to avoid getting caught if spot prices drop below the contract price. That's one reason airlines are suffering so badly now. They didn't plan on $130 oil.

Anyway, if you have some information on those super-cheap contracts, could you forward it to me? PM if you like. It bears on a project I'm working on.

[sayoyuka]

Hello,

My name is Yoko. I am living in Potland Area in Maine. I used to live in Bangor for 10 years. So I am very familiar to Brewer area. Welcom to Maine two of you!!

I have just found this site and wanted talk about heating oil. ...I just bought 100 galon of oil for $425 today... well, winter is not started yet.. I don't know exactly what is people's average of heating oil consumption/year, I wonder my heating system is something wrong to burn 150 galon since after April... I have 2 bedrooms, a small livingroom and tiny basment room apartment sharing with total of three adults and 1 child.

My tank is 250 gallons, and it lasted for 4 month during winter season.

I put another 100 gallons at the end of March, and another 50 gallons 2 month ago...

We completely shut heating off in May and oil is only used for hot water since then.

Am I doing ok?

[mainebrokerman]

if the u.s. will get our head out of our butt and use our own resources (in anwar and offshore, and nuclear power) we wouldnt have to depend on the rest of the world ..for our energy and economy.

[dramamama6685]

Originally Posted by mainebrokerman

if the u.s. will get our head out of our butt and use our own resources (in anwar and offshore, and nuclear power) we wouldnt have to depend on the rest of the world ..for our energy and economy.

Well said!

[Coaster]

Originally Posted by mainebrokerman

if the u.s. will get our head out of our butt and use our own resources (in anwar and offshore, and nuclear power) we wouldnt have to depend on the rest of the world ..for our energy and economy.

The US currently burns 19.77 million barrels of oil a day, while domestic crude oil production this year is expected to be about 5.14 million barrels a day. We're importing 13.44 million barrels a day (the difference is ethanol and NGL). We could drill everywhere and build dozens of nukes and still be importing oil from OPEC nations. And unfortunately the drilling and the nukes take time -- five to ten years minimum once construction starts. They can't help us now or in the near future. Perhaps down the road ... always assuming we don't run into Mad Max walking toward us.

[Maineah]

Originally Posted by mainebrokerman

if the u.s. will get our head out of our butt and use our own resources (in anwar and offshore, and nuclear power) we wouldnt have to depend on the rest of the world ..for our energy and economy.

This is the result of pandering to envrionmentalists and NIMBY's for the last 30 years. We have a highway which divides family land in two at the end of the street . When they built that highway in the early seventies do you think they listened to the gripe of the people they took the land from??? No ..it was progress and an individual has no right to stop improvement of any land for the betterment of the masses. The family was compensated for their loss and it is now a non issue. If someone wants to build a nuclear power plant in my back yard I may not like it but I have the option to stick it out or go elsewhere!

[quiet walker]

Originally Posted by mainebrokerman

if the u.s. will get our head out of our butt and use our own resources (in anwar and offshore, and nuclear power) we wouldnt have to depend on the rest of the world ..for our energy and economy.

I live the Washington DC region and am used to the blanketing of advertisements across the media here supporting this or that national cause, aimed at Congress but heard by all. Like Boeing Aircraft did successfully after a month - the Pentagon will reopen the bidding on the new refueling air tanker. Previously the contract had been awarded by the Air Force to Europe's Airbus Industries by a flawed process that was investigated and judged unfair. Boeing prevailed in its campaign and the Pentagon will handle the new bidding very notably excluding the Air Force which they judged incompetant in this process... OUCH!!

But now the newspapers and radio here are full of ads by the oil industry howling for more drilling rights leases under various guises. First there was one that featured a 70's-esque guy saying "It didn't (conservation and tax policy) work then and it won't work now." Then there was the one with a kindly old grandfather voice who tried to correct people's errant ideas of who owns the oil companies. "It's not big evil corporations but actually teachers, firefighters, and kindly old pensioners like me." Bleh! Now they have one saying it is "The People" who want more drilling anywhere and everywhere - outraged "people" on the radio and full page newspaper ads signed "THE PEOPLE ........... (of the oil producing industry - in little tiny letters)."

"Methinks they protest too much" What the heck is going on here? Why all this sound and fury? The guy in the white house has been on single message the past few weeks repeating over and over that the energy problem is solely the fault of "the democrats" who prohibit oil drilling anywhere and everywhere. While he forgets that he blocked oil drilling off of Florida while his republican brother who was the governor objected to drilling there. Isn't Bush the Younger a part of the oil industry? And by the way, does anybody take seriously or believe anything he says anymore?

We've had all the recent scandals on Wall Street that rocked the world economy (still going on - Fanny May and Freddie Mac up next and going under). Does anyone remember Enron when they gamed the electricity markets, withheld power to manipulate prices, and nearly drove California into bankrupcy? The oil industry already owns unprecidented millions of acres of drilling rights which they are not using. When asked if they would give them up in return for the anwar and offshore rights they are howling for - they refuse. Why? What's going on? Why is their boy Bush single issue campaigning for them, before he leaves his disasterous presidency for someone else to clean up?

The Democratic Party today on their weekly radio response to Bush called for releasing oil from the strategic reserve. Yea, that will solve our addiction to oil, until shortly when it runs out.

Well as part of the Washington DC advocacy advertising campaigns there is a new one in the past few days by legendary oil man T. Boone Pickens... I welcome his contributions to the discussion. I wonder if those "outside the beltway" get to participate in some of these public forums. And especially in places like Maine where energy has such a strong impact on American citizens' lives. Look here at Picken's web site...

PickensPlan

And if a beligerant bigoted gun nut who lives in his own reality, threatens his neighbors and others who don't agree with him spews insults - be my guest. I just consider the source - no problem.

[Cornerguy1]

Moderator Note:

Please keep in mind that this a state forum board. Discussions about local oil prices are fine, but debates on national policy need to be taken up in the General US or Politics forums.