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Old 06-17-2022, 06:36 PM
 
15,439 posts, read 7,506,592 times
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Quote:
Originally Posted by b29510 View Post
i think this would be an economic question and not political, I honestly did not mean it to be. I guess supply and demand.


question: All this extra money we are paying for gas, whose pocket is getting all the extra, it got to be someone?


I myself, dont know
The extra cash is going into two sets of pockets right now. One pocket is the oil producers. That could be the folks producing oil here in the US, or some foreign producer.

The second pocket is the oil refiners, whose gross margin is called the crack spread, which is the difference between what they pay for oil and what they receive for the refined products. Their net profit will be the crack spread minus the cost of refining, which includes depreciation and other non-cash costs.
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Old 06-18-2022, 05:02 AM
 
Location: SE corner of the Ozark Redoubt
8,931 posts, read 4,660,970 times
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Quote:
Originally Posted by WRM20 View Post
The extra cash is going into two sets of pockets right now. One pocket is the oil producers. That could be the folks producing oil here in the US, or some foreign producer.

The second pocket is the oil refiners, whose gross margin is called the crack spread, which is the difference between what they pay for oil and what they receive for the refined products. Their net profit will be the crack spread minus the cost of refining, which includes depreciation and other non-cash costs.
Well, at least this post shows some knowledge of economics. Too many people (like sleepy Joe) whine about how much the refineries make, without consideration to the cost of building and running a refinery.
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Old 06-18-2022, 06:31 AM
 
Location: Central CT, sometimes FL and NH.
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Quote:
Originally Posted by TRex2 View Post
Well, at least this post shows some knowledge of economics. Too many people (like sleepy Joe) whine about how much the refineries make, without consideration to the cost of building and running a refinery.
The problem is that refineries need to be near ports where it can be easily distributed. Refineries are dirty, smelly, and known for causing ground, air, and water pollution along with other environmental damage. Since these distribution locations are also popular locations for other (cleaner) businesses, residences as well as farming nobody wants a refinery built anywhere near where they live. This is why the last new refinery in the US was built in 1976. We can whine and opine all we want but a new refinery will never be built in the US. The best case is to refurbish the ones already in existence which is problematic since many are superfund sites and taking any of the existing refineries offline for the required time to properly remediate and refurbish the facility further reduces the supply of refined products available in the US.

Other parts of the world, such as the Middle East, are more willing (or forced by authoritarian leadership) to accept the problems and pollution that go along with refineries and locate them in areas where the residents are poor and have little choice but to accept it.

There are no easy answers. The oil companies are making record profits after following record losses and in some cases nearly going bankrupt due to the incredible debt loads many oil companies carry to continue the exploration, production and distribution of their products. Most of the oil companies are also using their profits to invest heavily in wind, solar, hydrogen, hydroelectric, as well as EV technology and distribution. Biden is wrong vilifying the oil companies as they are in the best position to provide the gateway to the next technologies. One of the best strategies for reducing demand is to implement personal conservation. Far too many people drive pickups, large SUVs and other similar vehicles that are far beyond their actual needs. Yes, it's a personal choice but so are the consequences. If more oil is needed due to increased consumption and supply is constrained the price will go up. If one cannot afford the cost associated with it they need to evaluate alternatives. Electric Vehicles are not the only alternative.
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Old 06-18-2022, 06:50 AM
 
Location: Just transplanted to FL from the N GA mountains
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A oil/gas company makes approx 70 cents a gallon revenue. Notice I said revenue.... not profit. There is a big difference! Their actually profit margin is only about 8%. (Using Exxon as an example). Apple's profit margin is three times that. Getting the oil out of the ground, transported to the refinery, and processed to put it in the tank at the station isn't a cheap process. The fact is that the cost of a gallon of gas is based on FUTURE production, because the same business costs to the oil company still happen today that happened a year ago when gas was 2.00 a gallon. So ask yourself..... if nothing has changed today since yesterday with those costs....why is the future of oil/gas so bleak because that is what has caused the price to increase dramatically. It's there you'll find your answer............ And now we find the gas companies being asked to invest huge amounts of capital to increase supply and production, at the same time being told that those investments will be shut back down because the goal is to see their complete demise eventually. Think about that for a moment.... would you buy a new car if you'd been told you are going to lose your license by force in a couple of months?
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Old 06-18-2022, 10:25 AM
 
15,439 posts, read 7,506,592 times
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Quote:
Originally Posted by Lincolnian View Post
The problem is that refineries need to be near ports where it can be easily distributed. Refineries are dirty, smelly, and known for causing ground, air, and water pollution along with other environmental damage. Since these distribution locations are also popular locations for other (cleaner) businesses, residences as well as farming nobody wants a refinery built anywhere near where they live. This is why the last new refinery in the US was built in 1976. We can whine and opine all we want but a new refinery will never be built in the US. The best case is to refurbish the ones already in existence which is problematic since many are superfund sites and taking any of the existing refineries offline for the required time to properly remediate and refurbish the facility further reduces the supply of refined products available in the US.
Refineries do not need to be near ports, although that does help if they process imported oil, since the tankers can tie up at the refinery to offload.

Here's the Phillips 66 refinery in East Alton, Illinois. It's on a river, but not on a port. It gets all of its oil supply by pipeline https://www.google.com/maps/place/Ea...!4d-90.1112184

There are 2 refineries in Billings, Montana, about as far from a port as you can get https://www.google.com/maps/place/Bi...4d-108.5006904

Here's a refinery in Artesia, New Mexico https://www.google.com/maps/place/Ar...4d-104.4032962

Companies have been expanding refineries for a long time, usually without taking them offline, as the expansions are built next to existing units. A 500,00 barrel per day refinery doesn't have one 500,000 barrel unit, it probably has 4 or 5 100,000 barrel units. The 250,000 barrel per day expansion of ExxonMobil's Beaumont refinery has not required any shutdowns of existing units.
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Old 06-18-2022, 12:44 PM
 
Location: Central CT, sometimes FL and NH.
4,538 posts, read 6,805,852 times
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Quote:
Originally Posted by WRM20 View Post
Refineries do not need to be near ports, although that does help if they process imported oil, since the tankers can tie up at the refinery to offload.

Here's the Phillips 66 refinery in East Alton, Illinois. It's on a river, but not on a port. It gets all of its oil supply by pipeline https://www.google.com/maps/place/Ea...!4d-90.1112184

There are 2 refineries in Billings, Montana, about as far from a port as you can get https://www.google.com/maps/place/Bi...4d-108.5006904

Here's a refinery in Artesia, New Mexico https://www.google.com/maps/place/Ar...4d-104.4032962

Companies have been expanding refineries for a long time, usually without taking them offline, as the expansions are built next to existing units. A 500,00 barrel per day refinery doesn't have one 500,000 barrel unit, it probably has 4 or 5 100,000 barrel units. The 250,000 barrel per day expansion of ExxonMobil's Beaumont refinery has not required any shutdowns of existing units.
Thank you for pointing it my ports point. Although some are by ports, I meant to say distribution terminals need to be near water to load tankers in places like ports and rivers. Pipelines work too. However, my main point is that no new refineries have been built in new locations since 1976. Any new oil pipeline is going to face similar opposition. As independent as we want to be as a nation, when it comes to ramping up domestic refining, it is a challenge and we are dependent on foreign partners. The only way for our nation to reduce it's dependence is through a combination of conservation, substitution, and new energy technologies. Nuclear could play a key role if we could find a way to safely deal with the waste and ensure that the infrastructure is located in an area that is secure from both environmental dangers as well as from those wishing to do us harm. That is a hard sell to the American people resulting in a similar situation to the challenges with building new refineries and pipelines.

Here in the northeast the Northern Pass Project looked to bring electric power from Canada to provide much needed additional electric capacity to help satisfy the demand of a stressed electrical grid. The majority of the power is sourced from hydroelectric dams. The opposition was so strong and highly political that after many changes and attempted compromises it looks as if the project is finally dead. However, the demand is still there and growing. EVs, and the growing use of heat pumps and other electric heating systems need more electricity. The hydropower is clean energy and it reduces our dependency on fossil fuels for electric power. However, NIMBY activists and politicians looking to get elected work to kick the can down the road.

People are looking for a magical solution where the energy is available, relatively inexpensive, and they don't see the negative effects of the raw extraction, production, generation, or distribution in their backyard.
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Old 06-18-2022, 01:35 PM
 
15,439 posts, read 7,506,592 times
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Quote:
Originally Posted by Lincolnian View Post
Thank you for pointing it my ports point. Although some are by ports, I meant to say distribution terminals need to be near water to load tankers in places like ports and rivers. Pipelines work too. However, my main point is that no new refineries have been built in new locations since 1976. Any new oil pipeline is going to face similar opposition. As independent as we want to be as a nation, when it comes to ramping up domestic refining, it is a challenge and we are dependent on foreign partners. The only way for our nation to reduce it's dependence is through a combination of conservation, substitution, and new energy technologies. Nuclear could play a key role if we could find a way to safely deal with the waste and ensure that the infrastructure is located in an area that is secure from both environmental dangers as well as from those wishing to do us harm. That is a hard sell to the American people resulting in a similar situation to the challenges with building new refineries and pipelines.

Here in the northeast the Northern Pass Project looked to bring electric power from Canada to provide much needed additional electric capacity to help satisfy the demand of a stressed electrical grid. The majority of the power is sourced from hydroelectric dams. The opposition was so strong and highly political that after many changes and attempted compromises it looks as if the project is finally dead. However, the demand is still there and growing. EVs, and the growing use of heat pumps and other electric heating systems need more electricity. The hydropower is clean energy and it reduces our dependency on fossil fuels for electric power. However, NIMBY activists and politicians looking to get elected work to kick the can down the road.

People are looking for a magical solution where the energy is available, relatively inexpensive, and they don't see the negative effects of the raw extraction, production, generation, or distribution in their backyard.
My response to the opposition of people to projects like Northern Pass would be to shut off their power. If they don't want to have a means to get more power there, then they obviously don't want power at their house.

I've heard the same opposition from people who want Texas to stop approving expansion of power transmission from the giant wind farms in West Texas. Of course, they want gas and coal fired plants to expand instead, which makes no sense. I support using all forms of generation.

By the same thinking, I would cut off all hydrocarbon fuels shipments to areas that have sued oil companies for contributing to climate change. That means a chunk of the Northeast, the Bay area, etc, would not get to drive their cars, have truck deliveries or anything lese that consumes hydrocarbons.
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Old 06-18-2022, 02:29 PM
 
Location: Las Vegas & San Diego
6,913 posts, read 3,382,615 times
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Quote:
Originally Posted by beach43ofus View Post
The extra is mostly going to oil company stock shareholders.
No, most of the extra are going to recoup the massive losses from 2019 and taxes. The price of oil stocks are almost back to about what they were 4 or 5 years ago.

For example, XON (Exxon Mobile) was at $89 in Jan 2018, it is at $86 now, so in the last 4 years it hasn't even broken even, let alone kept up with inflation or returned a profit for an investor. XON made $23.0 B in 2021, which essentially offset the $22.4 B loss in 2020 - they also paid $9.65 B in taxes over the last year - no one is getting rich on oil stocks currently.
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Old 06-19-2022, 08:30 AM
 
7,839 posts, read 3,836,363 times
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Originally Posted by Sand&Salt View Post
We think about and do it. We are giving all our service people unasked for raises for just this reason.
How is inflation down in your neck of the woods?
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Old 06-23-2022, 07:04 PM
 
1,873 posts, read 847,550 times
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Quote:
Originally Posted by Lincolnian View Post
my main point is that no new refineries have been built in new locations since 1976. .

I have built four since 1990


Mobil oil
Exxon
yellowhammer
and many upgrades and expansion to existing, and those are just in my area. I bet texas and louisana has built hundreds of them
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