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With a new oil boom taking place in North Dakota , the Gulf of Mexico and other places and the production ramping up should the government require all the oil produced here not be exported?
What would be the downside of banning the U.S. oil producers from exporting oil?
No because it might cost less to transport the oil to or from various places. Gulf of Mexico oil may be less expensive to ship to Europe. North Dakota oil has nowhere to go but here. Imported oil might be cheaper in some markets than domestically produced oil. What happens if we become a net exporter? Production would have to be cut. So the disadvantages are possibly higher prices and less production, fewer jobs. We need all the jobs we can get right now.
I wouldn't want the import OR export of natural resources to be restricted. I don't like governmental restrictions on commerce and trade to begin with. There are always lots of unintended bad consequences to governmental involvement. We have too much such involvement already.
With a new oil boom taking place in North Dakota , the Gulf of Mexico and other places and the production ramping up should the government require all the oil produced here not be exported? What would be the downside of banning the U.S. oil producers from exporting oil?
(Sigh), which oil are you talking about? Heavy sour, heavy sweet, intermediate sweet, intermediate sour, light sour, very light sour?
So, what would happen? You'd have an economic depression.
I guess it never donned on you that oil comes in "regular" and "diet" and a lot of different flavors.
EPA Tier 2 says gasoline cannot contain more than 30 ppm in Sulfur. Do you have any idea how much it costs to reduce sulfur? It costs a lot of money. A lot of money. More money than you can afford.
That's why you export gasoline and diesel.
You export gasoline and diesel, because you aren't willing to pay $5 - $6/gallon (or more) for high sulfur oil to be refined into gasoline meeting EPA Tier 2.
What do you think will happen when EPA Tier 3 regulations requiring 10 ppm go into effect? Will gasoline cost more or less?
It will cost more.
You just can't talk to the sulfur until it becomes depressed and commits suicide. You have to use a chemical process, and it is very, very expensive.
Also, you do not have the refinery capacity for heavy oil, so you must either build new refineries which you cannot afford, or you must refit existing refineries, and that will reduce the Supply of Gasoline, since heavy oil produces less gasoline than light oil or intermediate oil. That will cause a shortage of gasoline, and the price will rise.
(Sigh), which oil are you talking about? Heavy sour, heavy sweet, intermediate sweet, intermediate sour, light sour, very light sour?
So, what would happen? You'd have an economic depression.
I guess it never donned on you that oil comes in "regular" and "diet" and a lot of different flavors.
EPA Tier 2 says gasoline cannot contain more than 30 ppm in Sulfur. Do you have any idea how much it costs to reduce sulfur? It costs a lot of money. A lot of money. More money than you can afford.
That's why you export gasoline and diesel.
You export gasoline and diesel, because you aren't willing to pay $5 - $6/gallon (or more) for high sulfur oil to be refined into gasoline meeting EPA Tier 2.
What do you think will happen when EPA Tier 3 regulations requiring 10 ppm go into effect? Will gasoline cost more or less?
It will cost more.
You just can't talk to the sulfur until it becomes depressed and commits suicide. You have to use a chemical process, and it is very, very expensive.
Also, you do not have the refinery capacity for heavy oil, so you must either build new refineries which you cannot afford, or you must refit existing refineries, and that will reduce the Supply of Gasoline, since heavy oil produces less gasoline than light oil or intermediate oil. That will cause a shortage of gasoline, and the price will rise.
Petro-chemically and economically...
Mircea
Funny how people seem to think oil comes out of the ground and directly into their home heating tanks or through some simple and easy 'filter' to become gasoline, etc.
Yes, and all movies produced here ought to be screened here, and all music produced here ought to be sold here, and all cigarettes produced here ought to be sold here, and all wheat grown here ought to be eaten here. and all pharmaceuticals developed here ought to be prescribed here. Ban the producers and creators and marketers of all those things from exporting them.
EPA Tier 2 says gasoline cannot contain more than 30 ppm in Sulfur. Do you have any idea how much it costs to reduce sulfur? It costs a lot of money. A lot of money. More money than you can afford.
That's why you export gasoline and diesel.
You export gasoline and diesel, because you aren't willing to pay $5 - $6/gallon (or more) for high sulfur oil to be refined into gasoline meeting EPA Tier 2.
I think his point here is you export the crap too difficult to refine to other countries that do not have such stringent EPA requirements and import the stuff that's easier (and cheaper) to refine. There's a premium price on low sulfur oil (light crude oil), so the high sulfur oil is cheaper and that's why other countries buy it. Actually I believe we refine a lot of the oil for them. It's easier to move refined gasoline or diesel thru pipelines then it is to move oil, but you'll never see a drop of the high sulfur refined fuel ever reaching your local fueling station. The fuel is piped to ports to be loaded onto ships and transported to buyers over seas.
I guess if it was a level playing field where all fuels had to meet a minimum international standard, the market would be far different.
Last edited by TechGromit; 07-12-2012 at 06:39 AM..
Yes, and all movies produced here ought to be screened here, and all music produced here ought to be sold here, and all cigarettes produced here ought to be sold here, and all wheat grown here ought to be eaten here. and all pharmaceuticals developed here ought to be prescribed here. Ban the producers and creators and marketers of all those things from exporting them.
Why Not....and all the other countries should do the same
One big problem with mandating that oil produced here be refined and sold here, EPA regulations notwithstanding - if the market price at any time drops below the cost of getting it out of the ground here, then production drops to zero. Ask Jimmy Carter how well price controls and gasoline rationing worked. (Hint: it didn't.)
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