400 Billion Barrels in North Dakota

[storch]

But we need to diip into our reserves of dollars in order to do so much longer, and that well is drying up.

  google zeitgeist the federal reserve

[Charon]

What is the extraction price on a barrel of Saudi crude by comparison? How much of that oil can be extracted at $20 vs $40? will it be 175 billion bbls or 400 billion bbls? (either would be fine if costs are low) What happens if the price of crude drops below $20 for a decade? If you believe that $50+ crude is here to stay then it makes sense. The oil companies would be drilling the hell out of it. But, history suggests that will not be the case. That's why those tar sands projects were so slow to start and offer a notable degree of risk for those investing in the projects.

We are not running out of oil any time soon. We are not even running out of cheap oil any time soon. That's why investing in expensive oil is risky for now. Just like the deep reserves in the Gulf of Mexico, and Tar sands and Oil Shale.

BTW, the cost to extract Saudi crude is about $5 per bbl., with average world costs at about $9 bbl. Those are the economics you have to compete with to succeed.
 
Charon

[Charon]

Belive it or not, it's sadly true. Gas should be alot cheaper, but after Katrina, the oil companies used it as a way to make more money. It's a worse scam than cigarettes. Atleast the surgeon general warning says you can die. No gas says "You may and probably will get ripped off with this 3$$ gas"

It's simply amazing how the oil companies just learned how to do that. And do it without getting caught in several major FTC investigations. And especially since oil is a commodity whose price is set in various financial markets throughout the world based upon supply and demand, just like corn or oranges. Remarkable how they had so little influence for those long periods in the 1990s for example, when crude was at $10 to $15 per bbl and you couldn't find much of a profit in the sector or generate much interest in investment compared to just about anything else.

Charon

[DiabloTX]

It'll be a great day when Big Oil finally has made it to the promised land of total profit and everyone that needs their commodity has gone out of business and Big Oil is left with...no demand.

[storch]

if it weren't for standard oil of ohio we wouldn't have the east coast of florida developed in the late 19th century and early 20th century.  I like big oil I like that they profit and I hope they continue to profit.  when i cruise by st. johns later I'll light a candle for big oil and i hope that candle is made from petroleum products.

[Nilsen]

Everybody is holding back production of oil for various reasons. They may be enviromental, strategic, political or economical. Its a good deal for everyone really.

[Rino]

When will people understand that profit is a function of price AND quantity?  Not to mention that the profit these companies make PER gallon of gas is roughly 8-9 cents.  These companies can still tack on 8-9 cents per gallon for profit at a price of 1.50.


Conversely, the Government makes in taxes on average 40-42 cents per gallon.  Yup, that's right.  The government is making 4-5x the amount per gallon that the "Evil" oil companies are.  Who's the greedy thieving bastards now?

     If the oil companies make the same profit per gallon, how do you explain the massive increase in their profits the last couple years?
We are using 50% more gasoline?  I call BS.

[JB88]

the other thing few want to understand is that we will use up all of the planets known reserves in other parts of the globe before we dip into our own.

true story.

[Furball]

Everybody is holding back production of oil for various reasons. They may be enviromental, strategic, political or economical. Its a good deal for everyone really.

Except for former, and soon to be current goat herders

[bj229r]

Ahhh....spring.....grass growing, leaves popping out, congress grilling evil oil executives


(perhaps if ANY of them went to business school instead of law school, they might understand why prices are so high....NAHHHH....it's the evil oil bastids)

[wrongwayric]

Old news. I heard about this 4 years ago. Just because you have a large amount of a raw product, oil, isn't going to make the price go down. Until we build more and new refineries in the U.S. the price will stay up and probably go higher. We pump the oil up and no place to refine it so now we have to ship it, cost, export tax, cost, refining, cost, import tax, cost, storage and transportation to the pumps, cost, taxes, more cost. It's the to many fingers in the pie deal. Until we have a reliable system of production, refineing and distribution of an energy source here in the U.S. we are basically hostages to big oil and our own government.

[storch]

some conspiracy theorists claim that we are purchasing crude and pumping it back into depleted wells all over the country.

at the same time there are other theories that claim that crude is a by-product of naturally occuring processes deep in the planet's core and that the wells we pumped out are slowly filling themselves thus ensuring a cheap energy source until the solar system is kaput.

[Charon]

If the oil companies make the same profit per gallon, how do you explain the massive increase in their profits the last couple years?
We are using 50% more gasoline?  I call BS.

The major oil companies don't make their money selling gasoline. In fact, they are running as fast as they can away from what little involvement they currently have in selling and even marketing/distributing gasoline at the retail level. Not worth the effort and they lack the entrepreneurial efficiency to excel on the street. The people actually selling gasoline (petroleum retailers/dealers) haven't made much on it for over a decade. The middle distributors (petroleum marketers) do somewhat better, but it's noting that great.

In the middle, refiners are doing OK now, but there is a lot of overhead and a long history of mediocre profits. The major integrated oil companies are not that big on refining either, given it comparatively low ROI.

The major integrated oil companies make their money facilitating the production (in many cases) and distribution of crude to meet world demand. Because there is much more demand in the past decade than ready production the price is high. Spikes occur based upon world politics and rumor (as with all markets) and likely to some artificial extent based upon speculation in the markets. As noted, $30 per bbl today comes from the devalued dollar. Every barrel produced is sold, and sold at market prices. Market price is very high and they are selling far more barrels = record profits, for now. The FTC has established no manipulation of the process, but... The oil producing countries can, ahve and do manipulate and are currently making a killing with their nationalized oil companies (basically controlling the oil rights and in many cases initial production). They are likely manipulating production as they long have, but the current oil shock in general it has been, at least initially, a reasonably honest demand driven crunch.

However, contrary to popular opinion, oil/refined products demand is not inelastic. A few percent swing in demand and all of the profits, and high prices as well, flush away as quickly as they rose and could easily stay there for a  half decade or more -- as is histroically established. Again, not because the oil companies decide -- hey, lets tank our profits and screw our shareholders for 5 - 10 years for poops and giggles -- but because market conditions shift and that's the new reality.

Charon

[Reschke]

Don't forget that the US and state governments have mandated via the EPA all these different fuel blends for different regions of the country to make sure that we don't pollute that much. However if they were to be forced into one type of fuel instead of approximate 50 different blends that are produced now.

The following link is from a brief I read back in December of 2007.

http://www.ncpa.org/pub/ba/ba603/

[Maverick]

I assume folks do realize the impact of the price of crude at over $100.00 a barrel just might have some bearing on the price at the pump. About 4+ years ago the price per barrel was averaging $50 to $55. At that time the price of diesel was about $1.50 a gallon, this is pre EPA regulation BS regarding that particular fuel.

As far as taxes on the fuel are concerned this info was taken from the MSN today site by a buddy of mine. I didn't find the chart myself so I can't link it, however it does agree with the same info I was aware of some time back. Taxes paid at the pump are based on a per gallon rate, not at the price per gallon rate. This is the state taxes added to the price of gas only. There may be additional sales taxes added by local jurisdictions. Please note that the people's republik of kalifornia has the lead.

Sales Gas/gal.
Alabama 4.0% $0.20
Alaska none $0.08
Arizona 5.6%* $0.19
Arkansas 6.0% $0.22
California 7.3% $0.46
Colorado 2.9% $0.22
Connecticut 6.0% $0.44
Delaware none* $0.23
Florida 6.0% $0.33
Georgia 4.0% $0.26
Hawaii 4%* $0.33
Idaho 6.0% $0.25
Illinois 6.3% $0.40
Indiana 6.0% $0.32
Iowa 5.0% $0.22
Kansas 5.3% $0.25
Kentucky 6%* $0.19
Louisiana 4.0% $0.20
Maine 5.0% $0.29
Maryland 6.0% $0.24
Massachusetts 5.0% $0.24
Michigan 6.0% $0.36
Minnesota 6.5% $0.22
Mississippi 7.0% $0.19
Missouri 4.2% $0.18
Montana none $0.28
Nebraska 5.5% $0.24
Nevada 6.5% $0.33
New Hampshire none* $0.20
New Jersey 7.0% $0.15
New Mexico 5.0% $0.18
New York 4.0% $0.41
N. Carolina 4.3% $0.30
N. Dakota 5.0% $0.23
Ohio 5.5%* $0.28
Oklahoma 4.5% $0.17
Oregon none $0.25
Pennsylvania 6.0% $0.32
Rhode Island 7.0% $0.31
S. Carolina 6.0% $0.17
S. Dakota 4.0% $0.24
Tennessee 7.0% $0.21
Texas 6.25%* $0.20
Utah 4.7% $0.25
Vermont 6.0% $0.20
Virginia 5.0% $0.20
Washington 6.5%* $0.36
West Virginia 6.0% $0.32
Wisconsin 5.0% $0.33
Wyoming 4.0% $0.14