"Matt Barrow" wrote:
"kontiki" wrote in message
...
Matt Whiting wrote:


Anyone seeing any avgas shortages? I just learned that a local airport
(7N1) is out of gas. The FBO has a 10,000 gallon tank and ordered fuel
back in February and still hasn't received it. He ran out yesterday...

Matt

No, but I've been hearing reports that supply is very tight. The reasons
of course are this country's complete failure to improve infastructure
or explore for more supply of an important commodity.

Oh, they know where it is (Continental shelf, ANWR, etc.), so exploration is
rather worthless.

Do you know what the know proven reserves in ANWR are?
ZERO barrels. None, nada, zip.

And consider this scenario... ANWR is east of Prudhoe
Bay while the National Petroleum Reserve -- Alaska
(NPR-A) is to the west, and both are estimated by the
USGS to have about the same amount of oil, in about the
same type and size of reservoirs. Hmmm... what
significance does that have, you say?

First, there has been exactly 1 exploratory well drilled
in ANWR, in 1985. The results are secret.

Second, exploration wells have been being drilled in
NPR-A since the late 1940's. There are several known
reserves, none of which are large enough to warrant
production. A typical example is that a hole was
drilled about 50 miles southeast of Barrow this spring,
and it produced oil. It was not flow tested adequately,
but they estimate 300-400 million barrels. It is 150
miles or so to the nearest pipeline, so it will not be
produced.

Experience in NPR-A suggests that it might take 40-50
years of exploration in ANWR before even a single drop
of oil would be pumped out for sale.

Thus supply is
very short, demand is up and so are prices. Its economics 101.

Right now, two of the biggest refineries are shut down for maintenance, and
one had to be shut down for unexpected repairs. Petro industry people warned
about this for years and Katrina wasn't the wakeup call that cementheads
needed.

As most every one knows, we've not built a refinery in the US in 32 years,
and during that time

A totally bogus statement. The industry has been
rebuilding refineries as needed. Every time they rebuild
one, and increase its output, they *close* others....

Why would anyone build a new refinery??? All it would do is
add *excess* capacity. They wouldn't be able to sell the product
without lowering the price of products from other refineries.

Oil companies are not stupid!

http://www.ibdeditorials.com/IBDArti...63601990515635

/quote
Our refineries are doing more than ever, but their numbers are dwindling and
no new ones are being built. The reason is not greed, but cost and
regulations. From 1994 to 2003, the refining industry spent $47.4 billion,
not to build new refineries, but to bring existing ones into compliance with
ever new and stringent environmental rules. That's where those allegedly
excessive profits go.

Money spent on increasing the size and rebuilding
refineries is *not* profit.

That is also not some huge expense "to bring existing
ones into compliance". It is done to upgrade to more
efficient equipment, which is more profitable. The
total capacity is adjusted to *eliminate* unused
capacity! In other words, they do not have any
intention of building excess capacity which would cut
into profits. Oil companies are not stupid!

The fine line between just enough capacity and too much
or too little is drawn by the oil companies, and they
most certainly are not inclined to make sure there is
enough excess capacity to prevent price increases!

Claiming that no refineries have been built is
disingenuous, and simply insignificant. A great deal of
new capacity has been built, and there has been a huge
amount of capacity purposely shut down to maintain
higher prices.

The fact is that U.S. refining capacity has been growing at about 1% a year
for the past decade - the equivalent of adding a mid-size refinery every
year. Since 1996, U.S. refiners have expanded capacity by more than 2
million barrels a day This is a remarkable achievement in the face of
environmental mandates setting new ethanol usage and low-sulfur
requirements.

It is remarkably naive to believe that last sentence is
appropriate.

But the last major refinery built in the U.S. was in Garyville, La., in 1976
and the ones we have are getting older, no matter how well they're
maintained.

That is obviously not true, given the above statements
about rebuilding refineries.

Fifty out of 194 refineries were shut down from 1990 to 2004.
There is no slack in the system. Like the cars they fuel, periodic
maintenance us required.

And obviously oil companies *are*, and have been for
decades, fine tuning the refinery industry for maximum
profit.

/end



--
Floyd L. Davidson http://www.apaflo.com/floyd_davidson
Ukpeagvik (Barrow, Alaska)