Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Holden McGroin on April 01, 2008, 07:57:31 PM
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Maybe...
America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant.
In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel.
It was not until 2007, when EOG Resources of Texas started a frenzy when they drilled a single well in Parshal N.D. that is expected to yield 700,000 barrels of oil that real excitement and money started to flow in North Dakota. Marathon Oil is investing $1.5 billion and drilling 300 new wells in what is expected to be one of the greatest booms in Oil discovery since Oil was discovered in Saudi Arabia in 1938.
The US imported about 14 million barrels of Oil per day in 2007 , which means US consumers sent about $340 Billion Dollars over seas building palaces in Dubai and propping up unfriendly regimes around the World, if 200 billion barrels of oil at $90 a barrel are recovered in the high plains the added wealth to the US economy would be $18 Trillion Dollars which would go a long way in stabilizing the US trade deficit and could cut the cost of oil in half in the long run.
Saudi Arabia has an estimated 300 Billion barrels in reserves.
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You know, I almost fell for it...visions of $.85 per gallon dancing through my head...then I realised it's April 1st.
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You know, I almost fell for it...visions of $.85 per gallon dancing through my head...then I realised it's April 1st.
Story came out last week.
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You know, I almost fell for it...visions of $.85 per gallon dancing through my head...then I realised it's April 1st.
http://www.canada.com/saskatoonstarphoenix/news/local/story.html?id=5f07f6b9-815f-4058-9e25-17fb0c61cd61
http://www.bismarcktribune.com/articles/2006/06/20/news/state/doc4497e42f6e8e5430204114.txt
looks legit.
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Hmmm...Bismarck Tribune article is nearly 2 years old.
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You know, I almost fell for it...visions of $.85 per gallon dancing through my head.
It will never happen, the oil companies won't allow it. They'd be shooting themselves in the foot if they did, they'd never be able to afford their private jets, trips to Monte Carlo each Spring or gifts for their mistresses and bastard children.
ack-ack
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When will people understand that profit is a function of price AND quantity? Not to mention that the profit these companies make PER gallon of gas is roughly 8-9 cents. These companies can still tack on 8-9 cents per gallon for profit at a price of 1.50.
Conversely, the Government makes in taxes on average 40-42 cents per gallon. Yup, that's right. The government is making 4-5x the amount per gallon that the "Evil" oil companies are. Who's the greedy thieving bastards now?
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When will people understand that profit is a function of price AND quantity? Not to mention that the profit these companies make PER gallon of gas is roughly 8-9 cents. These companies can still tack on 8-9 cents per gallon for profit at a price of 1.50.
Conversely, the Government makes in taxes on average 40-42 cents per gallon. Yup, that's right. The government is making 4-5x the amount per gallon that the "Evil" oil companies are. Who's the greedy thieving bastards now?
So few people actually realize this...
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Apperantly, this is nothing new. http://www.undeerc.org/price/TextVersion.pdf (http://www.undeerc.org/price/TextVersion.pdf)
First exploration/research was in 1974.
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Well, hell then...$.85 a gallon gas here we come!!!!!!
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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.
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You know, I almost fell for it...visions of $.85 per gallon dancing through my head...then I realised it's April 1st.
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"
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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?
I believe most people would say that profit is a function of Overhead vs. Price. Price and quantity is a strategy, not the actual function of profit.
BTW, 'Overhead' includes all costs' of a product from cradle-to-sale, so to speak.
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It will never happen, the oil companies won't allow it. They'd be shooting themselves in the foot if they did, they'd never be able to afford their private jets, trips to Monte Carlo each Spring or gifts for their mistresses and bastard children.
ack-ack
:rofl
:rock
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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.
But we need to diip into our reserves of dollars in order to do so much longer, and that well is drying up.
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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
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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
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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
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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.
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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.
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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.
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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.
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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.
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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
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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)
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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.
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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.
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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
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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/
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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
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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.
If from this domestic resource our cost is say $80 / bbl sent to somebody from Bismark ND, who spends his huge amounts of profit in say, America, and every barrel produced reduces the need to send the money to the middle east or Venezuela. You can tax it all you want, the taxes are collected by Americans. If the present refining capacity is used up by a domestic crude, all the better. Big oil can refine and distribute and profit off American resource, and big fat cats in Houston can build mansions in Houston, hiring local carpenters, and buying local concrete to make huge cement ponds... they can spend their windfall profits in say, America.
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This is typical Liberalism, they drag the Gas Co. into congress to wage their collective fingers, then make statements like this.
CHEYENNE, Wyo. - Wyoming Gov. Dave Freudenthal, a former Clinton administration appointee, announced Wednesday that he will support Illinois Sen. Barack Obama for the Democratic presidential nomination……
The governor also said Obama gave him an honest answer about putting the Wyoming Range in western Wyoming off-limits to oil and gas drilling, something Freudenthal would like to see the U.S. Senate approve.
http://news.yahoo.com/s/ap/20080402/ap_on_el_pr/obama_endorsement (http://news.yahoo.com/s/ap/20080402/ap_on_el_pr/obama_endorsement)
hay cuddlinghunk, reducing supply will increase prices. When the Gas Co. turn a 200B profit the next year you can drag them in for another talk.
How about dragging in an economist first. :rolleyes:
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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.
Good point. I believe China is doing the same. IIRC, China is sitting on a pretty good sized oil patch. They are going to tap that last.
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take the bus to work, just like the poor people.
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Holden
Ever since I got Windows Vista, those RSS news feeds come up on my screen. I rather like having it there!
The amount of oil present under ND, according to MSNBC is 4.3bn barrels, not 400bn. So you were a couple of decimal places out. MSNBC link : http://www.msnbc.msn.com/id/24057222/
At the current rate of consumption, 4.3bn barrels is enough to last the US about 7 months.
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Brakken is shale oil, not crude. It's more expensive to process, which means oil prices have to be higher to make it worth gong after.
Besides, if the US substantially increases oil production, OPEC will just decrease their's so they keep supply:demand and price where they want it. In technical economic terms it's what's known as having you by the short hairs.
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Brakken is shale oil, not crude. It's more expensive to process, which means oil prices have to be higher to make it worth gong after.
Besides, if the US substantially increases oil production, OPEC will just decrease their's so they keep supply:demand and price where they want it. In technical economic terms it's what's known as having you by the short hairs.
So if you grow your own tomatoes, independant of ther farmer or the supermarket, why does the market price of tomatoes worry you?
And Napolean:
A landmark paper by Dow and a companion paper by Williams (1974) recognized the Bakken as
a tremendous source for the oil produced in the Williston Basin. These papers suggested that the
Bakken was capable of generating 10 billion barrels of oil (BBbls). Webster (1982, 1984) as part
of a Master’s Thesis at the University of North Dakota further sampled and analyzed the Bakken
and calculated hydrocarbon generation capacities to be about 92 BBbls. This data was updated
by Schmoker and Hester (1983) who estimated that the Bakken was capable of generating 132
BBbls of oil in North Dakota and Montana. Price (unpublished) used a more complete database
and estimated that the Bakken was capable of generating between 271 and 503 BBbls of oil with
an average of 413 BBbls. New estimates of the amount of hydrocarbons generated by the Bakken
were presented by Meissner and Banks (2000) and by Flannery and Kraus (2006). The first of
these papers tested a newly developed computer model with existing Bakken data to estimate
generated oil of 32 BBbls. The second paper used a more sophisticated computer program with
extensive data input supplied by the ND Geological Survey and Oil and Gas Division. Early
numbers generated from this information placed the value at 200 BBbls later revised to 300
BBbls when the paper was presented in 2006.
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couple of things should jump out at people...
the same scientists who claim that they know how the globes climate works.. can't even tell us how much oil we have or confirm any deposits.
Not only that but they don't even really know how it came about.. no.. worse.. they don't even know if it is replenishing itself.
You could take nelsons view tho.. that no matter what.. suffering is good.
lazs
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One thing you're unlikely to hear the wealthier greenies demanding is energy rationing. High prices don't bother them nearly as much as it does those just getting by. If everyone were limited to a specific and reduced amount of energy consumption without regard to their situation I bet the drilling restrictions and the focus on reducing c02 would all but disappear overnight.
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Oh I think the oil companies would have a pretty good idea of exactly how much oil is down there. Whether they disclose that to you or me is another matter, but don't confuse the two! They might try to hide the fact, to keep the price high, but as we can see, the oil companies are doing very nicely, and they didn't get that way by drilling where there's no oil. They will have done their own seismic exploration to assess the exploration prospects.
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Oh I think the oil companies would have a pretty good idea of exactly how much oil is down there. Whether they disclose that to you or me is another matter, but don't confuse the two! They might try to hide the fact, to keep the price high, but as we can see, the oil companies are doing very nicely, and they didn't get that way by drilling where there's no oil. They will have done their own seismic exploration to assess the exploration prospects.
What would it matter? They're not allowed to drill in any new places, and they are all but not allowed to build new refineries. Did you know we actually IMPORT gasoline?
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What would it matter? They're not allowed to drill in any new places, and they are all but not allowed to build new refineries. Did you know we actually IMPORT gasoline?
Sure, I've known that for a long time. The US daily consumption of crude oil is ~20m barrels, of which ~13m barrels is imported - most of that from OPEC.
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I didnt mean oil, I meant that we actually have to import refined gasoline
Gasoline refiners figured they got a green light to substantially expand production in 2003, when the Bush administration eased costly clean air rules that kick in when industrial plants make big additions to capacity. The Bush regulation would have let refineries modernize existing plants and expand capacity by nearly 20%, without requiring the installation of scrubbers. But a three-judge panel on the D.C. Circuit Court of Appeals squashed expansion plans when it overturned the Bush regulation, saying the plain language of the Clean Air Act required a stricter approach.
Advocates for the Bush regulation, including refiners, electric utilities and chemical makers, aren't ready to concede yet. But with several years' worth of court appeals certain, it's unlikely that refiners will proceed with plans to expand capacity by 1.3 million barrels a day, raising daily output to about 18.5 million barrels by decade's end. Although some small incremental U.S. production increases are still likely, the ruling virtually guarantees that imports of gasoline will rise significantly. Already about 17% of U.S. gasoline use, the imported share will probably climb to nearer 25%.
That's likely to leave motorists fuming because it costs more for foreign refiners than their U.S. counterparts to make the variety of gasoline blends mandated by clean air standards and marketed only in this country.
http://www.kiplinger.com/businessresource/forecast/archive/gasoline_imports_set_to_surge__.html
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Oh wow, didn't know that! Thanks for the link.
Time to fire up those nuclear powerplants. Bring it on!
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I didnt mean oil, I meant that we actually have to import refined gasoline
If you are going to import crude, it makes sense to import finished product as well. Refineries in the third world can refine cheaper than in the US because they only have to pay third world wages and safety and environmental standards are lower.
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I say we should be drilling everywhere that we feel that we have oil... The "Not in my back yard" crowd should have little to say, much like those who must sell their land when a large interstate highway comes through. No, I am not a fascist or socialist... BUT when we are being "Held over a barrel" (Pardon the lame joke) by people who typically are our enemies, we have to tap ALL of our resources. Those who opposed offshore drilling in south Florida should know that now, through a partnership with cuba, communist china will be drilling in the waters between Florida and cuba. We should stop the corn ethanol - it costs more than it would ever be worth and it is driving the price of our corn products including corn for feed for cattle through the ROOF! We should be building refineries, nuclear plants and coal fired plants. Then after proven techniques for getting energy are being tapped, research "What's next"... We need an all-around energy assault like Kennedys space shot program.
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Anybody got a link to this deal between cuba and china? I have not heard of it yet.
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Anybody got a link to this deal between cuba and china? I have not heard of it yet.
You mean Cuba drilling for oil right off our own coast, in the same area in which WE AREN'T ALLOWED?
http://www.clipmarks.com/clipmark/E311B182-2C52-4DFC-ACBE-537DE6E56C04/
(http://content4.clipmarks.com/image_cache/merrie/512/DFC03002-97A3-47FF-943B-CCDF842249AF.jpg)
As is obvious by the map, they are in all likelihood sideways drilling oil off our land
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So if you grow your own tomatoes, independant of ther farmer or the supermarket, why does the market price of tomatoes worry you?
I do and it doesn't.
But you're comparing apples to ..., err tomatoes to oil. Since not too many people have an oil refinery in their backyard, oil is bought and sold on a global market. Then you and I buy the gas, diesel, and so on, the price of which is determined in large part by the global price of oil.
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I do and it doesn't.
But you're comparing apples to ..., err tomatoes to oil. Since not too many people have an oil refinery in their backyard, oil is bought and sold on a global market. Then you and I buy the gas, diesel, and so on, the price of which is determined in large part by the global price of oil.
I was comparing a commodityto a commodity.
Oil futures are traded, so are tomato futures. The very same economic laws effect their prices.
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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?
You may be right but I thought they made like 50 to 60 cents per gallon.
Personally, the banking and so called healthcare crisis are all government caused and yet people are so lgnorant they want more.
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Who's the greedy thieving bastards now?
Oil companies when they sell gasoline made from Texas and Wyoming oil based on OPEC prices. Oil from Texas and Wyoming goes for $30 to $40 a barrel.