Posted on 11/26/2006 8:45:01 AM PST by Dubya
There's oil in California, both onshore and offshore. Trouble is, the residents there don't want oil companies to get it.
They'd rather have it bubble naturally to the surface and float ashore rather than see it turned into valuable resources.
This is an aP article and not worth the toilet paper it is written on.
The AP is the enemy of America.
A couple of questions for you. What is the relationship between the drilling rig number and refinery output, and demand?
Also, what oil companies were going belly up during this period?
Those mean ole new people.
There's no direct correlation between drilling rigs and refinery output. They should be viewed as separate industries. The vast majority of drilling companies do not have refineries, and many, if not most, refineries do not have drilling operations.
Drilling companies chase oil based on the price they can sell it to a refinery. That's whatever the world price of oil is, plus whatever adjustments there are for quality and transportation. There is no particular advantage for a drilling company to supply crude to its own refinery. That oil company could sell it on the open market for the same price its refinery would have to purchase imported crude, or crude from any other domestic supplier.
The biggest companies that went belly up (or agreed to be purchased to avoid bankruptcy) during that period were Mobil, Amoco, and Atlantic Richfield (ARCO). There were dozens of other smaller companies that disappeared as well.
ping
California produces over 700,000 barrels of crude per day. Kern County alone has about 30,000 producing wells.
Yep, plenty of existing production. It's the new stuff that California is preventing in large part.
You have a good one, too. With over 26 years in the oil industry, I'm going to have an opinion, and I'm guessing it's going to be more informed than most offered in support of this stupid AP article.
Thank you.
I agree there were mergers but not to avoid bankruptcy.
My question about the capacity of the drilling rigs and the output of the refineries was to indicate that with a nearly 250% increase in drilling capacity there should have been a glut of crude that drove prices down. I don't think that was the case on the crude side or the refined side.
I was there. Why else were these consolidations happening in times when oil prices were around $10/bbl?
If you have a different theory, I'd love to hear it. My family and my friends went through it. I still had a job. A lot of them didn't.
A 250% increase in drilling activity domestically is not going to impact the global market that much. Demand is that high, and it's a global market. There is no way that the US can drill enough oil prospects to cause a world glut. Even if the enviros cooperate.
We could make a major dent, but this story is all about how oil companies conspire to cause shortages. The media has poisoned the minds of the public. The proof is here on this thread in a conservative forum.
It would seem to me rather odd that the increase of oil production (more rigs) would increase with gas prices. Presumably, the rigs were getting oil to the surface. And, if drilling companies would certainly think they could sell it once it's on the surface.
The demand is certainly there.
It would seem to me that the bottleneck is at the refinery.
Another thing, I've read pretty much of the thread and I'm struck by another oddity. Why is it difficult to believe that oil companies would agree to use manipulative methods to drive the prices higher?
There are several thousand domestic oil and gas companies, far more internationally.
There are far fewer automobile manufacturers. Yet we don't hear a peep of protest that my father bought a brand new Corvette in 1965 for $4,800 and you can't drive one off the lot today for 10 times that amount.
Where's the bottleneck? Where's the outrage?
Are the drilling figures for domestic production or worldwide production? If the figures are for domestic production, was any part of that production exported? If so it seems extremely odd, since we are a gross importer of crude, that we would be exporting domestic production unless it was exported to be to be re-imported at an inflated price.
The above is present only as questions, not to be taken as a statement.
Seriously, it does not matter whether we export or import crude. It's all priced the same, and if it's cheaper to import oil from Venezuela (just across the American Lake) than to ship it down from Alaska, then we'll do that.
Almost all folks get too political about this when thinking about it, and that's not the way things work. Oil is all priced the same, no matter where it comes from.
It will go to the place where it can be delivered most cheaply. It's no more complicated than that until governments make it so.
I thought that all of the Alaskan oil was exported since it was cheaper to export than to haul to the lower 48.
I am somewhat of a Nixonsonia in that I can support some price controls if a good's price has a major disruptive effect on the overall economy.
To trust the oil industry or any industry to conduct itself in an ethical manner is unwise. In our current business climate I think that business leaders will engage in unethical conduct until they are forced to follow the law. Not all business leaders fall into that catagory but in my experience most will.
Some Alaskan oil is exported--the amount is limited by law. I think it is less than 10%.
BTW, price controls ALWAYS lead to shortages. It did when Nixon used them.
This is oversimplistic, but I'm going to generalize.
Mr. refinery manager wakes up tomorrow and finds that he can get crude various places just like every other day. He has to keep in mind what his refinery is machined for. Big difference between North Sea oil and West Texas Sweet.
Mr. refinery manager doesn't give a rat's **** where the crude comes from. He cares about price and quality. How much does it cost to get it into his front door.
He couldn't care less whether it's from Russia, Alaska, or down the road in Texas.
I think all of the Alaskan oil goes to West Coast refineries today, especially considering the declining
You hate business and don't trust business leaders. I resent that, but respect your opinion.
I'd just suggest that you'd be living in a tent if American business wasn't doing some good.
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