Well of course they have profit in mind, otherwise they’d go out of business. Same for most companies (except GM and Chrysler). And I thought we were wanting to not be importing our energy. Anyone who thought we could separate oil prices in the US from world oil prices is mistaken. Natural gas has been decoupled because it’s harder to ship.
If one wants to guarantee shortages, start imposing export bans/price controls. Amazing how basic trading is supplying all the oil and natural gas we need, and is cutting into our trade deficit.
Refined?,you should smell some of the No.2 I’ve pumped in the old fuel tank to burn in the “Cats”-Backhoe,Dozer,etc.The stuff smells heavily of Bitumen,occasionally we have a run on fuel fiiters,I’ve heard the U.S has some of the dirtiest fuel in the world and tend to believe it.Thats also a good reason to avoid the small Diesel engines(if they dont have a good filtering system)Maybe its time we started investing a little more in external combustion engines,does anyone know if the last coal fired oceanliner we had is still steaming? (clean coal is an oxymoron in my opinion,but I love the smell of the dang stuff burning must be all the pollution and fond Childhood memories)-Kevin
I feel it’s becoming more and more apparent that whether we import or drill domestically, there will be little difference in the price of petroleum products here at home. The earth is indeed flat. Our biggest concern should be the effect we have on all of these politically unstable countries when we side with dictators and go to war under the guise of oil prices when we are there, only to increase the profits of our energy companies.
That seems to be the rational when you have two oil men in charge of the country. Does anyone in their right mind think we would have gone to war, squandered trillions in wealth, left thousands dead both here and abroad for anything more than perceived cheap Iraqy oil for more profit. Now we are CYA with natural gas when that should have been done decades ago. I’m in favor of it to be sure. Just didn’t want all the carnage in the mean time. Hopefully we turn oil into the " salt" of our millennium and it is no longer a strategic product. But no, it will have little effect on oil prices in our life time…no more then 20 years for most. Getting off fossil fuels all together, will.
Well get off Fossil fuels we must.as the Shah of Iran said" oil is too valuable to burn". I hope that more people will will adopt Solar energy as thier hobby and not worry too much about the cost,kinda like fooling with old cars or whatever-Kevin
The approval process took about 3 years, 2006-2009, hardly “YEARS go”.
Must be the fastest approval time in US history.
And since you say it was started in 2006…NG prices took a huge spike in 2006 to 4-5 times what NG is now. So yes NG prices have an influence into the building/planning/approval of a Nuclear power plant. But that may change if India and China ever get a Thorium reactor to work.
When you buy fuel you are buying BTU’s… Energy content. Today, one million BTU’s worth of natural gas costs $2.32… If you want one million BTU’s worth of gasoline, it will cost you $30 at today’s prices…
That kind of a price spread will move markets…Consumers will accept a fair amount of inconvenience if they can operate their cars for 75% less fuel cost…
I still think the price difference between nat gas and gasoline will not continue as it is when natural gas begins to feel the pressure of increased use in transportation. It may always have a structural advantage and cost less per btu, but the cost will be as volatile, moving up and down as US energy corporations will begin selling any surplus on the world market as it can presently with gas. They will find a way of shipping it.
Likewise, use taxes both state and federal will be added as exists for both gasoline and diesel not used for heating oil, decreasing this difference even more. So, the cost difference per btu at the pump is deceiving for now.
I too agree with the Shah…and does defense use anything but petroleum for jet fuel ?
The “fracking” and horizontal drilling techniques that have been pioneered over the last few years have opened up VAST new N.G. supplies…These new supplies are desperately looking for a market…Power plants are one, and motor fuel is the next…
Motorists who also have residential gas service can refuel at home using a small compressor installed in the garage…These systems exist today…
Caddyman is right; we now have a WORLDWIDE gas glut. Both Canada and the US, as well as other countries, are now producing prodigious quantities of “tight gas” , or shale gas, and other conventioanl gas producers are building Liquified Natural gas (LNG) plants for export.
Transportation fuel will not make a large dent in the price. Only extensive use of natural gas in power plant to generate elecetricity will cause a significant rise in price.
It is still my opinion, that in the energy field, supply and demand forces in determining prices do not exist in a vacuume as the only variables. We have a glut of gasoline NOW and are selling this surplus overseas…prices are soaring still, because there is NO competition. If the same energy companies control both petrol nat gas or, as the often do to decrease competition, collude, there still is no competition. Until, localized production of energy is realized for electricity, we are always on the expensive fossil fuel wagon. Still, no one has considered that taxes are not added to natural gas for over the road use. The savings will be there, but controlled and not as great as many are playing it up to be.
Wood is a cheap, natural renewable heating source in Maine. Yet, when the price of home heating oil goes up and profits for petrol companies soar, so does the price and profits for local wood producers. The difference remains constant based upon convenience and heating oil companies still survive very well thank you.
So will gasoline suppliers, even when nat gas comes on line. Don’t expect great savings…you guys are dreamers if you do. Extracting nat gas will be costly in the long run too, as we gradually start dealing with long term polution effects in some areas. And, adding another fossil fuel to the mix, isn’t going alter the added expense of a condition most of us here even admitt to. http://www.huffingtonpost.com/2011/11/01/extreme-weather-worsen-global-warming_n_1070066.htm
Well Dagosa the Military basically uses one high grade blend of Kerosene for everything(including the motor cycles which makes good sense(kinda like operating on Zulu time).The Air Force has experimented with and certified a bioblend for use in some of its Jets. The “gas” motor fuels would present a problem dyeing them or whatever(I say user fees on the road-forget about fuel taxes)The trouble with taxes they even hit the innocent in a round about way at times,thats why I like user fees…-Kevin
Another option the military is looking into is GTL (gas to liquids) where diesel is made from natural gas. Uses a lot of natural gas (about 10,000 cubic feet per barrel of diesel), but the product is pretty high quality (no sulfur).
Making gas & oil a regulated utility rather than a commodity would help stabilize prices tremendously IMHO. As it is now every time a mouse breaks wind in the mideast speculators see it as a reason to raise prices. A good thing for them since they are also probably heavy into oil company stock.
Unlike natural gas, there is no glut of oil worldwide, and the $120 international price of oil dictates what you pay for gasoline, not an excess refining capacity in the USA.
Oil is an internationally traded commodity and Americans are lucky to have to import 50% of their crude oil. And the oil that comes from Canada, comes in at significantly lower prices than internationally priced crude. Oilsands oil from Canada sells for $20 less than worldprice.
Countries like Holland have huge refining capacity and they export gasoline worldwide, all at interantional prices. The pump price in Holland is about $9 per gallon.
In short, you CANNOT make cheap gasoline from expensive oil, no matter how much refining capacity you gave!!!
Yep, the government is GREAT at running things. Last time we got rid of price controls, guess what happened? Prices dropped and supplies went up. And regulate natural gas prices? When they’re the lowest they’ve been in years? Why?
Sorry folks, we don’t have the ability in the US to dictate prices.
Nor should we try.
I seem to recall that price and market government controls were tried in another country. The USSR.
The gas price controls in the 70s caused a shortage of natural gas for heating because drilling went down to almost zero and many houses had oil heating in 1974 when oil prices went up from $2.50 to $12.00 per barrel overnight. This caused severe stress an those with oil heating since isnulation standards were very poor in those days.
Nixon finally ended the 40 cents per million BTU interstate price control and drilling soared. The US quickly developed much more gas, backing out heating oil in those areas that had pipeline and distribution access.
Canada tried to control oil prices in the 70s by setting an artificially lower than market price for internal oil while putting an export tax on oil exported to the US to bring it up to world price. It caused great dislocation in the industry and local companies went overseas where their drilling effiorts would yield more returns.
Japan wisely adjusted itself to world oil and gas prices in the 70s and developed a strong lead in energy conservation and fuel efficient car design.
Gasoline price controls practiced by dictators in Iran, Venezuela, Nigeria, Indonesia,Saudi Arabia and other places have caused numerous problems, and discouraged conservation efforts.
Thanks for a thoughtful post, Docnick. I agree that price controls will not have a desirable effect in the long run. If after instituting them they are ever rescinded, the price will likely change substantially because no one can efficiently determine what the price ought to be.
Doc…"Unlike natural gas, there is no glut of oil worldwide, and the $120 international price of oil dictates what you pay for gasoline, not an excess refining capacity in the USA."
NO IT DOES NOT, short term. It’s market pressures.
There is no glut of natural gas world wide, and that is what will ultimately determine nat gas prices as a transportation fuel along with tax incentives in any country as it is now for gasoline.
In the US 7/12 2008 gas average was 4.12
11/29 2008 1.69
3/22 2008 3.87
The price of oil per barrel did not change by 50% during that time. Please remember there IS a manufactured glut of gasoline and still, the price goes up. Gas to be sold to the highest bidder abroad on the world market, driving up prices here, as world price per gallon of gas moves in harmony but lags behind changes in oil prices REGULATED by OPEC, the biggest producer of EASY access oil.
But, my contention is still that this so called GLUT of natural gas will not suddenly make all natural gas users, if and when they ever come on line, cut costs dramatically. The so called plan is to make long haul users of nat. gas to relieve the price of diesel, which affects the cost of everything. That is a good economic strategy. The only long term strategy for lowering personal transportation costs is the ultimate flex fuel vehicles. EVs.
Kmccune “Well Dagosa the Military basically uses one high grade blend of Kerosene for everything(including the motor cycles which makes good sense(kinda like operating on Zulu time).The trouble with taxes they even hit the innocent in a round about way at times,thats why I like user fees…”
I hear you but what is your point ? Gas taxes ARE user fees that work in concert with the number of miles you use our roads.