Major Alaskan Oil Field Shutting Down

And the price at the pump went up four cents this morning. Here we go again. BP's problem is a new excuse we haven't heard before. What will it take for our leaders to get their collective heads out of their collective a$$es?

I saw a show on the history channel they said that the Alaskan Pipeline was 30 years old already and that it was only built to last 20 years.

Someone at DU has already said it.

So has someone on FR (or something to that effect).

I'm aware of the refining bottleneck. There is approx. 100,000 BOPD throughput around here, and with the onset of tar sand production up north, there is not enough capacity to carry all the oil from here and there. The local 35 grav API crude (sweet), is being heavily discounted as a result.

This thread explains the problem better.

"Someone at DU has already said it."

Of course here at FR we all know that large corporations are completely pure and honest and always act in the best interest of the customer.

PS -- I don't actually believe the line is being shut down to squeeze out more money.

This is what happens when you have giant monopolies that band together and control prices.

You end up with no competition and uncontrolled greed.

Once they find out they can get away with it and the money starts rolling in they lose all self control until they destroy themselves.

The shame is all the people and businesses they hurt or destroy because they cannot get the energy they need at a stable price, before they are stopped or before they destroy themselves.

If they are not stopped they are going to hurt this country to a degree that is going to remind people of what happened with the collapse of the Soviet Union.

They are not only going to hurt themselves they are going to price the entire country out of business.

This one will be rightfully laid at the feet of President Bush and the Republican Party.

They are not only going to hurt themselves they are going to price the entire country out of business

I guess it is hard for non-market oriented people to understand the concept of how oil is priced. The oil companies have zippy D'dooDaa to do with the high prices or the daily meanderings of gas and oil pricing.

The free market mechanisms do this and do it effectively based on supply and demand.

Traders set the price according to stocks on hand factored into future needs and availability.

Big oil does not set the price of the product, and the only place they can have any control is at the retail level where they can, if they are into a self destruction trip, raise the retail price of gas at stations they own to a level exceeding the market price.

This will of course, cause their sales to plummet and go to a compeditor, as well as a great loss at the bottom line.

The market sets the price.

You are correct to a certain degree in that free markets do somewhat influence the price of a product.

In a free market it is not only supply and demand that sets the price but the major control element that everyone forgets is competition.

Without competition you do not have a free market.

I may not understand the market but I'm sixty years old and have been somewhat successful in my life.

One thing I do understand is when I'm being fed a steady stream of crap by big business salesmen who will lie to get your money and their bought a paid for politicians who will lie to help them .

You say that the oil companies have zip to do with the prices. Well you may know something about markets but you know next to nothing about business.

All businesses set the price of their products or services all of them they have to.

As for the supply it has been said repeatedly since theses price increases started after the Republicans took control of the White House there have been no shortages there's even talk of a glut building maybe that's why they are shutting down the pipeline.

People have been able to get all the gas they need without waiting in lines if they had the money.

I'll tell you something else I know. Anyone who is happy or supporting this price gouging by the oil companies and happy about paying three times what they where for gas, the increases in heating and cooling,the prices increases of food, clothing, and ever thing else caused by rising energy cost are either, profiting from the increase in some way, totally brainwashed, or stupid.

If it keeps on most everyone is going to get hurt by it in someway sooner or later even those that are fattening their pocket books by investing.

They are going to wake up one morning and find that roll of toilet paper they so desperately need costs $20 a roll and that it's cheaper to wipe with two fives.

They have let all these big businesses [not just oil] get together to create giant corporate monopolies and they are going to get out of control and pick people's pockets, eliminate our borders, destroy our wage base, lower our standard of living and turn this once great country into a welfare state or Tijuana North.

I am certainly not pleased with the high price of oil. But you cannot blame big oil for it and you cannot blame anyone you could potentially put a ass whipping on.

New oil discoveries have declined and are no longer keeping up with demand. About 20 to 30 percent or more of the increases are due to geopolitical activities and expectations. Add to this the occasional seasonal storm and spikes in demand Therefore the value of oil has skyrocketed to all time highs and will be continuing to move in the up direction. The price of oil has a limit, and that limit is what people and governments will pay for it.

It is the same with gemstones, gold and any other substance of value. I don't hear people holler and blame the diamond mines when a stone price goes up! Or gold, or silver, or my favorite, which is platinum.

Oil has other interesting trading glitches like fungibility. They pull it out of the ground and it is all pooled together by grade. It stays pooled together through refining to the gas distributer where additives are added for value addition. In one tankful of gas you potentially have oil from 50 different countries.

Nobody controls the price of oil.

Nobody but the traders and they only try to predict the future. Refiners and distribution take their fair margins, and yes, the big oil companies who have distribution, refining and production, are currently getting rich, but they were in the tank, only 10-15 years ago. They had been in the tank since the late seventies, and periods of time before that when the market price did not cover the expenses.

I worked for the oil patch for a while in the early eighties. I lost my house and everything when the price fell to 10-12 bucks per barrel by 1985. Everybody went bust, but people did not care because the price of gas was .86 cents. They did not care the the oil companies were going broke and the rigs were parked because they could not make payroll.

Nobody cared because we simply bought more gas and it was plentiful.

Plentiful until now. Cheap until now.

But in the next months and years you will be remarking how cheap it was at 3.00 per gallon, and at some point, it will be too expensive to use. At this point in time, it will become plentiful again because supplies will exceed demands.

You can't do anything about this. Nothing at all. It is not something that is controlled.....It is only talked about.