Gas Prices -- Help at last?

"Matt Barrow" wrote in message
...

"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
...

"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
...


Maybe because the US imports refined FINISHED products (much more
costly to buy as well as transport).

Not really true. The US only imports about 14% of its gasoline and US
gasoline production is up *not* down as your article implies.

The article doesn't make a distinction about type of fuel, only refinery
capacity. Also, the gasoline to other fuels mix has increased, correct?
I suspect the US produces much less heating oil than in the past, most
heating being done with natural gas or electric.

Total distillates (diesel, heating oil, kerosene) refined in the US have
increased 80% over the past 23yrs.

And gasoline is up 25% (6600-8800Mbbl).

Yes, everything is up, gasoline, diesel, heating oil, kerosese but people
say that enviornmental regulation has prevented capacity expansion. It
simply isn't true.


As well, what amount of finished product did we import in the past?
AIUI, it was zero until the past few years.
--
Gasoline imports have increased over time, but still remain at low
levels.

14% of US usage.

Yes and it is important to recognize that if oil exporters build refineries
to capture downstream revenue and export gasoline (instead of crude) that
expanding US refining capacity accomplishes nothing. If the Candians start
exporting lumber instead of logs should the US build more sawmills? It is
the same thing.


When you take all the facts together, it seems that refining capacity
over the past 25yrs has been driven by economics not regulation.

I never said otherwise. I also never said our capacity was down. What I'd
said was that capacity growth was consrained, that we were becoming too
centralized in our geographic dispersment (see the results of Hurricane
Katrina).

You may not have said it, but you presented an article that claims that
refining capacity is down from 18.6MM bbl to 16.9MM bbl. I agree that *this
quarter* we are too geographically concentrated but these are supposed to be
50yr storms. The refineries are on the Gulf Coast because that is where
imported crude arrives and land is cheap. It makes sense to locate the
refineries in what are the best locations the overwhelming majority of the
time instead of moving them somewhere else.


The "lack of refining capacity"

That's your point, not mine nor the point of the IBD article. The point is
that our capacity is constrained and cannot grow enough to meet growing
demand.


The article is allegedly the source of the reduction of refining capacity
from 18.6 to 16.9

hysteria is simply the latest thing for pundits to talk about.

The article I linked to was hardly hysterical. The hysteric were from Reid
and Waxman coming from the other direction. As much, I would hardly say
those two bozos had any grasp of the situation.

The conservatives want to blame the enviornmentalists and the liberals
want to blame the greedy oil companies. Hopefully the rules will remain
unchanged and economics will continue to drive decision making. Refiners
are flush with cash and don't need taxpayer handouts either directly or
indirectly through relaxed regulation. Putting things in perspective: we
had two "fifty year" storms in two weeks than directly hit major refining
areas, having a huge reaction seems unwarranted. One factor that gets
ignored is that, if you build new refineries, each one adds huge amounts
of capacity. It would only take a few new refineries to create a
refining glut.

Well, let's let the market decide how much is enough, okay?

I'm for that. I expect to see ongoing increases in capacity as we have
every decade for the past 100yrs.

Mike
MU-2

"Matt Barrow" wrote in message
...

"Mike Rapoport" wrote in message
nk.net...
That total capacity figure might just be wrong. The DOE has every major
product up over the period.


The DOE is measuring output, not capacity. Capacity is measured at the
100% level, but only a fool runs long-term at or near 100%.

Historically, heavy equipment runs at 65-80% of capacity, so as to allow
maintenance and fallbacks in the event of a partial system failure. There
are strategic issues as well.


True but unless refiners were running about 60% capacity in 1982 then
capacity must he higher today. My cousin ran Chevron's refining business
for a period in the 80s and they were *always* spending a hundred million
here and a hundred million there to expand capacity at existing refineries.

Mike
MU-2

"Mike Rapoport" wrote in message
k.net...

"Matt Barrow" wrote in message
...

And gasoline is up 25% (6600-8800Mbbl).

Yes, everything is up, gasoline, diesel, heating oil, kerosese but people
say that enviornmental regulation has prevented capacity expansion. It
simply isn't true.

Well, the article says no such thing regarding EXPANSION, though it does
mention the $$billions spent over the last ten years complying with
environmental regulations at EXISTING refineries.



14% of US usage.

Yes and it is important to recognize that if oil exporters build
refineries to capture downstream revenue and export gasoline (instead of
crude) that expanding US refining capacity accomplishes nothing. If the
Candians start exporting lumber instead of logs should the US build more
sawmills? It is the same thing.

Well when lumber becomes much more dangerous and expensive to transport they
should. Also, if EPA regs forbid making lumber, then what?




You may not have said it, but you presented an article that claims that
refining capacity is down from 18.6MM bbl to 16.9MM bbl. I agree that
*this quarter* we are too geographically concentrated but these are
supposed to be 50yr storms. The refineries are on the Gulf Coast because
that is where imported crude arrives and land is cheap. It makes sense to
locate the refineries in what are the best locations the overwhelming
majority of the time instead of moving them somewhere else.

And how many are hitchhiking on the San Andreas fault?


The "lack of refining capacity"

That's your point, not mine nor the point of the IBD article. The point
is that our capacity is constrained and cannot grow enough to meet
growing demand.


The article is allegedly the source of the reduction of refining capacity
from 18.6 to 16.9

Pardon? What is the source of the reduction?



Well, let's let the market decide how much is enough, okay?

I'm for that. I expect to see ongoing increases in capacity as we have
every decade for the past 100yrs.

Well, if # of refineries had slipped 55% and total capacity has slipped 10%,
that trend is no longer in place.

If the trend continues, in 100 years we will have one refinery. Just how
much can you expand production?

Because the price of gas has doubled?

"Everywhere, every day on the radio, television, and in the newspapers,
all I
hear is how the "Record Price of Oil" is killing America.

Yet, strangely, Americans keep driving *more*. And I don't see anyone
flying less."
- you!

Are you being purposefully dense, John, or does it just come naturally?
I'm sure you know that I wrote that in a thread that pre-dated the
incredible run-up in gas prices after Katrina.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

You've actually got me thinking about it, John. I only realized what
a perfect candidate I was for riding my bike to work after this
thread.

Good on you, you environmental whacko! ;^)

Well, I've lost 20 pounds since spring through diet and regular exercise.
Combining work and work-out doesn't sound like a bad idea!

:-)
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

When you take all the facts together, it seems that refining capacity over
the past 25yrs has been driven by economics not regulation. The "lack of
refining capacity" hysteria is simply the latest thing for pundits to talk
about. The conservatives want to blame the enviornmentalists and the
liberals want to blame the greedy oil companies. Hopefully the rules will
remain unchanged and economics will continue to drive decision making.
Refiners are flush with cash and don't need taxpayer handouts either
directly or indirectly through relaxed regulation.

I never thought I'd live long enough to hear a free-marketer like Mike refer
to "relaxed regulations" as a "taxpayer handout."

What a bizarre world this has become.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

On Wed, 12 Oct 2005 10:42:24 -0400, "JohnH"
wrote:

"Everywhere, every day on the radio, television, and in the newspapers, all
I
hear is how the "Record Price of Oil" is killing America.

Yet, strangely, Americans keep driving *more*.

Don't know where you are getting that information, but the news I
watch tells me that the high cost of fuel definately has curtailed
driving.

It's nearly impossible to buy a Toyota Prius in California, so my
sister in law who lives there tells me. Dealerships all across the
country are having problems selling SUV's for some reason, couldn't be
their wretched gas milage could it?

Corky Scott

"Jay Honeck" wrote in message
news:Bpv3f.435576$_o.30020@attbi_s71...
I never thought I'd live long enough to hear a free-marketer like Mike
refer to "relaxed regulations" as a "taxpayer handout."

What a bizarre world this has become.

It's only "bizarre" to black & white thinkers. The world has always been
nuanced shades of gray, and only seems bizarre to people who insist there's
always simply a "right" side and a "wrong" side to every argument.

Pete

Well, if # of refineries had slipped 55% and total capacity has slipped
10%, that trend is no longer in place.

If the trend continues, in 100 years we will have one refinery. Just how
much can you expand production?


I don't buy the story that capacity has slipped 10%.

Mike
MU-2

"Jay Honeck" wrote in message
news:Bpv3f.435576$_o.30020@attbi_s71...
When you take all the facts together, it seems that refining capacity
over the past 25yrs has been driven by economics not regulation. The
"lack of refining capacity" hysteria is simply the latest thing for
pundits to talk about. The conservatives want to blame the
enviornmentalists and the liberals want to blame the greedy oil
companies. Hopefully the rules will remain unchanged and economics will
continue to drive decision making. Refiners are flush with cash and don't
need taxpayer handouts either directly or indirectly through relaxed
regulation.

I never thought I'd live long enough to hear a free-marketer like Mike
refer to "relaxed regulations" as a "taxpayer handout."

What a bizarre world this has become.

He didn't read the article (he's misquoted it about five times, confuses
capacity with output...), then he goes off of numerous tangents and into
various non-sequiturs. He's playing "Pay no attention to that man behind the
curtain".