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5 dollar gas...are we ready?

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Re: 5 dollar gas...are we ready?

Patman said:
which would imply that the market has a capacity for more refineries, yes?
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Try running that one through the regulatory maze. There's a reason (actually more than one, but this is a big one) nobody has built refineries in the United States for a long time, even if there is a need for it.
 
Re: 5 dollar gas...are we ready?

Kepler said:
Does it surprise anybody -- even the people who whack themselves off to Milton Friedman -- that when five companies control a scarce resource you get a criminal cartel?
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Which resource, oil or gas? Oil, I buy, but there are more than five companies involved in refining. In particular, Valero and Marathon Ashland have a significant market presence in at least some parts of the country.
 
Re: 5 dollar gas...are we ready?

unofan said:
Do you have 9 figures worth of money sitting around waiting to build a new refinery?

There is this thing in economics called a "barrier to entry" which would seem to apply here.
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More likely, the same thing will happen as has been happening in the time since the last new refinery was built: the existing refineries will debottleneck and build new units to up their capacity and get a bigger piece of the action. I'm not sure what the lead time on this sort of thing is; bear in mind that about 18 months ago, the crack spread was in the ****ter and the refiners were all losing money and canceling projects.
 
Re: 5 dollar gas...are we ready?

Bob Gray said:
Try running that one through the regulatory maze. There's a reason (actually more than one, but this is a big one) nobody has built refineries in the United States for a long time, even if there is a need for it.
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Another failure of US Energy Policy. There's something rotten about what our Government is doing in this area. All this traction for "green" crap while not fixing or paying attention to the oil infrastructure, drilling, oversight, regulation, etc. is complete and utter BS.
 
Re: 5 dollar gas...are we ready?

I liked the idea that was floated a few years ago about using closed military bases to build new refineries. Of course, you'd have to get congress and the EPA to allow one to be built in the first place.
 
Re: 5 dollar gas...are we ready?

Craig P. said:
Which resource, oil or gas? Oil, I buy, but there are more than five companies involved in refining. In particular, Valero and Marathon Ashland have a significant market presence in at least some parts of the country.
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Specifically I meant oil.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." -- Adam Smith
 
Re: 5 dollar gas...are we ready?

MinnFan said:
I liked the idea that was floated a few years ago about using closed military bases to build new refineries. Of course, you'd have to get congress and the EPA to allow one to be built in the first place.
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What, Plattsburgh and Rome getting some actual industry?! ;)

You would have to consider the location of these bases, because with some of them, you'd end up having a double delivery cost.
 
Re: 5 dollar gas...are we ready?

Bob Gray said:
Try running that one through the regulatory maze. There's a reason (actually more than one, but this is a big one) nobody has built refineries in the United States for a long time, even if there is a need for it.
Click to expand...

It's like talking to a wall. go look up the refining capacity, utilization #.
You had a major capacity increase. NEW refiner was built in the south in the 2008-2010 period hence EIA has no capacity concern for next 30 years. since our demand for liquid fuel has decreased from 2005 peak while capacity has increased.

These refiners are actually shutting down capacity since demand is so low. EIA guy almost admitted refining profit margins went up (To RECORD levels) then he back tracked about how supply was constrained because of unscheduled refining shutdowns. blah blah blah it's supply plus high oil prices. instead of just saying that the gasoline prices are high because refiners are jacking up the price.

Margins will come down from 2004-2007 record levels by the end of the decade as significantly more capacity additions will occur in 2008-2010 when compared with 2000-2006,"
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Re: 5 dollar gas...are we ready?

Tundra said:
It's like talking to a wall. go look up the refining capacity, utilization #.
You had a major capacity increase. NEW refiner was built in the south in the 2008-2010 period hence EIA has no capacity concern for next 30 years. since our demand for liquid fuel has decreased from 2005 peak while capacity has increased.

These refiners are actually shutting down capacity since demand is so low. EIA guy almost admitted refining profit margins went up (To RECORD levels) then he back tracked about how supply was constrained because of unscheduled refining shutdowns. blah blah blah it's supply plus high oil prices. instead of just saying that the gasoline prices are high because refiners are jacking up the price.
Click to expand...

Same spin with the EA producers. While they contend that they reduce demand for OPEC oil imports, the fact is that EA is tied to oil demand since they blend. A fall in demand such as the one we saw in 2008 also meant a fall in demand for EA. Actually to this day, EAs production capability is much higher than it needs to be which is why they continue to suck up subsidies, and are trying to pass the E15 mandate. Basically it’s a agri bailout.

Per a conversation with friends ( so take it with a grain of salt) - mexico is planning on ramping EA production by incentivizing the **** out of it. As a result, agave farms will be gone. That means no more tequila for all you Tequila lovers out there… ( I hate the stuff so I digress).

Good stuff from everyone. Learning something new every day.
 
Re: 5 dollar gas...are we ready?

There's a pipeline from Searsport to Loring.

Irving and BP were supposed to build a huge refinery in NB but they decided not to, I wonder why? :rolleyes:
 
Re: 5 dollar gas...are we ready?

Syracuse is still the 2nd cheapest spot in the state, only to the Seneca reservations. A little above the national average, but not too bad considering New York.
 
Re: 5 dollar gas...are we ready?

Dropped here in the far west Chicagoland suburbs to $4.19. Just in time for it to jump back up for next weekend. ;)
 
Re: 5 dollar gas...are we ready?

$3.99 and dropping out here. According to Gas Buddy, almost everybody's near or under $4 except NY, CT, IL, and CA -- I assume prices correlate so highly with state borders because of taxes.
 
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Re: 5 dollar gas...are we ready?

Kepler said:
$3.99 and dropping out here. According to Gas Buddy, almost everybody's near or under $4 except NY, CT, IL, and CA -- I assume prices correlate so highly with state borders because of taxes.
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Exactly; NY's the 2nd highest, just barely losing out to CA. However, there are other factors as well. Competition with state borders, native reservations, demand from Canada...
 
Re: 5 dollar gas...are we ready?

Holding steady at $4.19 here in ANC. Highest I saw this past month was $4.24.

There are a couple stations that jumped down to $4.14, but no one seems to have followed suit.

The song and dance up here seems to go like this: the stations will sit at $4.11 for like a week. Then, suddenly one day they will drop to $4.10. THIS IS YOUR WARNING. Expect a 7-8 cent jump the day after that.
 
Re: 5 dollar gas...are we ready?

Down about 25 cents in the last two days around here. Paid $4.05 on Tuesday, same station was at $3.79 this morning. :mad:
 
Re: 5 dollar gas...are we ready?

Will be driving up I-95 later this AM for sonny boy's graduation (summa cum laude 3.94). Will let you know how the drive goes.
 
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