Repercussions for people outside New Orleans

Mike Rapoport wrote:
The
reality is that the worldwide supply of gasoline is now reduced from what it
was last week and therefore gasoline is worth more. The price will rise
until demand is reduced to equal supply. It is an inescapable fact.

It is really more of a distribution problem than a supply problem. It is a
fact that the 20+ different blends required by 20+ different states have
drastically reduced the efficiency of refineries and distribution channels.
This adds about 20 cents per gallon of cost to fuel.

Its like trying to pour W100 down a funnel.

John T wrote:


Percentage-wise, that is correct. However, the SPR oil will go to
refineries (mostly in the Midwest as I understand it) that are streamlining
gasoline production (thanks to the EPA relaxing regional formula
restrictions). This will help reduce or eliminate shortages.

Exactly. Abolishing the EPA requirements of all of those different blends
will do far more to make gasoline available than any amount of crude oil
from the SPR.

On 2005-09-01, Jay Honeck wrote:
Thus, we find ourselves in the pickle we're in. One hurricane, and we're
*all* dead, economically.

Now that's just hyperbole, sorry. You're not all dead economically - far
from it.

--
Dylan Smith, Castletown, Isle of Man
Flying: http://www.dylansmith.net
Frontier Elite Universe: http://www.alioth.net
"Maintain thine airspeed, lest the ground come up and smite thee"

I think that, if any of you guys
have projects in mind that require plywood (perhaps work on your
hangar?), it might be a good idea to buy it now.

Perhaps is is more important for people to have homes than hoard for "hangar
improvements"?

On 2005-09-01, Jay Honeck wrote:
Now that their short-sightedness is hurting everyone, badly -- worldwide --
maybe you'll realize just how much harm environmental extremists have done.

Short sightedness? Leaving everyone to freely pollute would be short
sighted. This disaster, although on a massive scale, will be a mere blip
compared to the permanent damage that allowing unfettered pollution
would cause. Perhaps you ought to move to China, where there are few
environmental regulations. A friend of mine lived there. The stories he
told would make your wossnames spin. It is NASTY living in a polluted
cesspool. Of course, it's not in your back yard so you probably don't
mind so much so long as your fuel is cheap. So what if refinery workers
are being poisoned and so what if residents of Texas City have a life
expectency twenty years shorter than they do now. Having lived in that
area, I can tell you that the environmental regulations need
*tightening* or the whole area will be a toxic wasteland for our
children and grandchildren to spend billions on cleaning up.

You know I didn't need the marker beacon to tell me when I was over the
OM for Galveston on the ILS 13? You knew the OM was coming because you
could smell this foul, sickening smell from the refineries. Any time
there was a temperature inversion, the air turned green. The otherwise
gorgeous blue winter days in Texas were marred by the stench of the
refineries in Pasadena. It used to be worse - the DE I flew with for my
instrument and glider rides told me what the sickness rates used to be
like and the rivers devoid of fish. Rivers that would periodically catch
fire. Xylene showers. Industrial accidents that were so common no one
even blinked.

I've lived in one of America's most polluted cities - I dread to think
what the place would have been like without the fairly weak
environmental regulations that were in place. It is NOT impossible for
oil companies to build more refineries. I think Mike Rappoport explained
it pretty well already. Much of the 'self imposed' disaster is because
the western world has generally moved to a just-in-time system of doing
pretty much everything, where everything is run at exactly capacity with
absolutely no margin for error - intentionally, to cut costs to the bare
minimum.

--
Dylan Smith, Castletown, Isle of Man
Flying: http://www.dylansmith.net
Frontier Elite Universe: http://www.alioth.net
"Maintain thine airspeed, lest the ground come up and smite thee"

Jonathan Goodish wrote:
In article .com,
ckingsbury wrote:
The only twig of truth you have to stand on here is OPEC, and they're
not really a factor at this point. No one's witholding significant


Right now, as I understand it, there are two big problems with supply:
refinery capacity and delivery. Refinery capacity has been a growing
problem for some time, and the environmental laws requiring special
blends for certain parts of the country compound this capacity problem.


As I understand it, refining is actually a pretty low-margin business,
which tends to discourage investing in one iota more capacity than you
can sell tomorrow. The issue of blends is an interesting one and I have
heard people with no dog in the fight take both sides. Broadly speaking
it is nowhere near as profound as the lead/no-lead aspect which affects
100LL production. Surely doesn't help, but I'm not convinced it's
anywhere near a primary cause.

Delivery is a largely new problem spawned by the destruction of the
hurricane.

It's also part of a wider dependence on highly-tuned supply chains.
Holding inventory costs money and these days most businesses are trying
to do Just-in-Time processes as much as possible. This is like filling
your car with just enough gas to make the specific trip- it saves the
weight of hauling around gas, but if the gas station at the other end
is closed, you'll run out of gas before you get to the next one.

The bottom line is that environmental laws have a fairly substantial
financial impact on all industry, and the petroleum industry in
particular. New refineries could be built, but it would be so expensive
to build and operate them in compliance with environmental laws that it
would not be worth it.

Tightness of refinery capacity leads to short-term price volatility but
is not the main reason. Gas prices had been relatively stable from the
early 80s until last year, despite (1) no new refineries being built
and (2) major growth in consumer demand for gasoline. In the short term
the loss of a pipeline or refinery can cause regional spikes but these
disappear the minute the production comes back.

However, refining capacity has absolutely zilch to do with crude prices
and they are the primary determinant of pump prices, 85% according to
this FTC study:

http://www.ftc.gov/opa/2005/07/gaspricefactor.htm

The root cause here is a major secular increase in demand for oil,
especially from China which has exploded in the past 2 years. We could
build ten more refineries next week and that would do nothing to
extract more crude
or reduce Chinese demand for it. There's little threat of running out
of oil anytime soon (at $80 extracting from shale/tar sands becomes
profitable, and reserves of those are enormous) but unless we find
major new easily-accessible reserves (unlikely, it's not as though
we're not looking) or the Chinese decide they don't ll want to drive
cars and have electric lights after all, prices aren't going back to
$1.50 in our lifetime.

On top of all of the other costs, most areas pay AT LEAST 50 cents per
gallon in state and federal consumer taxes. Suspension of these taxes
would help to ease gas prices, but those crafty politicians know that if

You know, I could care less about "the environment" (I mean, a 10-day
forecast fore one city is as good as a ouija board, but these guys
think they can forecast global weather patterns 100 years into the
future?) but reliance on imported oil is starting to scare me. All we
need is Iran to light the fuse on a nuke and some 10-cent Castro
impersonator in Venezuela to yell "f--k you Yanqui!" and our entire
economy skids off the cliff in a few months.

Compared to the 1970s we use about half as much oil per dollar of GDP,
which is why this run-up has not wrecked the economy. To the extent
that we reduce our dependence on oil or other foreign energy sources,
we increase our economic and ultimately military security. Every dollar
the price of crude goes down means millions less to finance Iranian
nukes and Saudi terrorists.

So, in my mind the high price of gas is the best way to spur
conservation. The government could mandate things but all of us as
individuals will figure out better and cheaper ways on our own. I would
not support a tax increase however, because I don't support increasing
the size of government, period.

On another note, anyone who lives near the ocean in a city that's 18
feet below sea level is living on borrowed time until the next disaster.

New Orleans developed into a metropolis long before there was insurance
for anything, not to mention the epidemics of yellow fever that killed
more than any hurricane. A much more interesting argument can be made
that the levees are the critical piece. Without them, the river would
have moved west and left New Orleans with a mud puddle instead of a
deepwater port. Without the port, the city loses a primary reason to
exist, and dries up like a midwestern town whose railway spur gets shut
down.

-cwk.

Chris wrote:

"Jay Honeck" wrote in message
news:XpERe.80402$084.49625@attbi_s22...

Listen up people, it is WAY past time for us to develop more of our
own oil reserves and build another refinery (at least). We are now
seeing the absolute total folly of not building required infrastructure
to support our current economic lifestyles.

Personally, if I were in a position of responsibility and had failed
so miserably at maintaining adequate facilities and preparing contingent
operations I should FIRED.... perion, end of story.

They can't maintain contingent operations, because they can't build new
refineries -- period.

Look at the environmental laws that restrict refineries. Look at the
number of refineries built since those laws hit the books.

It ain't a coincidence, and anyone who says that the "free market" is at
work here just hasn't looked at the problem.


The free market is at work which is why Europe is facing higher gas prices
as US buyers come looking for gas.

Personally I would shut them out and say if you were not buying from us
before go away, and leave the US to rot this time but money always wins out.

You mean the way the USA left Europe to rot after WW II?

Matt

Chris wrote:

"Dylan Smith" wrote in message
...

On 2005-09-01, Chris wrote:

Personally I would shut them out and say if you were not buying from us
before go away, and leave the US to rot this time but money always wins
out.

My, aren't you bitter.

Its not bitterness at all, perhaps this is the time for the US public to get
a wake up call an see that how they carry on is not sustainable. in terms of
motoring,
when most of us have gone to the effort of having cars with good economy it
just seems stupid to let the resource go where there is tremendous waste.
Maybe if they had to do less driving , (I know, its a sacrifice,) then the
fuel available would go a lot further.



Where do you live? I'm guessing it isn't in an area where the nearest
grocery store is 5 miles away.


Matt

"Dylan Smith" wrote in message
...
On 2005-09-01, Jay Honeck wrote:
Now that their short-sightedness is hurting everyone, badly --
worldwide --
maybe you'll realize just how much harm environmental extremists have
done.

Short sightedness? Leaving everyone to freely pollute would be short
sighted. This disaster, although on a massive scale, will be a mere
blip
compared to the permanent damage that allowing unfettered pollution
would cause. Perhaps you ought to move to China, where there are few
environmental regulations. A friend of mine lived there. The stories
he
told would make your wossnames spin. It is NASTY living in a polluted
cesspool. Of course, it's not in your back yard so you probably don't
mind so much so long as your fuel is cheap. So what if refinery
workers
are being poisoned and so what if residents of Texas City have a life
expectency twenty years shorter than they do now. Having lived in that
area, I can tell you that the environmental regulations need
*tightening* or the whole area will be a toxic wasteland for our
children and grandchildren to spend billions on cleaning up.

You know I didn't need the marker beacon to tell me when I was over
the
OM for Galveston on the ILS 13? You knew the OM was coming because you
could smell this foul, sickening smell from the refineries. Any time
there was a temperature inversion, the air turned green. The otherwise
gorgeous blue winter days in Texas were marred by the stench of the
refineries in Pasadena. It used to be worse - the DE I flew with for
my
instrument and glider rides told me what the sickness rates used to be
like and the rivers devoid of fish. Rivers that would periodically
catch
fire. Xylene showers. Industrial accidents that were so common no one
even blinked.

I've lived in one of America's most polluted cities - I dread to think
what the place would have been like without the fairly weak
environmental regulations that were in place. It is NOT impossible for
oil companies to build more refineries. I think Mike Rappoport
explained
it pretty well already. Much of the 'self imposed' disaster is because
the western world has generally moved to a just-in-time system of
doing
pretty much everything, where everything is run at exactly capacity
with
absolutely no margin for error - intentionally, to cut costs to the
bare
minimum.

Attaboy, Dylan.

I'm a Houston native, myself, and one of my strongest childhood memories
is of our family reunion being driven from Milby Park by the vile stench
coming from a nearby chemical plant.

Houston is still a nasty place under a temperature inversion, but it
used to be worse before there were even the half-hearted environmental
regulations that are in place now. Upper Galveston Bay is still so
polluted by Buffalo Bayou--Houston's filthy industrial artery--that its
fish cannot be eaten.

Jay, you simply have no idea.

--
Dan
C172RG at BFM

The challenges are the roads from the warehouse to the store.

"Matt Whiting" wrote in message
...

Where do you live? I'm guessing it isn't in an area where the nearest
grocery store is 5 miles away.


Matt