Posted on 02/26/2008 4:30:47 PM PST by reaganator
Gasoline is $3.19 here in Ohio today. Is anyone fighting to lower the over reaching, restrictions on production. Is there any hope for the abilty to manufacture gasoline to dramatcally increase in the near future?
If the answer is nothing, what then?
Okay, Mexico could be a bad risk for a multi-billion dollar refinery.
That still leaves Canada, Bermuda, the Bahamas, Jamiaca, Trinidad and Tobago, etc, etc, etc.
True, they are islands in the Caribbean - and hurricanes love the Caribbean, but hurricanes also love the gulf coast - where we have many refineries already.
Heck, Recife in Brazil would be a great refinery point. No hurricanes, a big port, and a short hop straight north to our ports in Florida (or Mississippi, or Georgia, or Alabama).
I mean, we are already importing gasoline from European refineries because the US cannot produce enough from our own. At least this way, our money would stay with our own companies in America.
I could not agree more.
Why should they increase production when all they have to do is increase the price?
Your answer is technically true only if prices are high and usage restrained. Supply and demand have reached equilibrium with gas prices over $3.00 per gallon and oil over $100. Absent an increase in supply or reduction in demand (a global recession), both of those levels will increase. Increase supply by 10% and the price would drop dramatically. The only time you could say supply is not the reason is when gas is unsold at a price below the cost of production.
Open exploration and drilling in Alaska, the Pacific coast and the gulf and the speculative pressure on oil will be released and the price of oil will drop by as much as 30% or more.
Reduce the restrictions on newly constructed refineries and it will reduce the overhead costs of production while increasing supply. The cost of gasoline will drop.
Increase the use of nuclear plants and the usage of oil for heating and electrical production will fall, increasing the availability of fuel oil for transportation.
Congress has not done one single thing that doesn't amount to an increased cost of production. Until they lift their boot from the neck of the system, prices will remain high and go higher. The laws of economics guarantee that.
That is a ridiculous statement.
Apparently you lap up the media line for breakfast every morning. Those record profits amount to $0.08 per dollar invested. The company (non-energy related) I work for would consider that a very bad year if that was as good as they could do. The huge profit numbers are because the business is so large, not because they they are getting a high return on investment. Take time to do the math once if you can stand having your world view shattered by the truth.
Increase their availability to oil, reduce restriction on new refinery construction and the overhead costs go down. They could make more per dollar invested than under the current highly restricted environment.
Over the past 15 years, there has not been a thing done in the US to promote an increase in supply while regulation after regulation have been implimented to restrict it. Now they are talking about a windfall profits tax. This only increases the cost of production and will come out of the consumers pocket. Idiocy!!!!
Prices are always a result of supply and demand, regardless of what creates the supply abundance or restriction. The laws of economics are laws, not suggestions. If gasoline were $1.80 per gallon the consumption in the country would increase dramatically, so there would not be a storage problem.
The supply available today is sufficient to meet a demand that is constrained by high price. Reduce the price and demand goes up, however the supply would not be able to meet the demand. Therefore the price does not go down.
What are you going to do with 2 million extra barrels of oil every day? In a week there would be 14 million extra barrels of oil. Where will you put it? That's just for the USA of course. The world is 4X that and the USA is not the whole economic situation and nowhere near being self-sufficent nor capable of being so.
There is intelligent life out there. Thank you for the blast of sanity!
Economics is not a science. There are no laws of economics.
IMHO, this country will rue the day this approach to supply and demand was implemented for important products subject to critical interruptions brought about by unforeseen events.
The supply of oil is restricted because the US has some of the largest oil reserves in the world with the most advanced technology to harvest it and congress won't allow it to happen.
On the refinery side, the only increases in supply have resulted by improved efficiency at existing refineries and by running refineries and 90%+ of capacity. Production facilities should never be run continuously over 80% of capacity.
No new refineries are being built because of environmental restrictions. The overhead cost is too high. Every attempt by congress to relieve the restricitons are at least make them more logical and doable has been blocked by the Democrats.
Gas prices are high becasue Democrats want them high!
The price was $2 a gallon not long ago and demand didn’t outstrip supply. What is outstripped is that simplistic supply/demand diagram.
An example of media propoganda. Do the math. Take the price of an Exxon share times the number of shares outstanding. This gives you the total investment Exxon has. Then divide the profit number by the total investment. The net result is Exxon made $0.08 for every dollar invested. That is hardly a mind blowing number. The size of the profit total is so large because Exxon is huge, not because they are making a bundle per dollar invested. There are technology companies the make 25 - 30% profit per dollar invested an nobody screams about their obscene profits.
Sell it. What else? The US economy could absorb that without even a twitch if the price was right.
What planet our you living on? Following Katrina and Rita, US refineries were running at what amounted to over 100% of capacity just to meet the demand. However, apparrenly on your planet, supply and demand along with the other laws of economics don't apply. That's fine, if you are happy out there in La la Land, more power to you. There is no point in me or any other rational being disturbing your world view.
LOL
Because that is about the most ignorant statement I've read on FR...in a long while.
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