Posted on 01/13/2011 11:48:03 AM PST by bananaman22
The Offshore Drilling Ban that is in place today has been existence for 30 years. And while part of that ban was lifted last year, there has not been activity in those areas.
As for the moratorium on Gulf drilling after the BP disaster, it was a necessary action at the time, but should have been lifted sooner.
The whole idea that we are not drilling in the US is complete BS and the idea that we are not producing oil is nonsense as only Saudi Arabia and Russia produce more oil.
Sure, there is 55 gallons in a barrel. $4 x 55 = $220. The post said OIL to reach $4.00 per gallon.
An oilfield barrel is 42 gallons.
There is also a refining margin to account for. A barrel of raw oil does not make 42 gallons of gasoline and it costs money to refine and transport. You of course can’t do that without buying a refinery and trucks and such.
A better approximation is the current price of gasoline / the current price of oil = $/gallon of gasoline / $/barrel of oil.
e.g. $2.89/gallon / $91.00 / barrell = 0.03186 gasoline / barrel
Then $4.00 gasoline / 0.03176 = about $125/barrell oil
Oil will not reach $4.00 per gallon. I believe the title of the article was “Who, How and Why: $140 Oil and $5 gas”
The profit margin on gasoline goes down when oil price goes us since refiners try to offset the lack of demand to keep the refineries running optimally and also a result of them getting caught with lower priced contracts vs. spot oil prices.
I think the $4 a gallon quote was supposed to be for gas, not oil. My $220 comment was meant as a tease. Question for you, it appears you know a bit about the oil business, in this country a barrel of oil, grease, kerosene, etc. is sold in 55 gallon drums. I’m clear on all of the input costs that have to be considered to get finished product to market and that barrel is only a term to calculate bulk volume but why is an oilfield barrel 42 gallons and not the US standard of 55 gallons?
A standard oil field barrel is 42 gallons or 5.615 cubic feet. This is the standard used for all oil field calculations involving this measure.
Wish I had a nickel for every time I’ve punched 5.615 or .1337 into a calculator. If I did I wouldn’t still be doing it.
Well, actually I probably would because I really like what I do most days.
The steel drum is 55 gallons.
“They are joined by environmentalists who have long believed that only high prices will break America’s passion for the automobile.”
If gas keeps going up, the only thing that’ll be broken is some environutzi’s nose.
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