On May 16, 8:05 pm, "Matt Barrow"
wrote:
"Robert M. Gary" wrote in ooglegroups.com...





On May 16, 6:18 am, "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.

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

When supply is tight, fule suppliers with do what they call
"allocating". Customers that are not branded (and just shop
around for the lowest prices when they need fuel) can be left
without fuel in favore of allocated customers. It happened
for a while when Katrina hit.

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.

In 2006, the blending of ethanol into gasoline reached a new high of more
than five billion gallons and production if new clean-burning ultra
low-sulfur diesel fuel topped a record 2.6 million barrels a day at the
end
of last year.

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.

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. 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.

/end

BTW, regarding that 2 million bbls/day of expanded capacity (we use,
what,
10 million a day?), two studies several years ago (late 70's early 80s')
calculated we could save over 10% annually on gas usage by merely
coordinating traffic signals better. Of course, that would mean
localities
would possibly have to give up $$billions in reveune from fines. It also
means that those self-same localities would have to get off their asses
and
do the work of setting them correctly. Fat chance: the built-in
congestion
is now FAR worse, with traffic cams and the like. NO, it's so much easier
to
pontificate "Public Service" BS like "share a ride", "ride your
bike"...
It's nice to have the advertising budget, too.

--
Matt Barrow (14 years in the road design/building business)
Performace Homes, LLC.
Colorado Springs, CO

All very true. However, lack of capacity does not result in shortages
as the OP suggests.

Really? Shortages (capacity) do not cause other shortages (output)? Great
logic...mind 'splaining that one?

I'm not sure teaching an entire economics class is possible within
this forum but the short answer is, if the gov't stays out of it
prices will quickly adjust to adjust to output levels. In the stock
market supply of available stock changes by the second, as do
commondities, exchange rates, etc, in all these cases prices adjust
such that everyone can buy a share of stock, the only question is the
price. In retail fuel, prices often change more than once per day.

-Robert, MBA