Posted on 06/06/2006 1:06:58 PM PDT by thackney
Let them. Do you think we would be worse off with billions of dollars remaining in this country and not going to them?
Is it time yet to invade the middle east and take all the oil?
Right - with friends like the Saudis.....
They may be reducing output because they want to give their fields a rest. Many knowledgeable folks think they are much farther along their production peak than is commonly thought.
You can't reach too many conclusions based on one month of refining data. Demand for oil products is lowest in the Spring and early Fall, so that's when refiners do some shut-downs for maintenance and repairs. As far as I know, the refining industry has been running very hard at 85-95% of full capacity for a couple of years now. Refiners are working on some refinery expansions now, but they still remember the 1980s when growth of gasoline demand was flattened by improving vehicle fuel economy and the refining industry had major excess capacity. I would think that refiners are studying the auto industry carefully and trying to predict how much fuel economy will improve in the next ten years. That's a tough forecast to make, but I don't see any major breakthrough that will improve fuel economy substantially (other than people just buying smaller vehicles with smaller engines.) Hybrids are still too costly to produce in large numbers and clean diesel is still at least several years away.
The other problem is that by the time oil reaches the surface in ANWR (seven or eight years), a million barrels a day will be an even smaller percentage of total consumption in America and worldwide. If the price of oil continues to rise, a million barrels will be relatively inconsequential to the overall pain. At that point, China and India will gladly soak up whatever demand we remove from Saudi Arabia, and we'll still be dependent on them to meet our needs.
The point is, any way you cut it, Saudi Arabia will still have us over a barrel (no pun intended). Pissing them off by undercutting them can only lead to more pain.
Most of the world's refining capacity lies outside the US. There is not a world wide shortage of refining capacity.
If it leads to billion dollar loaves of bread, yeah. (I'm exaggerating, of course, but you get my point. We can't hurt Saudi Arabia without hurting ourselves).
That sounds like more reason to produce our oil, increased need. ANWR is not the total solution, but it is part of the solution.
No I don't get your point. Saudi Arabia is not dependent on the US, their oil and the majority of OPEC's oil goes to other customers.
I've heard there is more refining capacity outside the US. It may be that when oil companies add in the extra shipping cost, the imported gasoline costs enough to suppress demand in consuming nations like the US and then the extra Saudi output isn't needed.
I don't follow you. Shipping costs of gasoline into the US would not be greatly different that shipping cost of crude oil to the US that we then refine.
Well it depends where the imported gas is refined. We're importing gasoline from South Korean refineries into the US west coast. If the oil originates in the Middle East, then some extra shipping distance is added to go north up to Korea and then on the US west coast (mainly to California). I think gasoline is a little more explosive than crude oil and is more hazardous to ship, which may add to insurance costs for shipping. It's also possible that refineries overseas are not quite as large and cost-efficient as US refineries.
Saudi Arabia: "We put the 'Lies' in 'Allies.'"
You think the Saudi's ship us refined crude (gasoline)? No they don't.
I do not believe you will find this true. Refineries exist in all the parts of the world that produce oil.
I think gasoline is a little more explosive than crude oil and is more hazardous to ship, which may add to insurance costs for shipping.
Explosive atmosphere in the confined space requires the same type of equipment for either. Hazardous area classification for electrical equipment in the petroleum industry is one of the jobs I do. Since explosions or fire of gasoline shipments is almost never happens, I doubt this is a significant cost difference.
It's also possible that refineries overseas are not quite as large and cost-efficient as US refineries.
Possibly, but certainly they are less expensive in terms of labor, energy and regulations.
Well I know for a fact that the US imports gasoline from South Korea into the US west coast. So there is some extra shipping distance required to go from any major oil producer to South Korea and then on to the US.
The other cost factor that is holding down US gasoline consumption is the new ethanol requirement, which has added about 20 cents to the price of gasoline in the affected regions of the US. That price increase is holding down demand to some extent and reducing the need for Saudi crude.
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