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U.S. oil production reaches historic high As price plummets
UPI.com ^

Posted on 06/11/2012 8:21:52 PM PDT by jyro

WASHINGTON, June 11 (UPI) -- Federal leases in the Gulf of Mexico, along with output from Texas and North Dakota, pushed U.S. oil production to its highest level in 14 years, the EIA said.

The U.S. Energy Department's Energy Information Administration reports that U.S. oil production during the first quarter of 2012 topped 6 million barrels per day for the first time since 1998.

"The roughly 6 percent growth in U.S. oil production from October 2011 through March 2012 is largely the result of increases in oil output in North Dakota, Texas and the Gulf of Mexico," the agency said in a statement.

The EIA said Texas and North Dakota are the top oil-producing states in the country.

The EIA information follows an effort in the Republican-controlled U.S. House of Representatives to increase access to the National Petroleum Reserve-Alaska and remove federal burdens to onshore oil and gas leases.

Democratic leaders said the effort is in contrast to recent oil production data and trends in the retail energy market.

The EIA indicated U.S. oil production was steady at around 5.5 million bpd for much of 2011

Read more: http://www.upi.com/Business_News/Energy-Resources/2012/06/11/US-oil-production-reaches-historic-high/UPI-54781339419354/#ixzz1xYNVyMj5


TOPICS: Business/Economy; History; Miscellaneous
KEYWORDS: anwr; economy; energy; fuel; gulfofmexico; keystonexl; mexico; northdakota; oil; oilproduction; opec; prices; texas; usoil
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as the price plummets
1 posted on 06/11/2012 8:22:03 PM PDT by jyro
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To: jyro

But Gas prices remain the same.


2 posted on 06/11/2012 8:23:32 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: jyro

Sure would like to see that plummet. It’s plummeted like, 1 penny, in the last 6 months.


3 posted on 06/11/2012 8:24:04 PM PDT by lurk
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To: jyro

price isn’t going down, we know from reading the NY Times, that increased production doesn’t lead to lower prices.


4 posted on 06/11/2012 8:24:40 PM PDT by dila813
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To: mylife

“But Gas prices remain the same.”

This is because the price of the gasoline has dropped, but the price of Unicorn Fart EPA-mandated additive has gone up.


5 posted on 06/11/2012 8:28:08 PM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: jyro

Funny how...

Every time we increase production the media reports the price goes down.

And every time we talk about increasing production the media reports it won’t bring down the price.

Just no explaining that- since the media is honest and fair...


6 posted on 06/11/2012 8:28:56 PM PDT by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat Party!)
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To: jyro

Is there a nice way to call these friggin liars “friggin liars”?


7 posted on 06/11/2012 8:31:05 PM PDT by Whats-wrong-with-the-truth (Romney (aka - obomney)... Just put the (D) behind your name and be done with it.)
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To: The Antiyuppie

I failed to factor in the Unicorn Fart EPA-mandated additive!!

I imagine Gas will drop. In October!


8 posted on 06/11/2012 8:34:01 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: jyro

The price has not plummeted. They are still very high. Oil prices should be at about $30-40 if drilling was expanded.


9 posted on 06/11/2012 8:37:19 PM PDT by SeaHawkFan
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To: jyro
The increased output reported by the government is a lie. The Obama administration has put crippling regulations on our domestic energy producers. His banning of drilling has devastated an entire industry, leading to massive unemployment in that sector.

And the pain at the pump due to curtailing American drilling lies squarely with Obama who advocates the utter nonsense of so-called "green" energy:


10 posted on 06/11/2012 8:43:23 PM PDT by re_nortex (DP...that's what I like about Texas.)
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To: jyro

It is true.

We produced 194 million barrels of crude oil in March 2012.

This is the most we have produced since May 1998.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=M


11 posted on 06/11/2012 8:48:45 PM PDT by moonshot925
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To: jyro

12 posted on 06/11/2012 8:52:30 PM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: jyro

Oil Tanker Rates Lowest Since 1997 as Demand in Europe Plunges
http://www.freerepublic.com/focus/f-news/2892191/posts


13 posted on 06/11/2012 8:54:45 PM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: jyro

The headline indicates that American oil production hit a historic high, but the text indicates it is the highest in fourteen years.

At any rate, this is terrible news for the enviros and the ‘green energy’ president.


14 posted on 06/11/2012 8:56:29 PM PDT by MichaelCorleone (The GOPe has played us like a violin for the last time; high time to build the Constitution Party.)
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To: lurk

Platts Report: China’s Oil Demand Drops in March
Lowest daily rate this year, but up 3.3% from March 2011
http://finance.yahoo.com/news/platts-report-chinas-oil-demand-144400368.html


15 posted on 06/11/2012 8:57:01 PM PDT by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: jyro

I’m. I’m not seeing it here in Fairbanks.


16 posted on 06/11/2012 8:59:40 PM PDT by vpintheak (Occupy your Brain!)
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To: moonshot925

So much for Peak Oil.


17 posted on 06/11/2012 9:01:11 PM PDT by Kickass Conservative (The only good Zombie is a dead Zombie, oh wait...)
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To: jyro

What price plummet? The only thing that has plummeted is the price of crude. Meanwhile the refining margins have zoomed.

In the last year crude oil has dropped about 25% from the high while gasoline has dropped only 10%. The oil industry doesn’t help their public image much when this much information is available.

http://gasbuddy.com/gb_retail_price_chart.aspx


18 posted on 06/11/2012 9:03:26 PM PDT by Sequoyah101 (You've been screwed by your government.)
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To: vpintheak

http://online.wsj.com/article/BT-CO-20120611-712724.html
Crude Settles at $82.70/Bbl, Lowest Since October
.


19 posted on 06/11/2012 9:06:17 PM PDT by jyro (French-like Democrats wave the white flag of surrender while we are winning)
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To: jyro

http://www.krmg.com/news/news/local/fact-check-oil-production-under-obama-only-private/nLZmf/


20 posted on 06/11/2012 9:11:23 PM PDT by Doogle (((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated)))
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To: thackney

Ping


21 posted on 06/11/2012 9:57:38 PM PDT by ScottfromNJ
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To: Doogle
PN Bakken: California refiner loves North Dakota oil

http://www.petroleumnews.com/pntruncate/768751516.shtml

Strange as it may seem to purchase oil from afar when so much crude is produced nearby, there’s every reason to believe other refineries will soon follow 26,000-barrel-a-day Kern Oil & Refining’s lead,

Tesoro Corp. said it was spending $50 million to build new rail loading and unloading facilities at its 120,000 bpd refinery in Anacortes, Wash. The upgrade would allow it to receive up to 30,000 bpd of North Dakota crude — up from 1,000 to 2,000 bpd now. (The project aimed to cut Tesoro’s use of Alaska North Slope crude. In March, construction began and Tesoro ordered about 800 rail cars, which it said can accommodate another 10,000 bpd of Bakken crude.)

22 posted on 06/11/2012 9:58:20 PM PDT by spokeshave
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To: mylife

“But Gas prices remain the same.”

Or they go up. Here in our part of Ohio we have yo-yo pricing on gasoline. The price goes up and down on a weekly basis, and has no relationship to the price of crude, or to supply and demand (it is often lower on weekends thru Tuesday or Wednesday). We have a Marathon refinery here, and the Marathon stations are sometimes lower. Speedway is a Marathon subsidiary, and Speedway is generally the leader in the upside of the yo-yo. That is my own observations. We are no where near the price of gasoline that $82 a barrel should support.

The other side of the coin, of course, is that super high gasoline pricing can and should be blamed on the O’Bummer and help him be a one term Presidential Usurper.


23 posted on 06/11/2012 9:58:31 PM PDT by GGpaX4DumpedTea (I am a Tea Party descendant...steeped in the Constitutional Republic given to us by the Founders.)
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To: GGpaX4DumpedTea

Here in Texas Gas has gone down like 5c when oil is down $20 a barrel


24 posted on 06/11/2012 10:01:39 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: SeaHawkFan

“They are still very high. Oil prices should be at about $30-40 if drilling was expanded.”

Realistically, $10 a barrel is a fair price on the low side, and maybe $15 a barrel on the high side. And $1 a gallon for gasoline should be max.


25 posted on 06/11/2012 10:02:58 PM PDT by GGpaX4DumpedTea (I am a Tea Party descendant...steeped in the Constitutional Republic given to us by the Founders.)
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To: mylife

Gas is down about 35 cents the last few weeks here in SoCal. Just paid $3.89 for a few gallons today.


26 posted on 06/11/2012 10:11:08 PM PDT by rottndog (Be Prepared....for what's coming AFTER America...)
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To: rottndog

$3.24/9 here


27 posted on 06/11/2012 10:14:01 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: mylife

Gas price for a gallon in my area has gone from $3.93 to $3.35 in the last two months. Still sucks though.

But this article lies, it actually tries to attribute the production increase to leases granted when they still are at lows in the Gulf after the BP “disaster”.

It’s a typical left wing statistical lie. Kind of like claiming there is a 200% rise in a disease if it goes from one person getting it to three.


28 posted on 06/11/2012 10:14:37 PM PDT by Fledermaus (Democrats are dangerous and evil. Republicans are just useless and useful idiots.)
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To: rottndog

I saw $3.23 today in texas


29 posted on 06/11/2012 10:14:50 PM PDT by jyro (French-like Democrats wave the white flag of surrender while we are winning)
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To: jyro

California has a ‘summer blend’. Costs more and gas mileage is less. SUCKS!


30 posted on 06/11/2012 10:21:52 PM PDT by rottndog (Be Prepared....for what's coming AFTER America...)
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To: jyro

It is an election year. Oil prices always drop in an election year.


31 posted on 06/11/2012 10:25:04 PM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: jyro
BTW....the drop in price has two factors behind it...yes production is up, but the real eye opener here is the steady drop in demand.

Summer is just starting in the Northern Hemisphere...demand and prices should be going up—vacations, travel, and manufacturing should be ramping up, and demand should follow. Looks like the economy here, plus the impending collapses in Europe, make for some really dark clouds on the horizon.

It will be interesting to see how far prices drop, and whether and how much that drop may be stimulative.

32 posted on 06/11/2012 10:28:21 PM PDT by rottndog (Be Prepared....for what's coming AFTER America...)
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To: SeaHawkFan
Oil prices should be at about $30-40 if drilling was expanded.

Nope. With the technology that led to the increase in onshore production and the extra hoops offshore drilling has to go through, the cost of drilling a well has gone up considerably. Figure $10 million from spud to completion for a Bakken horizontal well, and if oil drops below sixty dollars (considered break-even--NO profit), expect only enough drilling to hold leases by production, not full development.

Right now transportation costs have to be factored in as well, considering there still isn't enough pipeline capacity to get the oil to refineries, and that helps keep the price of refined products up as well.

33 posted on 06/11/2012 10:33:02 PM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: GGpaX4DumpedTea
Realistically, $10 a barrel is a fair price on the low side, and maybe $15 a barrel on the high side. And $1 a gallon for gasoline should be max.

Yeah. When a new full-sized Lincoln costs $6,000 again.

34 posted on 06/11/2012 10:36:29 PM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: jyro

I doubt such propaganda will yield much in the way of tourists recirculating the debt. Highways are relatively very quiet this summer, though not nearly as quiet as they’ll be after the bond collapse. The bond bubble situation is interesting to watch, though, as so much foreign debt is chased into our treasuries with baloney.

Without the big manufacturing base that we’re missing, the artificially, internationally propped dollar is going to eventually slap the economy down hard.


35 posted on 06/11/2012 10:55:09 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: re_nortex

36 posted on 06/11/2012 10:55:38 PM PDT by Doe Eyes
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To: re_nortex

37 posted on 06/11/2012 10:55:54 PM PDT by Doe Eyes
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To: lurk

If that.


38 posted on 06/11/2012 11:26:39 PM PDT by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: jyro

Under Obama we have seen Drilling is the USA almost halted, Oil Production has been reduced to a trickle, Oil prices have done nothing but increase and the American Oil industry Devastated.

39 posted on 06/12/2012 12:57:06 AM PDT by Uncle Slayton
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To: jyro

$3.78 here in Burlington, VT


40 posted on 06/12/2012 4:46:48 AM PDT by Conservative Vermont Vet (l)
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To: Sequoyah101
In the last year crude oil has dropped about 25% from the high while gasoline has dropped only 10%.

Gas didn't climb as much as oil, why do you expect it to drop as much as oil?


41 posted on 06/12/2012 4:53:22 AM PDT by thackney (life is fragile, handle with prayer)
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To: mylife
Here in Texas Gas has gone down like 5c when oil is down $20 a barrel


42 posted on 06/12/2012 4:55:32 AM PDT by thackney (life is fragile, handle with prayer)
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To: Smokin' Joe; Doe Eyes; thackney; rottndog; Fledermaus; GGpaX4DumpedTea; spokeshave; Doogle; ...

Good information Joe, and I agree with your analysts in general, but what is your opinion, or anyone else who may know, about the pump prices when you take into account that the last new refinery built in the United States was Marathan Ashland’s in Garyville, La. It was completed in 1976.

Now take into consideration that the US population in 1976 was only 218 million, yet as of today June 1, 2012, the population is 313 million. That is 100 million, or 43% more Americans. All things being equal in comparison, that means we have about 43% more of almost every category of people living today. 43% more babies, 43% more college students, 43% more families etc. etc. etc.

However, most importantly, that means 43% or more cars being driven. Think about that, 43% more Americans that need to be transported around than we did in 1976, yet we are supplying gasoline for those vehicles with the same amount of refineries as we did in 1976.

Oh and do not tell me we need Mass transit, it will never work in America.

(Plus, that does not include the 15 to 25 million illegals driving around causing hell.)

Now add in the fact that almost every state has numerous grades of gasoline mandated by different state statutes, it does seem to point to a very limited supply of gasoline for us. Even when you consider the current output in oil production. The way I see it, we could pump a trillion barrels of oil a day, but if we do not start building more refineries, the pump prices will never get back to below $2.00 a gallon.

Does anyone have information concerning the correlation between pump prices and refinery petroleum production vs the correlation between pump prices and oil production?

Seems to me the lack of refineries is actually a bigger problem than the lack of oil production. Am I wrong?


43 posted on 06/12/2012 2:48:36 PM PDT by OneVike (I'm just a Christian waiting to go home)
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To: OneVike
seems to me the lack of refineries is actually a bigger problem than the lack of oil production. Am I wrong?

There is no refinery shortage. We refine more petroleum products, including gasoline and diesel, than we consume within the US.

We have not built a new refinery lately, but we have been upgrading and expanding the existing refineries, connected to the existing pipelines for crude and products, for decades.

Petroleum Product demand (not including natural gas liquids.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTPUPUS2&f=M

Refinery Capacity
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MOCLEUS2&f=M

Refinery operations
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MOCGGUS2&f=M

The result of this surplus capacity, we import more crude oil than we need, and export surplus refined product, helping the trade balance, keeping some available surplus available and more jobs in the US.

44 posted on 06/12/2012 3:20:44 PM PDT by thackney (life is fragile, handle with prayer)
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To: OneVike
Does anyone have information concerning the correlation between pump prices and refinery petroleum production vs the correlation between pump prices and oil production?

The data is available at the link below. If you need help digging through the data I will answer questions. You won't find a direct comparison, but the tables are available for all the data sets you describe.

http://www.eia.gov/petroleum/data.cfm

You won't find a correlation to production, because the production rates don't change quickly or much at all month to month (in total).

You will find a better but not exact match of gasoline to crude oil price. Crude oil moves more volatilly and more frequently and higher movements. But they trend together.


45 posted on 06/12/2012 3:29:38 PM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
Thanks for the links. Just one more question before I delve into all the new info my head will be absorbing.

If the number of refineries does not effect the price at the pump as much as I think because you say we have enough refineries already, then why is it every time an accident happens at a refinery that forces them to shut down production those of us in the distribution area for the petrol coming from that refinery are forced to endure higher prices.

If, as you say, we have enough refineries, then a plant shutdown, or the many changes they make every Spring and Fall for different grade petrol, should not effect the price like it always does.

In California at least, they keep attempting to build new refineries or even enlarge the existing ones, just to have the left stop them via lawsuits, liberal judges, and the EPA. They are having a tough time in California just upgrading and maintaining the ones that exist.

46 posted on 06/12/2012 8:26:51 PM PDT by OneVike (I'm just a Christian waiting to go home)
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To: OneVike; thackney
However, most importantly, that means 43% or more cars being driven. Think about that, 43% more Americans that need to be transported around than we did in 1976, yet we are supplying gasoline for those vehicles with the same amount of refineries as we did in 1976.

I have thought about it. In 1976, for instance, one of the Muscle/luxury cars was the Olds Toronado which got a whopping 4 MPG in town. Otherwise, 16-17 MPG was considered good, in fact real good, and twenty miles to a gallon was reserved for little critters like Fiat 600s and Volkswagons, and on this side of the pond, the Vega and the Pinto. (I drove or rode in all 4 of those.) Now, though, after CAFE standards and revisions, and computerizing automobiles to the point where few shadetree mechanics can do much with them, 20 MPG is more the norm for a sedan, the new classes (compared to 1976) of Minivans and SUVs generally do as well or better than full sized cars used to (15-20 MPG), and a significant portion of the vehicle market has shifted to diesel (more on that in a minute).

So more vehicles are getting farther on less fuel.

Keep in mind, it isn't just the number of cars, but the miles they are being driven, and the Obama economy has an effect with far fewer people commuting to work.

In addition, those driving on diesel, are driving on a fuel more easily produced (before additives) than gasoline: diesel is a distillate, and a functional diesel fuel can be cooked out of crude oil with only a topping facility. There was a plan to build one of those in Western ND, send the light fraction of the crude one way (napthalenes), the heavy fraction in another direction, both as refinery and/or chemical plant feedstocks, and use the diesel locally. So diesel takes a fraction of the refinery plumbing and processes that gasoline does, fewer blends are needed, and less infrastructure. More diesel vehicles (especially light vehicles which get good mileage) means less gasoline to produce, too.

Another factor is that as much as 10% of the gasoline out there isn't gasoline, but ethanol, which is blended fairly close to point of sale because of its hygroscopic (water absorbing) nature, corrosion problems it would create in pipelines, etc.

Existing refineries have been expanded, which makes more sense than building separate new facilities as existing transportation hubs and infrastructure already go there. The bottleneck comes when there isn't enough capacity in the system as new sources of supply are found, which is why the Keystone pipeline was important, not only for Canadian producers, but for American ones, too, who would have been able t take advantage of some of the excess capacity.

Oh and do not tell me we need Mass transit, it will never work in America.

Don't worry, I live in North Dakota. There are places along coastal urban corridors where it might provide a means to move some of the population, house homeless, and nurture criminal activity, but not here. We do have Amtrack going through, but you can't get there from here, and require connecting changeovers to go someplace. I won't do the TSA grope thingy, and the nearest bus station is in another state. Fuhgeddaboutit.

We drive.

One thing you left out, though, is that pump prices have to support the refits refineries have had to undergo to remain compliant with ongoing moving-target EPA regulations. People who support those regulations and then complain that gas is "expensive" shot themselves in the foot. Unfortunately, we all have to suffer a bit for that.

Quick recap: Prices are the result of many factors, among them:

Multiple blends tailored toward specific areas.

Drilling costs on the rise which is reflected in refinery bid, and if it isn't, drilling will slow down and eventually stop (which will cause the price to go back up as supply drops).

Moving target regulatory standards imposed by the EPA.

Ethanol blending, and ethanol prices.

Transportation costs (the trucks and trains have to buy fuel, too).

Does anyone have information concerning the correlation between pump prices and refinery petroleum production vs the correlation between pump prices and oil production?

Thackney probably does, if anyone has those handy.

Seems to me the lack of refineries is actually a bigger problem than the lack of oil production. Am I wrong?

Believe it or not, we are exporting some refined products. Prices are set by bid in that market, too, like any of the other traded commodities. They then go down the wholesaler to retailer chain, and the retailer only makes enough from a load of gasoline to buy the next one, plus a very small profit. If it wasn't for the convenience store, or in (nowadays, more rarely) the service bays and towing, a lot of them would not be able to make it on just fuel sales.

47 posted on 06/12/2012 11:25:19 PM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: OneVike

The US in total has enough refineries to more than meet our demand.

Individual area have more or often less than the local demand. There is not surplus pipeline capacity and extra pipeline miles to shift production from one normal area of distribution to another when there are major extended unplanned refinery shutdowns.


48 posted on 06/13/2012 4:37:12 AM PDT by thackney (life is fragile, handle with prayer)
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To: Smokin' Joe; thackney

Thanks, you both have done an admirable job of educating me on this sector.

I have a brother-in-law who is in ND working in the field right now. He runs the computer system that controls the fracking drill. He is a huge supporter of natural gas. I talk to him from time to time, and I have learned a lot about the way fracking works.

I don’t get much time to talk to him, because when he does get a chance to call he and my wife (his sister) will talk for an hour about family matters, but when I get a chance to talk to him I pump him for as much information as he can offer from his vantage point in the industry.

He has been in the field so much that he rarely has time to contact us. He was asked to move to ND, but he would rather stay in Wyoming and travel as needed. In his zeal to make as much as he can to hedge against future slowdowns that inevitably always happen, he hasn’t taken any vacation time in over two years. He will take someones shift in a heartbeat, so the overtime pay he makes is very good.

It helps that he’s a bachelor, so all his money he is raking in, he has been averaging well over $100.000 the last two years, belongs to him and him alone. It has enabled him to almost paid off the spread and home he purchased in Wyoming back a few years ago.

Well thanks again you two. I now know more than I did before, and that is always a good thing.


49 posted on 06/13/2012 8:32:19 AM PDT by OneVike (I'm just a Christian waiting to go home)
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To: thackney

You can probably answer this: Why don’t they build refineries closer to the supply i.e. the need for the Keystone and other pipelines?


50 posted on 06/13/2012 12:38:47 PM PDT by Fledermaus (Democrats are dangerous and evil. Republicans are just useless and useful idiots.)
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