Oil At New Highs - Opinions wanted on synthetic oil

MSNBC ^ | 3-16-04 | Jason Rines

[quant5]

U.S. prices have jumped 4.5 percent this week as suspicions grew that the militant al Qaeda network was linked to the Madrid bombings last week that killed 201 people. Supply concerns have gained renewed force as oil cartel OPEC, which controls half the world’s crude exports, plans to reduce supplies at a time when Chinese demand is rocketing. Traders are also on edge over the prospects of a summer gasoline supply crunch in the United States, the world’s biggest oil consumer, where fuel inventories are running below normal levels.

[quant5]

I would like to know from some Freepers who know finances and oil tell me why we do not build 20 major synthetic oil plants to produce all of our oil domestically. Every time their is the slightest unrest, the OPEC cartels bump the pricing. I saw a news clip about a year ago where a company in California sold environmentally safe sythentic gasoline for about $2.40 a gallon. Then, it was a debate whether people would pay the price per gallon. Now it appears we are going to pay such a price anyways.

[babyface00]

I thought the Iraq war was all about cheap oil.

I'm starting to wish it was!

[dirtboy]

I saw a news clip about a year ago where a company in California sold environmentally safe sythentic gasoline for about $2.40 a gallon. Then, it was a debate whether people would pay the price per gallon. Now it appears we are going to pay such a price anyways.

Lots of underlying issues here:

- The Saudis try to tune the price of oil to a point where they make as much money as possible without triggering new domestic development or synfuels development in the United States. If the U.S. were to embark on a major synfuels project, the Saudis would probably signficantly boost the price of oil enough to make the projects economically untenable.

- We'd have to mine coal for the synfuels, and the enviro-whackos will cause as much trouble there as they've caused with trying to drill ANWR.

- Oil is still the most inexpensive motor fuel to produce, and any company wanting to invest in synfuels knows that the current high prices are an artificial creation that could be undone at anytime - which is not the most conducive environment for attracting private capital.

It would probably take significant government underwriting to take on this project, and then you open up the opportunity for all kinds of mischief, similar to the ethanol boondoggle with which taxpayers are currently saddled.

[Shermy]

Supply concerns have gained renewed force as oil cartel OPEC, which controls half the world’s crude exports, plans to reduce supplies at a time when Chinese demand is rocketing.

So, China all of the sudden doubled the amount of their vehicles? Or colluding with OPEC by trading our tresury notes to build up reserves, timed with OPEC cuts and disregard for their traditional "basket rates"? Pro-Kerry, and-Bush votes in the era of "global democracy". What to do with our pro-"free" trade brothers OPEC and China?

[Zeroisanumber]

Blah... If the price gets above $2, I'll just break out my bike for the summer.

[Shermy]

What to do with our pro-"free" trade brothers OPEC and China plan

[boris]

If we had enough nuclear power, we could make all the synthetic fuels we want.

Of course, the "intervenors" would have to be flown out to sea and dropped from aircraft [about 500 miles ought to do it], the incredibly lengthy certification process streamlined, and so forth.

--Boris

[MrB]

Basically, the return on investment is too risky and low to justify doing the research and capital investment.

As another FReeper stated, as soon as OPEC discovered someone attempting such an investment, they'd yank the rug out from under oil prices.

[kaktuskid]

ever heard of SASOL?

[Eva]

The Clinton adminstration approval of the take-over and mergers of US oil companies, combined with the refusal to allow new drilling in ANWR and other off coast areas, is responsible for the the high prices.

[Dead Dog]

and any company wanting to invest in synfuels knows that the current high prices are an artificial creation that could be undone at anytime

And this is the reason for Bush's hydrogeon fuel BS, as well as drilling ANWAR. It isn't so much about actual supply and demand, as it is a threat to keep oil cheap.

[Fierce Allegiance]

Hydroelectric powered vehicles are the clean, cheap solution!

[biblewonk]

Canadian oilsand is probably the next cheapest solution. Actually simply converting to diesel engines would really save an amazing amount of oil/gas/energy.

[jimt]

Actually simply converting to diesel engines would really save an amazing amount of oil/gas/energy.

Provided you don't mind the filth and the stench.

Diesels are way behind gasoline engines when it comes to pollution. That said, they are economical.

[RightWhale]

According to Peak Oil, it may be too late already to implement alternatives on a sufficient scale. It is getting near impossible due to cost to maintain the infrastructure, and upgrading is not cheap. A straight busness investment would require a probable return on investment at a later date. This means that unless oil cost rises substantially higher than at present and looks like it will stay there, business will not make the investment.

[KC_for_Freedom]

they'd yank the rug out from under oil prices.

Yes, like the oil in Texas, worth pumping now, but the Saudies could drop prices back to $20 per and the Texans would all get laid off again.

[CROSSHIGHWAYMAN]

Germany made oil from coal and nearly defeated the rest of the world in WW2.

Why the hell can't the US do what Germany did 60 years ago?

Environmentalists whackos!!

[possible]

Folks are missing the point here. OPEC is largely made up of enemies of the U.S. Think Saudi Arabia. Think Venezuela. The production cut by OPEC is an attempt to damage the U.S. economy and defeat George W. Bush in November.

[Cold Heart]

Hydro electric powered vehicles. Would that be a boat floating down river from a hydroelectric dam. Would be very cheap one way.

[biblewonk]

I guess that would depend on which pollutants you consider to be the worst. Being more efficient means much less CO2 in the air though I think diesels kick out quite a bit of sulfur