Gas is available for export because of declining demand in the US, caused by economic slowdown, increased ethanol use, and higher-mpg cars being bought. Demand is down 550,000 bbls/day, exports are at about 500,000 bbls/day, so exports are not straining US gasoline supplies.
Can you imagine any other industry that is a employment engine, exporting millions of dollars, that folks want to GUT? So if we have a surplus in farming, we should prohibit exports in order to drive prices down? Or we should prohibit BMW from exporting cars from its South Carolina plant? REALLY?
And you say the price of oild did not change 50%. You’re right, it dropped MORE than that, $140/bbl -> $40/bbl, then up 65% to $66/bbl by June 2009. So it varied MORE than the gas price.
“you’re right, it dropped more…” Texases…exactly, thanks for making my point…and what happened during that time ? Declining demand was brought about by a recession. It had nothing to do with extraction costs or refining costs as was the original contention. Even at 1.69. oil companies profited handsomely. The price per barrel it could be argued FOLLOWED the demand and local prices of gas. It was world market pressures. NOW, energy producers can control our economic future. The nigher costs of energy predicated both our recessions and lower costs our recoveries. It followed the recession going down only.
Only, self determination and local energy production will have a substantial effect on energy costs. That is the only thing that can insulate us from large companies, controlling major sources or energy world wide…that includes natural gas. The same BS concerning nuclear power plants alone…a savior ? Hardly. Natural gas alone ? Hardly. Local energy production is NOT supported the way it should be on the national level do to influence of whom ? Corporate influence on legislation.
Somehow, we manage to give subsidies to oil and gas(?) companies, but no rebates we should for insulation. Just a few grand for a ridiculous Volt…that tells who controls govt, regulations.
Texases, Doc…final energy prices are as much about public policy ( I say jokingly) as the cost of production which stays about the same no matter where it is produced. Taxes and subsidies have much more to do with prices from highs of 8 to 9 dollars in countries where subsidies are low and taxes are high, to 3.89 (?) here where subsidies are higher and taxes lower.
When natural gas goes on line as a major contributor to transportation, it’s price will be controlled the same. User fees (taxes)and subsidized production will be discussed and legislated to produce the price structure of natural gas. Which I believe will have significant corporate influence.
So, this glut of natural gas here and it’s price are not as related as I keep hearing and the utopia of “free” ( we know itz’s not really free) energy from our natural gas outlets from our homes on a large scale without public policy and tax intervention will not happen. Just having a lot of it, doesn’t make it cheap.
Energy policies are in part, controlled by corporate donations into our political system which allow this as well.
Good question, JEM, but that point keeps getting pushed further and further out. Five years ago we were all worried about ‘peak oil’, me included. Then the horizontal well/fracking technology (that has the US flooded with natural gas) started being applied to oil reservoirs, and now we’re seeing large increases in light, sweet crude production in the US where declining production has been the rule ever since I got in the business 30+ years ago. Limitless? No, that time will come, but when? I don’t know.
All of this spirited banter just proves out one of my assumptions about second choice or alternative fuels for the masses.
No one can make the indutry stick to one overall choice so the result is zero infrastucture to make one available to all.
CNG
LPG
butane
propane
methenol
ethenol
bio-deisel
cow chips
C’mon now , if every one is so dang concerned about another useable fuel source get off your duffs and decide on one and put the infrastructure in place.
Only then will people buy it and use it.
Why do you thing gasoline is the IT fuel ?
Because it’s every where, the industry builds for its use and the supply infrastructure is in place.
The easier it is to use , access, maintain, and retain a future in , the more people will.
Wind power is starting to come into play, and lord knows we have plenty of that here in SD! But, again you can’t build a wind farm where there are no power lines to carry electricity from it. And when companies see they are going to have to build miles and miles of power lines here just to get electricity from point a to point b, they start to look elsewhere. Lack of infrastructure is a problem as Ken said. Seems like a good place to put people to work!
Speaking of infrastructure, on the non-automotive front…
I think the entire construction industry should come to a screaching halt…change the way every roof is built from this point forward…and never build another roof, industrial or residential, without solar.
Hot water exchangers or photo-voltaic electric, every roof ever built should have solar on top.
Solar is good in certain locations, but it can be a VERY high cost energy source. I pay 8-9 cents/kw-hr. In Spain thay had to subsidize solar at 60 cents/kw-hr.
Just need to be VERY smart on how and where we implement solar.
@kengreen - I agree with the concept. I’m looking at solar panels…and maybe if the price drops I’ll buy some. My house is in the “perfect” location for them. But my neighbors who live across the street they would be wasting their time (surrounded by trees and facing wrong direction).
The problem with the solutions from the big corporations is…they all seem to be centered around some type of power distribution system. NOT individual homes creating their own power for their own private consumption. There’s very little money in selling solar panels…but a lot of money in selling you power that was produced using solar panels.
@kengreen - I agree…and they have come done in price…If I was younger I would be buying them now. But now the payback is beyond my retirement years…when I just may move to a warmer climate.
@dagosa. You cannot use short term fluctuations in gasoline prices to determine whether there is a worldwide glut. It’s like the inventory in a depertment store. If there is a spring sale at half price that does not mean that the cost of producing these articles had dropped by 50%! An excess of “distillates” in the storage tanks in the US does not mean that Saudi Arabia has to lower its light crude price form $100 per barrel. That $100 is the longer term price we have to get used to. And it does not produce cheap gasoline.
There is not much cheap (to produce) oil left in the world; and the price tends to trail the most expensive MARGINAL reserves. Those are oilsands, heavy oil from Venezuela, ultra deep offshore oil, and others. The production costs of most of these exceeds what oil sells for if there is a temporay high inventory somewhere in the US.
Natural gas is not a replacement for gasoline, but a supplement. It’s use for transportation could grow quite large, as ethanol use in Brazil has. We have an infrastructure to distribute NG through the existing pipelines to our homes, and there appears to be more NG filling stations coming very soon. As with any big endeavor, there are problems that need attention. We need to determine how to collect fees for highways if everyone fills up at home. Vehicle manufacturers need to start building more than the very few vehicles that run on NG. But if anything is going to put a dent in gasoline use in the USA, NG is it. It will be interesting to see how this plays out.
I agree JTS - there are 4 ways to cut gasoline use today - hybrids (no infrastructure needed, moderate vehicle costs), diesels (ditto), EVs (moderate infrastructure, super-expensive vehicles until a battery breakthrough) and NG (moderate infrastructure, moderate vehicle costs). The other fuels like propane and butane work, but there’s not as much available, and no home fueling options. Ethanol, in my opinion is a loser in the US (not Brazil), and no plans are out there to make methanol-compatible cars. Last on the list is hydrogen, which combines huge infrastructure costs with high energy requirements and super-expensive vehicles.