The price of gas

"G.R. Patterson III" wrote in message
...


Tom Sixkiller wrote:

"Jay Honeck" wrote in message
news:Ra1sc.10707$af3.571010@attbi_s51...
When it is profitable enough then more refining capacity will be
built.
On
the production side, the market is telling you that it is not very
attractive to drill at recent prices.

I was under the impression that restrictive EPA regulations had
essentially
halted new refinery construction?

And any NEW drilling.

And any existing well that ceases to produce has to be permanently capped.
When OPEC
drops the price down, an expensive well must either run at a loss or close
permanently.

Quite. And how many of those wells were capped using old technology that
only extracted a fraction of what's down there?

High real estate prices on the west coast have halted refinery construction
there as much as anything else. All factors are in play of
course...permitting requirements, local opposition, tax climate, the price
of steel, the non-desirablility of living next door to a refinery. When all
these variables are considered, there is a price level where a new refinery
will be built. When we get there, the refinery will be built.

Mike
MU-2


"Jay Honeck" wrote in message
news:Ra1sc.10707$af3.571010@attbi_s51...
When it is profitable enough then more refining capacity will be built.
On
the production side, the market is telling you that it is not very
attractive to drill at recent prices.

I was under the impression that restrictive EPA regulations had
essentially
halted new refinery construction?
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

"Mike Rapoport" wrote in message
ink.net...
High real estate prices on the west coast have halted refinery
construction
there as much as anything else. All factors are in play of
course...permitting requirements, local opposition, tax climate, the price
of steel, the non-desirablility of living next door to a refinery. When
all
these variables are considered, there is a price level where a new
refinery
will be built. When we get there, the refinery will be built.


Nice...you just contradicted what you said in your post to me.

"Mike Rapoport" wrote in message
nk.net...
When it is profitable enough then more refining capacity will be built.

Don't think so. Couldn't do it if they if they wanted to. If the regs were
"relaxed", it would still be prohibitive after the cost of dealing with the
regs were amortized.

On
the production side, the market is telling you that it is not very
attractive to drill at recent prices.

As one person pointed out to me: the oil companies that took a beating the
past ten years or so were the ones that merely did refining, not drilling.
(He mentioned Texaco and a few others I don't recall / recognize).

"Tom Sixkiller" wrote in message
...

"Mike Rapoport" wrote in message
nk.net...
When it is profitable enough then more refining capacity will be built.

Don't think so. Couldn't do it if they if they wanted to. If the regs were
"relaxed", it would still be prohibitive after the cost of dealing with
the
regs were amortized.


If refining is so incredibly expensive here then why isn't the refining
being done where it is cheaper and the final product shipped here for
consumption?

The logical conclusion is that refining here, with all the regulations, is
still economically favorable as compared to refining elsewhere.

"Peter Gottlieb" wrote in message
news

"Tom Sixkiller" wrote in message
...

"Mike Rapoport" wrote in message
nk.net...
When it is profitable enough then more refining capacity will be
built.

Don't think so. Couldn't do it if they if they wanted to. If the regs
were
"relaxed", it would still be prohibitive after the cost of dealing with
the
regs were amortized.


If refining is so incredibly expensive here then why isn't the refining
being done where it is cheaper and the final product shipped here for
consumption?

Probably because it's easdier/safer to transport crude than gasoline.


The logical conclusion is that refining here, with all the regulations, is
still economically favorable as compared to refining elsewhere.

And that's not even the point. (Try staying on the topic...or understanding
it to begin with).

"Tom Sixkiller" wrote in message
...

If refining is so incredibly expensive here then why isn't the refining
being done where it is cheaper and the final product shipped here for
consumption?

Probably because it's easdier/safer to transport crude than gasoline.

LNG is routinely transported. And I don't see and refineries around here,
all gasoline is shipped in.


The logical conclusion is that refining here, with all the regulations,
is
still economically favorable as compared to refining elsewhere.

And that's not even the point. (Try staying on the topic...or
understanding
it to begin with).


So what is the "point?" That you want to gripe that life is tough and you
should be free to do exactly as you please no matter how it affects others,
no matter what the economics are? The subject is titled "The price of gas"
so if not economics then what are we talking about?

This all boils down to economics. THAT is what the most important
consideration is. Short term pain (in the form of supply/demand imbalances)
result in longer term changes which tend to correct the short term problems,
but only when the economics favor the changes. At some price point it will
be favorable to either deal with this government's licensing and build
capacity here or to adjust the distribution and ship from refineries in
other countries. Or does simple economics break down when dealing with oil?

At some price point it will
be favorable to either deal with this government's licensing and build
capacity here or to adjust the distribution and ship from refineries in
other countries. Or does simple economics break down when dealing with oil?

But that price point wil be lower if the government simply gets out of the way
and lets the market do it's thing, leaving us more money to spend on avionics
or hookers or dentistry or whatever other item we would PREFER to spend our
money to obtain.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG

ackatyu (Wdtabor) writes:

But that price point wil be lower if the government simply gets out of the way
and lets the market do it's thing, leaving us more money to spend on avionics
or hookers or dentistry or whatever other item we would PREFER to spend our
money to obtain.

Yes. We need more Enrons to let us have more money.

BTW, very free markets were tried around 100+ years ago; and from that
unpleasant experience came Teddy Roosevelt, anti-trust laws,
meat-packing plant inspections, and on and on.

That goes without saying. But right now we have either the "tax and spend"
Democrats or the "spend and borrow" Republicans and guess who gets to pay
either way?


"Wdtabor" wrote in message
...
At some price point it will
be favorable to either deal with this government's licensing and build
capacity here or to adjust the distribution and ship from refineries in
other countries. Or does simple economics break down when dealing with
oil?

But that price point wil be lower if the government simply gets out of the
way
and lets the market do it's thing, leaving us more money to spend on
avionics
or hookers or dentistry or whatever other item we would PREFER to spend
our
money to obtain.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG