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Melonie
08-25-2005, 02:45 PM
hooboy, I should stop speculating about 'worst case' scenarios ...



"
Venezuelan Energy Minister Goes to China Amid Spat with U.S.
EFE Wednesday, August 24, 2005


Beijing, Aug 24 (EFE).- Venezuela's oil minister was on an official visit to the Chinese capital Wednesday amid an escalation of animosity between Caracas and Washington that included a warning from the major South American oil supplier that it might cut off the flow of its crude to the United States.

Energy Minister Rafael Ramirez's arrival in the Chinese capital was confirmed by Venezuelan diplomats, who refused to comment on the
trip.

Ramirez said he would not meet with reporters during his stay in Beijing.

"We're ready to cut off the supply and determined to defend our rights," Ramirez said last week, referring to sales of crude to its top customer and political antagonist, the United States.

"The U.S. market is not indispensable for us," President Hugo Chavez said at the time, a statement seconded by Ramirez, who said Venezuela had other customers for its oil in the world, among them China. (snip)"

Bridgette
08-25-2005, 04:36 PM
I paid $2.61 this morning. Down the road it was $2.63. BLEH!!!

sexystephani
08-25-2005, 08:41 PM
Damn gas is $2.89 here I wish I had a hybrid!

FBR
08-25-2005, 08:45 PM
I paid $2.65 a gallon yesterday for premium. What a deal :O

Oil companies :finger:

FBR

BeautifulDreamer
08-25-2005, 08:48 PM
MISSION
ACCOMPLISHED!

GnBeret
08-26-2005, 02:35 AM
I paid $2.65 a gallon yesterday for premium. What a deal :O

Oil companies :finger:

FBR

Aja... and did you happen to grab a bottle of water too while you were there?

Think about it: ExxonMobil, et al., go halfway around the globe into some of the most difficult places in the World to do business, find the fields, drill anywhere from 12,000' - 30,000' down to produce the crude, build a transport system to get it to a port, load it on a $500M tanker, ship it across a couple of oceans to get it here, run it through a $5-$7B refinery, transport it to your neighborhood convenience store, and sell it to you for less than $2.00/gallon (the rest is taxes).

In contrast. your local bottler drills a 4,000' well right here in the U.S., produces water which requires virtually no treatment and/or processing whatsoever. bottles it, and delivers it to that same convenience store for $1.00 - $1.50 / bottle, or anywhere from $3.00 - $6.00 / gallon (and that's without any taxes!). Same thing re a gallon of damned near anything else you can think of....

And, to top it all off, ExxonMobil's capital investment, i.e., amount at risk, is several hundred Billion at all times... what's Aquafina's sunk cost? 1% of that?

So, who's f****** who, here, and who's running their business efficiently?

FBR
08-26-2005, 06:25 PM
So, who's f****** who, here, and who's running their business efficiently?

I agree with what youre saying, GnB, in principle at least. But, buying bottled water is an optional purchase while gas for the buggy is a necessity.

I feel were getting fucked somehow but for the most part Im just generally bitching. If I was that worried about it I would have bought a sub-compact gas sipper or Japanese hybrid instead of the EXT.

FBR

Bob_Loblaw
08-26-2005, 07:47 PM
http://www.milkandcookies.com/links/34868/

GnBeret
08-26-2005, 09:08 PM
BTW FBR, to extent we're getting f***** (and I agree, we are), sad fact is we've been f***** a lot harder than this before. And, once economy absorbs the "hit" and adjusts to new pricing structure, we WILL reap certain collateral benefits from wholesale "shift" in floor prices - for example, when it became clear that the new "floor price" for oil was going to at least be in the $30/bbl+ range, Canada's proven reserves were revised such that it now has the 2nd or 3rd highest amount of proven reserves in the World - 'cause at that price, is finally economical to produce. Will put us in a much better position vis-a-vis OPEC to resist "swings" and gouging in future once we've settled down into new price range.

http://news.yahoo.com/news?tmpl=story&cid=509&ncid=509&e=6&u=/ap/20050826/ap_on_bi_ge/oil_prices_101

"On an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago."

FBR
08-26-2005, 09:37 PM
BTW FBR, to extent we're getting f***** (and I agree, we are), sad fact is we've been f***** a lot harder than this before. And, once economy absorbs the "hit" and adjusts to new pricing structure, we WILL reap certain collateral benefits from wholesale "shift" in floor prices - for example, when it became clear that the new "floor price" for oil was going to at least be in the $30/bbl+ range, Canada's proven reserves were revised such that it now has the 2nd or 3rd highest amount of proven reserves in the World - 'cause at that price, is finally economical to produce. Will put us in a much better position vis-a-vis OPEC to resist "swings" and gouging in future once we've settled down into new price range.

http://news.yahoo.com/news?tmpl=story&cid=509&ncid=509&e=6&u=/ap/20050826/ap_on_bi_ge/oil_prices_101

"On an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago."

GnB, Im a capitalist and totally understand the profit motive. But I dont like to get it up the butt :O Id rather be the "butt-er" rather than the "butt-ee" ;)

My business depends upon tons of different variables none of which approach the monopoly status that the oil companies enjoy by default. So once again...fuck em :finger:

FBR

kittykat1971
08-26-2005, 09:54 PM
I just paid $2.69 for REGULAR unleaded. And thanks to the goverment, a few years ago I bought a large SUV as a tax write off for my business, so now it costs about $60 to fill up (I was not planning on buying a vehicle that large but couldn't pass up the tax break). Sometimes I think the Bush cabinet is smarter than we give them credit for...not that hard to do...

Melonie
08-27-2005, 01:44 AM
And thanks to the goverment, a few years ago I bought a large SUV as a tax write off for my business, so now it costs about $60 to fill up (I was not planning on buying a vehicle that large but couldn't pass up the tax break).

The actual motivation for the 6000lb 'business' vehicle tax break was to assist small businesses in purchasing delivery trucks, service vans etc. - in other words new business vehicles which would mean new jobs as well. The 'loophole' which allowed large SUV's to also qualify for the tax break (without creating new jobs) was discovered by smart accountants after the fact, and became virtually impossible to 'close' after it had been in effect for the first year with a commeasurate increase in sales of exclusively (at the time) American made large SUV's. Some argue that this unintended 'loophole' singlehandedly kept Detroit automakers afloat, by channeling our tax money, through your large SUV purchase, to the hands of unionized Detroit autoworkers !

Now that Japanese and European automakers have spent the R&D money to develop 6000lb SUV's which also qualify for the tax deduction, and which can now directly compete with Detroit 'iron', it's a perfect time to pull the rug out from under the entire product segment. Every time I see Subaru promoting their brand new B9 Tribeca I have to snigger, because their $100 mil in R&D money and 2-3 years of R&D work is going to turn into extremely disappointing sales figures at $3.00 per gallon gas prices.


Sometimes I think the Bush cabinet is smarter than we give them credit for

Not to get too political in dollar den, but there's 'dumb like a fox' as well as 'dumb like a stump' - although I'm not sure which actually applies in this case.

FBR
08-31-2005, 07:44 PM
$2.40 sounds cheap now. In my area the price exploded pretty much overnight. I drove by a Speedway on the way home today and it ws $3.09 for regular. A couple of days ago it was $2.49. We are getting it up the butt without lubrication.

My youngest son has a brand new, small but nice AMERICAN MADE car ;) that I bought him. Unfortunately, he wont be able to drive for several months due to a personal injury. I'm thinking about parking the Escalade and using his vehicle for around town stuff. On road trips or visits to the Club I will fire up the ESC.

FBR

PS: The ;) was for Melonie so she doesnt think that Im drifting into Poo territory LOL

Melonie
09-01-2005, 03:49 AM
Yup the gasoline price jumps really are shocking. Luckily, I was able to advance-buy the 900 gallons of fuel oil I know that I'll need to heat my home this winter before the heating oil prices start rising like crazy too. I was also able to fill up my cars yesterday for $2.65 a gallon (gas stations along New York's I90 must get official gov't approval to make price changes which will take an extra day !), even though local gas stations all raised prices to over $3.00 today. But unlike the heating oil, I had no way to buy/store any more gas than the tanks in my cars could actually hold.

As to the 'political' side of the gas price equation, I was reassured to hear that the head of the EPA temporarily waived all fuel blend and low sulfur requirements, meaning that New York gas stations can now sell gas imported from New Jersey. Without this waiver it's very likely that downstate New York and other areas which have enacted state/local special fuel blend environmental laws would simply have run out of 'legal' gasoline supplies. Same problem applies to jet fuel, with several airports already running low (especially Atlanta), such that airlines are actually having to 'fly in' extra jet fuel from other airports to keep scheduled flights moving.

Even with the waiver though, lots of cities are going to find themselves in big trouble because the Continental Pipeline system which brings in new supplies of gasoline originates in Louisiana and is not operable due to power failures at key pumping stations. As such, all of the gasoline these cities have for sale is already held in the tanks of wholesalers - and I'm told represents about a 10 day supply at best. These wholesalers have already informed retail gas stations that they're going to received 'rationed' deliveries. These wholesalers have already informed 'off brand' discount retailers that their future supply may be cut off altogether. Hardest hit by this right now are cities like Atlanta, which doesn't have much wholesale tank storage since their proximity to Louisiana made pipeline resupply very easy (until last Saturday anyhow).

IMHO with the loss of the Continental Pipeline, and with the loss of many of Louisiana's gasoline refineries, it's entirely possible that we'll all see gas rationing put into effect before too long.

montythegeek
09-01-2005, 05:55 AM
IMHO with the loss of the Continental Pipeline, and with the loss of many of Louisiana's gasoline refineries, it's entirely possible that we'll all see gas rationing put into effect before too long.
You are seeing rationing---rationing by price.
this is the market sending the signal that things are not normal because 2 major pipelines are temporarily down and 8 major refineries are down because of no electricity and flooding.
The pipelines should start coming back by the weekend but the signal has to be sent to consumers that there is not enough gasoline today. If the price does not surge, no one knows and takes the bus or buys a car instead of a big-ass SUV.

If the lettuce crop fails people switch to cabbage and spinach. People need to know to walk a quarter mile rather than drive to buy just a quart of milk. These things are small but they add up.

The price has to surge to get refineries in the Caribbean to reallocate their inventories and current production to the US to fill the gap. Suspension of gasoline rules will eliminate some spot shortages from occurring--except no one will see things that do not happen and not understand its significance.

It would almost be worth it for the long run to see the current rules kept so people know how badly they can screw things up.

If the states really want to help consumers they can suspend state gas taxes for 60 days if the price including taxes exceeds $3/gallon. But no, the states will say we need the dollars so police cruisers (school busses, finance directors, meter readers) can idle in the parking lot and run the airconditioners while the driver is in Dunkin donuts getting coffee or sleeping.

Emily
09-01-2005, 10:05 AM
I'm still looking for that diesel....but I love luxury cars, and the only one that's in that category is a Mercedes E320. It gets about 35 mpg in realistic conditions. But damn, the money I save on gas would go straight to increased insurance premiums (not to mention the sticker price is 50k+)

I currently have a 2000 Lexus RX300. For a SUV, it's currently getting 20.6 mpg for all my city and hwy driving, so that's not that bad. My SUV comes in a hybrid for 2005, but those really don't get that great gas mileage.

I'm very lucky that I can absorb the increases in oil prices. I recently moved to a new house, and it has gas heat. My old house had oil heat and it was expensive last winter! It ended up being like $300/month for oil to heat the house. I think a lot of older houses have oil heat because it was so cheap for its time. I imagine this year it'll be double.

The sad thing is that the people that own these older houses are the lower income folks and they will have to deal with paying around $600/month to heat their homes as well as fueling their car.

It's scary how we've planned our whole lives around oil. People chose where they live and what they drive (the two biggest financial commitments a person can make) based on it and they are screwed.....I guess it's time to tap into our personal ATMs....ack, I mean....homes to get money out.

CuriousJ
09-01-2005, 10:18 AM
Has anyone really changed any of their driving habits ? Maybe buy more groceries when you go to the store etc . Dont just get into the car to drive a few blocks to go see a friend ? I am not driving my truck as much - I get on my motorcycle even though its still 106 outside dont like it but I think a changed mindset is neccesary for the time being .

Emily
09-01-2005, 10:26 AM
na, I drive the same. I don't drive that much except to go to work or local trips around town, like the gym or post office. I've never been the type to drive more than I have to. But as I mentioned above, I can absorb the price increases, so it's not affecting my lifestyle too much.

Melonie
09-01-2005, 01:53 PM
It's scary how we've planned our whole lives around oil. People chose where they live and what they drive (the two biggest financial commitments a person can make) based on it and they are screwed.....I guess it's time to tap into our personal ATMs....ack, I mean....homes to get money out.

Ah, but therein lies Catch 222 ... suburban culture, as well as suburban home price appreciation, are both based on cheap oil. 2-3 months from now, when people start factoring in the gasoline cost of commuting 40-60-100 miles round trip per day between their suburban home and their job in the city, they're going to discover that there just aren't enough dollars left out of their paycheck to cover a massive mortgage payment plus $150+ per week filling up their gas tank. This will prompt people to attempt to move closer to the city (which probably means renting), putting many more suburban homes on the market. Unfortunately, potential buyers will also be factoring in the gasoline costs of commuting from the suburbs by then, making for few potential buyers thus falling real estate market prices.

Emily
09-01-2005, 02:02 PM
You don't hear anyone saying "I've got to move"....people are saying "I've got to get a more gas efficient car". The city is for the carless. Auto insurance premiums and parking fees eat up the savings you get on gas.

VenusGoddess
09-01-2005, 03:25 PM
Scorpio drives relentlessly for his job. But, I hardly drive unless the weather is really bad or I have to go shopping. When I take Makayla to play groups, we bike to and from. It's great exercise for me and fresh air for her.

But, there are a lot of people who really cannot afford their cars now. Not only are the payments INSANE...the price of gas for someone who was just barely scraping by is now causing them to not make it. Might be a good time for some of those people to declare bankruptcy now while they still have the chance.

evilladybug
09-01-2005, 04:26 PM
now gas where i live at is $2.89 and $2.99 and also, $3.09 a gallon on depending what gas station u go to its still alot.

Melonie
09-02-2005, 02:15 AM
But, there are a lot of people who really cannot afford their cars now. Not only are the payments INSANE...the price of gas for someone who was just barely scraping by is now causing them to not make it. Might be a good time for some of those people to declare bankruptcy now while they still have the chance.

It's already too late to avoid the new bankruptcy laws by the time their new bankruptcy case can be filed. This will mean that if they do file for bankruptcy, even though their car will be repoed they will still probably be ordered by the bankruptcy judge to continue making small car payments for the next 5 years (to cover the gap between repo auction value and the amount they actually owe on the car loan), along with small credit card payments, small payments on unpaid utility bills etc. The new bankruptcy laws will mean that, for the first time, people can't simply walk away from their old bills - instead they must continue to pay perhaps 20% of their future after-tax incomes towards these old bills.

This is going to severely affect the future 'credit-worthiness' of people who go bankrupt under the new law. Thus a lot of them are going to have much more difficulty than in previous years in attempting to get financing to purchase a new more fuel efficient car, a new home, or much of anything else. This is the reason that IMHO we'll eventually see lots of migration from owning a house and car in the suburbs and instead renting a place (without a car) in the city.

AudreyLeigh
09-03-2005, 02:00 PM
This was odd - I drove home from LA last night ... the most I paid for gas was $3.24/gal BUT theres a little station off the freeway by my place... last night the gas was $3.03 but this morning when I drive by it went DOWN.. to $2.97 ... how odd... and especially over the holiday weekend...

FBR
09-03-2005, 03:17 PM
Theres a Sunoco around the corner from my office. Yesterday their price for regular was $3.09 with mid and premium grades priced at $3.19 and $3.29 respectively. I stopped by there today to buy a pack of gum and noticed that they had LOWERED their price for regular to $2.99. I asked the attendant (who was just a worker bee) about the surprising direction of the price change. She kind of shrugged and referred me to her boss who wasnt there of course LOL Maybe the folks at Sun Oil are trying to be good guys or maybe they know something about the dynamics of the market that we dont know. Interestingly, I believe this price is about the best in town at the moment yet there was only one vehicle filling up when I was there.

FBR

montythegeek
09-03-2005, 05:40 PM
FBR,
I can shed some light.
Some dealers price based on the price they paid for the last tank they had delivered. Some price based on what they think the next tank is going to cost. Gasoline is trade in a spot and futures market in New York harbor so some benchmark to the NYMEX futures price. I do not have access to the cash market data except through 8/31 on the DOE website but prices have come down since Wednesday.

Locally there is a Sunocco and Exxon station 250 feet apart. One is at 3.09 for regular and the other at 3.43. The are usually within 2 cents of each other. The 3.09 station was at 3.19 24 hours ago. I did not drive past the other one last night. The 3.09 station had 5 cars, the 3.43 station had 1. Based on the likely trend given NYMEX gas prices the 3.43 station is gonna have to eat it and cut prices at least 25 cents.

Melonie
09-04-2005, 09:39 AM
Monty, what do you make of this. In upstate NY, last friday Amerada Hess faxed a notice to all of the independently owned 'discount' gas stations who routinely bought bulk gasoline from Hess that these independently owned gas stations would no longer be able to purchase bulk gasoline from Hess (something that many of these 'discount' gas stations have loyally done for years). I take this to mean that Hess' regional gasoline bulk storage tanks are being drawn down, that Hess is worried about the availability of future pipeline gasoline deliveries to their tank farms (since these pipelines originate in Louisiana/Mississippi), and the Hess wants to keep what gasoline they now have for sale through their own Hess branded retail gas stations.

This is beginning to sound really ominous in terms of the availability and price of gasoline 2-3 weeks from now.

GnBeret
09-04-2005, 04:32 PM
This is beginning to sound really ominous in terms of the availability and price of gasoline 2-3 weeks from now.

We normally import about 10% of our daily consumption; the refineries that went down with the hurricane (and which will quite likely remain down for several more weeks before starting to come back on-line "piecemeal," with some possibly remaining down for a few months) account for about 11%...

I'd say "ominous" is a fair characterization of the signs you're beginning to see. And, of course, since the remaining refineries will now continue to produce gas way past the point where they would've otherwise switched to producing heating oil, the signs aren't looking too good there either... especially if we get hit with a really hard winter. :(

montythegeek
09-05-2005, 09:21 AM
Monty, what do you make of this. In upstate NY, last friday Amerada Hess faxed a notice to all of the independently owned 'discount' gas stations who routinely bought bulk gasoline from Hess that these independently owned gas stations would no longer be able to purchase bulk gasoline from Hess (something that many of these 'discount' gas stations have loyally done for years). I take this to mean that Hess' regional gasoline bulk storage tanks are being drawn down, that Hess is worried about the availability of future pipeline gasoline deliveries to their tank farms (since these pipelines originate in Louisiana/Mississippi), and the Hess wants to keep what gasoline they now have for sale through their own Hess branded retail gas stations.

This is beginning to sound really ominous in terms of the availability and price of gasoline 2-3 weeks from now.
Melonie,
Anytime there is a crunch the people who are crude short and independents get squeezed. First Hess produces less than half of the product it sells. (2004 annual report) Independents (while some may have been loyal customers for years) are not constrained to buy only Hess gas. Joe Blow gas station operator can drop a company like a hot potato and buy a load form anywhere. When prices spike, they are forced into the spot market cause the company feels no compunction to sell to someone who is mostly using their name. Indies right now have the highest, not the lowest prices (normal). Gas customers do not care whose gas they use either and switch.

One company is not a market. Hess has one big refinery in the Virgin Islands and not much else in refining. they do not have an option other than the spot market if their is any glitch. There could have been a problem at the VI refinery and they are protecting themselves.
They are also closely tied into the two pipelines affected by the hurricane. they also could have guessed wrong about prices and not had much inventory themselves (even if in total companies are much better off)

FBR
09-09-2005, 05:28 PM
My vote is for moving the last half dozen or so posts over to the bankruptcy thread (or starting a new one) Lets get back to bitching about the ridiculous price of gasoline.

The price has dropped a dime or two per gallon at least here in hicksville Ohio. But you can bet your life that when the pricing does stabilize it will be much higher than the previous pricing norms. This always happens when the market has hiccups. Use the consumer frenzy to bump the pricing baseline up.

Right now, the best price I have seen around town is $2.89 for regular. If I was driving the Escalade that would be a mute point since it requires premium. But as threatened I have parked the fat ride for my sons more svelt and regular sipping Cobalt. I cant believe Im getting wood from 28MPG ;)

FBR

kitana
09-09-2005, 06:23 PM
I cant believe Im getting wood from 28MPG

ROLF!!!! And hell I thought I was happy with 18mpg!

Yeah ok mod *looking down sheepishly*, gas here is about $2.89-$3.24 a gallon for regular. Yep, 87.

Melonie
09-09-2005, 06:30 PM
As far as the future of gasoline prices, a lot of this will have to do with supply versus demand -

- how much US refinery capacity will be able to get back online, and how quickly ?

- how much US refinery capacity can stay dedicated to producing gasoline, versus producing heating oil for the coming winter ?

- how long will the waivers overriding local 'boutique gasoline additives' requirements stay in effect - effectively allowing imports of gasoline from europe and other offshore sources to be brought into the US market and sold in any state/city, as well as allowing 'generic' US refined gasoline to be sold in all states/cities ?

- how much will American businesses and individuals reduce their gasoline consumption ?


PS I attempted to split out the bankruptcy discussion which wound up being posted in the middle of this gasoline price thread. A couple of posts got shuffled along the way - sorry about that.
~

DeLovely
09-09-2005, 09:06 PM
Here is a little bit of info on the subject of the price of oil

Melonie
09-10-2005, 07:46 AM
Well, I'm certainly not going to try and justify the huge profits that oil companies are raking in at the moment. However, part of the reason that oil companies 'profits' are so high is that they are not being allowed to reinvest profits into new oil and gas exploration & well drilling, new refineries etc. This creates a double whammy because it leaves us short of future domestic supply which continues upside pressure on oil and gas prices, plus it makes us even more dependent on importation of foreign supply which adds a 'risk premium' to the price.

I'll speculate that once the initial shock of Katrina is behind us, once the loss of gulf coast offshore wells, Louisiana refineries etc. is accurately assessed, and especially once US consumers see what sustained $3.00+ gasoline prices and $2.50+ heating oil prices and $11+ natural gas prices do to their personal finances and the US economy in general, that some serious attention to long term US oil and gas needs will finally be addressed by Washington. If/when that happens, the energy companies will finally be allowed to reinvest their profits into new offshore wells, new ANWR wells, new refineries etc. Given the 'peak oil' reality, this is the ONLY option which is actually going to stabilize oil and gas prices.

GnBeret
09-16-2005, 09:44 PM
... part of the reason that oil companies 'profits' are so high is that they are not being allowed to reinvest profits into new oil and gas exploration & well drilling, new refineries etc....

* * *

If/when that happens, the energy companies will finally be allowed to reinvest their profits into new offshore wells, new ANWR wells, new refineries etc.

What??? Although I suppose one could describe the extensive array of environmental laws and regulations that would have to be satisfied in order for any company to undertake construction of a new refinery as effectively constituting "not being allowed," there is no actual prohibition to same that I'm aware of. Beyond that, I tend to suspect the "oil companies" you're referring to are the big E&P companies (i.e., ExxonMobil, ChevronTexaco, et al.), who have by and large abandoned the refining end of the business to Valero and Tosco - who, in turn, have no E&P operations to speak of. Basically, the only refineries the "majors" have left are the ones they can't sell (several of which, at least for the 10-15 years prior to the past year or so, were consistently operated at a loss - 'cause it's cheaper to run the damn thing at a loss than shut it down and have the clean-up requirements kick in!).

As for E&P, again... what??? There's an 8 month waiting list to get a land rig right now - every available rig in the U.S., including a lot of old junkers that had been sitting out in fields rusting for years has been pressed into service and is actively drilling as we speak. And, as far as offshore goes, there's been no shortage of bids at the past few MMS auctions, new platforms are being built and installed (at a cost of billions apiece) constantly and, as is readily apparent from an examination of the "majors" seismic, land, and drilling budgets, the only real "limits" of any kind right now on their ability to reinvest in finding new reserves are the ones imposed by "physical realities," i.e., there are only so many companies in existence that can manufacture and supply the industry with the kinds of basic equipment it has to have to conduct E&P operations and all of those are currently building on a backlog basis.

Given same, I'd therefore assume you're referring to the restrictions that are currently in place on drilling in certain areas, such as ANWR and off the Florida coast???

Melonie
09-17-2005, 04:16 AM
I would argue that today's lack of available drilling rigs etc. is the direct result of past restrictions on 'domestic' oil and gas exploration. I would also argue that oil majors spinning off 'domestic' refining operations was also, at least in part, the result of the EPA's mega-fining (i.e. a refinery accident resulting in a billion dollar fine would probably bankrupt a Tosco, but would merely consume 100% of Exxon profits for the year). And yes I was talking about potential oil/gas fields with MAJOR development potential a la ANWR - small independents can afford to 'wildcat' on hit or miss exploration in areas of low potential, but the boards and stockholders of oil majors require much better odds of success in areas of much higher potential.

kitana
09-17-2005, 06:06 PM
It's currently $2.69.9 a gallon here. And gladly falling.

GnBeret
09-18-2005, 03:43 AM
I would argue that today's lack of available drilling rigs etc. is the direct result of past restrictions on 'domestic' oil and gas exploration....

Again... what restrictions? Except for the relatively small percentage of land in the U.S. that's been designated as "off-limits" for exploration, i.e., National Parks, wildlife preserves, etc. - much of which is of no interest whatsoever to the industry - there's little in the way of "restrictions" to speak of beyond the market itself. That (past market), and only that is the cause of today's lack of available drilling rigs. When natural gas was going for less than $2/mcf for 8-9 months out of the year (Spring - Fall) and rarely exceeding $4/mcf or $5/mcf during the 3-4 months of Winter (a condition which effectively lasted for a good 10 years or so), it was all but impossible maintain a steady drilling program - the margin was just too slim; two or three dry holes in a row and you were out of business. Consequently, hundreds of land rigs, which had been built at a cost of tens of millions apiece and contract out at a day rate of about $8,000, wound up sitting idle in cattle pastures all over Texas, Oklahoma, etc., for years - and quite predictably, the banks that had financed their construction showed no mercy and granted no quarter.

Having paid the penance for our failure to properly "risk-rate" the construction of capital-intensive infrasture and equipment with the possibilities of a long-term down market - in the form of what amounted to a regional "mini-depression" - the industry went back to the drawing board and recalculated things. And what you're seeing now are the results of that recalculation - the industry basically has to see enough indicators of the "floor price" remaining above a target number for the next five years before they'll commit to "big-ticket" items like building new rigs, i.e., they won't invest that kind of money in what amounts (or, at least quite possibly could amount) to nothing more than a "spike" in price / demand.



... I would also argue that oil majors spinning off 'domestic' refining operations was also, at least in part, the result of the EPA's mega-fining (i.e. a refinery accident resulting in a billion dollar fine would probably bankrupt a Tosco, but would merely consume 100% of Exxon profits for the year)....

Although the EPA regularly swoops in unannounced to audit refinery operations and ALWAYS levies fines of some sort (being government auditors, they have to justify their jobs somehow, right?), the in toto amount per year works out to a single digit percentage of their overhead and, like all of their other costs, it's rolled right back into the sale price of their products. As for "mega-fines," those are measured in the low millions, rarely levied in the first place and, even then, generally knocked down substantially through administrative appeals. EPA's focus is on daily emissions - they well understand that over the course of every so-many years of operation there will be an explosion or some other sort of major accident at a refinery due to the inherently dangerous nature of the process, and so long as the operator hasn't just been grossly negligent, they're not unreasonable - believe it or not, they're not out to put the industry out of business and, in many ways, EPA has actually become something of a "captured Agency" insofar as the Oil & Gas industry is concerned.



... And yes I was talking about potential oil/gas fields with MAJOR development potential a la ANWR - small independents can afford to 'wildcat' on hit or miss exploration in areas of low potential, but the boards and stockholders of oil majors require much better odds of success in areas of much higher potential.

Agreed... but insofar as ANWR goes, take a good look at who's actually doing all the bitching and moaning about it not being opened up; the politicians and businessmen in the States which will directly benefit IF it actually turns out to be what's known as an 'elephant' in the industry, NOT the industry itself. In fact, the ONLY oil companies trying to push it all are the few that have a substantial stake in the Prudhoe Bay complex... Gee, go figure. Billions in equipment parked on the North Slope atop a steadily declining field - though long-since paid for, think maybe they'd like to get another 15 years use out of it before abandoning it in place?!?::)

montythegeek
09-18-2005, 05:29 PM
I would argue that today's lack of available drilling rigs etc. is the direct result of past restrictions on 'domestic' oil and gas exploration.
The simple fact of the matter is that oil companies are not drilling like oil prices over over $60/bbl and gas is over $11/mmcf because they do not believe they will last that high. In December 1981 the rig count (Baker-Hugheshttp://www.bakerhughes.com/investor/rig/rig_na.htm )
was 4,530 and had risen by 1000 (3,328) in the year before that from numbers no one in the industry believed was possible to numbers no one believed was possible. Thos people got burned badlya and the rig count shrank in 728 in 1987 after OPEC started cheating. Those wildcatters went broke. Each time oil went to a new high their were fewer and fewer domestic independents to drill to plunge in and they went broke in the next bust. Oil companies slowed getting reserves by drilling and boosted getting reserves by buying them on Wall Street. Even today it is cheaper to buy a million barrels of oil reserves on Wall Street than it is to drill for it. Remember oil was $9/bbl in 1999 or less than a quarter of what it was in 1990. PS the rig count this week was 1436, up 16.6% from yearago.

Refining is a different issue. The margins are slim most of the time and the cost structure is very biased to be capital intensive. Then there is NIMBY. I would be big bucks that no one here wants a refinery in their town, and would rather have it 1000 miles away in New Orleans. Cities are falling over each other to fight natural gas delivery docks for imports saying they are a target of terrorists when every single terrorist with half a brain knows he can cause more terror and kill more people with 15 sticks of dynamite on the electrical grid into NYC than he can blowing up a natural gas tanker in New Bedford MA.

FBR
10-04-2005, 05:50 PM
Another POV

http://moneycentral.msn.com/content/invest/extra/P131570.asp?GT1=7159

With the exception of the Prius, whos paying attention to hybrids?

FBR

Gynger
10-04-2005, 06:59 PM
All I have to say is that it is a DAMN good thing my car is paid for.. I drive 90 miles round trip five days a week... and $260 in gas a month is like a fucking car payment!!!

madmaxine
10-05-2005, 03:05 AM
Thank you for the article link FBR....people are EATING less to offset gasoline expenditures? Yikes! How disturbing.

Melonie
10-05-2005, 03:26 AM
Imagine the effect that $3 gasoline is having on people who chose to buy an 'affordable' suburban home 60 miles away from where they work ! If they're driving a gas guzzling SUV they're now spending close to $1000 a month on gasoline.

montythegeek
10-05-2005, 05:18 AM
Imagine the effect that $3 gasoline is having on people who chose to buy an 'affordable' suburban home 60 miles away from where they work ! If they're driving a gas guzzling SUV they're now spending close to $1000 a month on gasoline.
This is an example of hyperbole.
60*2=120/day*5days/week=600 miles per week
600/15mpg=40 gallons*$3=120/week
(not price exagerated outside of california national average is $2.85 and falling)
120*4.25 weeks/month=$510 per month.

At the lowest price in the past decade it was 1/3rd that or $170. At the average it was half that or $255/month. For a $300 a month payment you can buy a car (used, 2 year old, 3 year loan) which gets more than double the mileage and pays for the gas differential. Out of pocket is less if you unload the guzzler. If someone is so dumb to drive a vanity gas-guzzler 120 miles/day if you cannot afford it I have no sympathy for you.

I have sympathy for the low income person who has a 30mpg car and cannot afford the gas cost increase from $180 to $250/month.

RicanAsianMa
10-05-2005, 01:07 PM
That's sooo cheap to me. I'll jump for those prices.

We are at $3.05-$3.44 here in downtown chicago

Deni
10-05-2005, 01:35 PM
I'm actually a bit surprised that the gas prices aren't a bit higher down here in Texas. We're running at about $2.79 here for regular right now. Even though that's low compared to some other areas, it makes me want to pull out my bicycle from the storage closet!

FBR
10-19-2005, 06:56 PM
I know I'm resurrecting an old thread but $2.39 a gallon today is cause for celebration LOL Actually its bullshit and profiteering but what can you do?

FBR

Melonie
10-20-2005, 01:11 AM
it's really shocking when you look back to the date when this thread was first posted ... 3-4 months ago gasoline selling for $2.40 a gallon was outrageous ... and today all of us would look upon $2.40 a gallon gas as a rare bargain. Now if only everyone's income had risen along with the gas price !

Deni
10-20-2005, 01:15 AM
Haha...true true, Melonie. Gas is running at $2.50 here right now. I told Mox I'd piss my pants if I ever saw $2.00 gas again...it's crazy to think only a few years ago people (not me because I wasn't old enough to drive yet :P) were getting gas for under a dollar!

threlayer
10-22-2005, 11:07 AM
This seems to be a good link, at least if it applies to your region already..... http://www.mapgasprices.com/

Gives a map and an address and regular gas prices of your local gas stations, at least in many locations. I believe it wants to go nationwide.