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Where do you get this nonsense that there is "excess" refining capacity in the U.S.
All this information is available on the website of the Energy Information Administration website. Which is, I'm pretty sure, run by the US Dept. Of Energy.
See, digging this stuff up and applying a little bit of math to it is a tiny bit more difficult than listening to pundits. However, it's also a heck of a lot more accurate.
As to the importation of refined gasonline; you're probably correct on the fact that we are. However without researching it I'd have to say that it's likely caused by economics, not lack of (overall) refining capacity. I'm pretty sure Canada has excess refining capacity in Alberta (the Houston of Canada) whle the US has little capacity in that part of the country.
If it's cheaper to import finished product instead of raw material, economic laws dictate that it will be done. (See Adam Smith "The Wealth of Nations", particularly the part on "comparitive advantage".
OP has a point. A barrell of oil is like a share of stock, futures are sold on the stock exchange. It's not demand for oil in this case, it's demand for the future price of oil, or demand in that share of stock that says you are buying a barrell of oil today and selling it in the future when it is delivered. Oil futures are like IBM stock in the 80's, everyone seems to be investing. Who is investing? Probably you are, your mutual funds, retirement funds, etc. The more they want to buy this future, the higher the price goes.
This is but one of the issues driving up the price of oil, not the total issue, but a big piece.
All this information is available on the website of the Energy Information Administration website. Which is, I'm pretty sure, run by the US Dept. Of Energy.
See, digging this stuff up and applying a little bit of math to it is a tiny bit more difficult than listening to pundits. However, it's also a heck of a lot more accurate.
Where on the Energy Information Administration website does it say "we have excess refining capacity" ?
EDIT: OK, I just found capacity utilization figures on this EIA webpage. Here's what "applying a little math" reveals: Over the last 20 years, refineries have been operating at an average of over 90% capacity. Over the last year, they have been operating at an average of 88% capacity. So where on earth is all this "excess capacity" you're talking about?
According to the Energy Information Administration, in 1995 the United States burned 17 million gallons more a day than it produced. By 2005, the United States was burning 36 million gallons of gasoline a day more than it produced. The shortfall was then, and continues now, to be made up my importing gasoline, primarily from Western Europe.
Refiners in the United States have squeezed out about as much capacity as they can from their existing facilities. Even if they ran full out at 100% everyday, it is still not enough to meet the gasoline needs of our country. So it is not a matter of economics (cheaper to import finished product), it is a matter of necessity to meet demand for the product, because we can't do it ourselves.
Unless and until currently operating refineries are expanded further, new ones are built, or the overall demand for gasoline drops dramatically, the situation is not going to change.
I know there are NO oil shortages... I have said this COUNTLESS times before, there are NO supply problems...
Speculation is NOT the problem either because they do NOT control prices, oil PRODUCERS control the prices and they USE data to tell them how to price it... if data says to sell it at rip-off prices, that's what they will do... speculators don't "force" them to set their own prices... THEY do it on their own...
Oil producers have been using "oil supply and demand" and "speculation" as SCAPEGOATS... these things are all scapegoats for their own greed... Oil producers are the oil nations and unless you threaten war on them like we did back then, you won't see crap... unfortunately Bush is their best friend and so he won't do anything, he "owes" them his family fortune... It is the reason we went to the Iraq war and the reason we threaten Venezuela... we like their oil and Bush wants to give it to his "family friends"...
In 1981 there were 351 refineries in the United States. By 2005 there were only 149. It is true that existing refineries have been expanded to increase product output. In fact, since 2005, refinery capacity utilization rates have been running between 92% to as much as 96%. However, even at these rates, demand is such that 10% of the gasoline sold in the United States is imported. Doesn't exactly sound like there is "excess capacity" to me.
Another factor to consider is what are commonly referred to as "boutique fuels". These are special blends of gasoline that are required by either local, state, or federal law to meet environmental regulations in selected areas. If there is a problem at the refinery which produces the special gasoline needed for say, Los Angeles, the gasoline dispensed in Florida can't be substituted to make up the disruption. End result, prices spike in Los Angeles until the problem is fixed or an alternate source of the needed gasoline is found. This means either importing gasoline that meets the environmental requirements from Western Europe, or production of gasoline for another region has to be taken offline to fill the needs of Los Angeles. Depending on demand in that region, taking it offline could then lead to more price spikes and more shortages. As you can well see, running current refineries at nearly 100% capacity is a recipe for disaster.
Refining capacity does need to be increased and environmental concerns are indeed one aspect of why new refineries are not being built. But the main culprit is simple economics. Increasing capacity will increase supply. Increased supply decreases product prices. Lower product prices mean lower profitability of the operation. Starting in 1989 and continuing into the late 1990's, oil refiners faced a similar situation; too much capacity leading to low profits. As they do not wish to repeat that bit of history, they are content to leave refining capacity levels exactly where they are.
Consider that whether expanding a current facility or building a new one, it takes anywhere from 3 to 5 years for it to come online. It might even take longer if it is held up by lawsuits or challenges from environmental groups. Since it is known that crude oil production worldwide is decreasing and the drive to switch to non-crude based fuels in increasing, it doesn't make good business sense to invest millions of dollars in something that may never offer them a return on their investment.
You can call it greed, or you can call it good business, but don't expect an increase in refining capacity or decrease in prices in the near future.
Certainly expect a increase in refinery capacity in the future. There are like 30 billion in capcaity increases on the gulf coast alone. In my area many of the refineries will be doubling capacity in the next 5-10 years and the construction is really crazy now. The pipelie from canada to teh gulf coast of Texas is about to be doubled in capacity.The governamnt is sitting still but the refiners are going full speed ahead. There has been no construction projects like this in refining since WWII.
I know there are NO oil shortages... I have said this COUNTLESS times before, there are NO supply problems...
Speculation is NOT the problem either because they do NOT control prices, oil PRODUCERS control the prices and they USE data to tell them how to price it... if data says to sell it at rip-off prices, that's what they will do... speculators don't "force" them to set their own prices... THEY do it on their own...
Oil producers have been using "oil supply and demand" and "speculation" as SCAPEGOATS... these things are all scapegoats for their own greed... Oil producers are the oil nations and unless you threaten war on them like we did back then, you won't see crap... unfortunately Bush is their best friend and so he won't do anything, he "owes" them his family fortune... It is the reason we went to the Iraq war and the reason we threaten Venezuela... we like their oil and Bush wants to give it to his "family friends"...
Other people say it's Gore and Clinton and the eco-nuts fault(s). Frankly however, it's hard to take people with obvious political axes to grind seriously unless you are just salivating over any chance to justify why your straight ticket voting mindset is *correct* and the other side is just *evil*.
So basically you requesting military action to force independent countries to supply us goods at below the rate set by the global markets....and yet somehow I'm guessing you think the Iraq war was a mistake.
Take it to political or put up some numbers showing how the exchange rate hasn't tanked and how global demand hasn't doubled in ten years etc. while supply has remained stable. Just making stuff up doesn't cut it unless you are Rush.
speculation is #1 i think but then when prices are high no one buys and then they raise it even higher to make the money back and then less people buy so they raise it higher and so on i think anyways lol they should put some rules into place about speculation so if some stupid terrorist threatens to mess with oil it dont jump 10 cents a gallon and also the democrats blocking drilling i think it started getting bad with clinton. i heard something about iraqi citizens paying a dollar a gallon at filling stations while american soldiers were paying 3 or 4 a gallon to fill up humvees.
speculation is #1 i think but then when prices are high no one buys and then they raise it even higher to make the money back and then less people buy so they raise it higher and so on i think anyways lol they should put some rules into place about speculation so if some stupid terrorist threatens to mess with oil it dont jump 10 cents a gallon and also the democrats blocking drilling i think it started getting bad with clinton. i heard something about iraqi citizens paying a dollar a gallon at filling stations while american soldiers were paying 3 or 4 a gallon to fill up humvees.
Actually, I heard american soldiers are charged 8 dollars a gallon by Halliburton which Clinton actually owns 3% of now. Iraqi citizens don't actually use gas, that is a myth because the Koran clearly points out that the internal combustion engine is forbidden. Yeah, you are totally right about just charging more when people stop buying your product. When I was 11 I had a lemonade stand and I only sold one glass all summer but I got $932 for it.
I cannot BELIEVE that Congress said the runup was due to supply and demand and not speculation. What a bunch of crooks.
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