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Post by sweep on May 13, 2022 9:04:26 GMT -6
Well no shit ! No one said it would be a 1 for 1. The word "immediately" does mean that...
The price at the pump will decline immediately, it just won't decline as much or as fast. Just admit you don't have a clue what you are talking about and shut up. |
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Post by 00hmh on May 13, 2022 9:44:20 GMT -6
The word "immediately" does mean that...
The price at the pump will decline immediately, it just won't decline as much or as fast. It will decline extremely slowly and with a significant lag. I acknowledged a very slight impact in a relatively short time.
If you really meant a negligible and insignificant price response and not occurring "immediately," but only "soon" what was your point in criticizing my statement when I actually said that?
We would be saying the same thing?
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Post by bsutrack on May 14, 2022 22:48:17 GMT -6
A federal lease drilled in the New Mexico portion of the Permian Basin in November or December of last year would be on production by now. It takes under 6 months for those wells to be drilled and completed. A deep water well in the Gulf of Mexico would need 5 to 7 years. Sure but HOW MUCH of gasoline prices are explained by reduction is the transient supplies. What Biden and others anticipated as they formed policy a year ago, for the next few years and for the longer term, is a less severe adjustment where that reduction in domestic supply would be replaced at least in part by other sources of oil in the short run.
I believe policy makers consciously decided and anticipated gas at the pump to go up and accepted that as a cost for other gains, including environmental gain, intelligent change by the oil industry in pipelines over time, and were counting on incentive to reduce use of domestic oil for other purposes by conservation. None of that is short run, though. What happened in the last year meant the Biden administration was as surprised as the oil companies by the quick recovery of the economy and increased demand, and by the change in risk of oil imports.
The oil industry has done rather well to adjust considering everything. But you won't find me saying the gas price shock was anticipated to be as great as it is.
As for arguing in your back yard, I respect your knowledge. But I also see you believing what is good for big oil is always good. Plus. Economic forecasts are in my back yard, and causes of inflation due to supply chain and change in world markets due to Covid and increase in political risk is something the oil industry was blindsided by just as were the bureaucrats. It was not just politics, but I also acknowledge that. And OTOH, the oil industry has played politics to its benefit for decades. I don't know why anyone should have been blindsided to what was about to happen. Below is a graph of oil reserves held by Organization for Economic Co-operation and Development (OECD) nations. The 38 nations of the OECD pretty much captures the oil reserves held by the developed world. The exception being China.  Note the 300 million barrel increase in petroleum inventories that built-up from March, 2020 to October, 2020 due to the Covid-19 lockdowns. However, since November, 2020, petroleum inventories have been reduced by over 550 million barrels. Inventories are now at the approximate level of 2010-2014 when WTI averaged $96 per barrel. Notice there is no real increase in drawdowns due to Putin's invasion of Ukraine, yet. The rate of drop in inventories may increase over the next few months due to Putin, but as of yet it's too early to tell how much. As this graph highlights, all this blaming of Putin on high gasoline prices is mostly false. OECD petroleum inventories were falling long before Putin's invasion. Here is another interesting graph from a woman by the name of Gail Tverberg:  Since 1990, every person on planet Earth has pretty much averaged 4.0 barrels of petroleum use per year. The only thing that disrupted this were the Covid-19 lockdowns. Once the lockdowns are gone, this graph should return to 4.0 barrels per person. As the population of the planet continues to increase, the total amount of petroleum used will continue upward. The only thing that will change this is if (when) supply limits demand and that will be achieved by higher prices. As for oil price futures, at the current $110 per barrel oil the market is sending a signal to producers to step-up production. The fall in OECD petroleum inventories, the choking-off of federal leases that will decrease future US oil production are all part of what the market sees as future problems. By increasing the price of oil, the market is attempting to incentivize more oil production. One part of that would be by making more leases available in the US. |
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Post by sweep on May 15, 2022 8:09:15 GMT -6
The price at the pump will decline immediately, it just won't decline as much or as fast.
If you really meant a negligible and insignificant price response and not occurring "immediately," but only "soon" what was your point in criticizing my statement when I actually said that?
We would be saying the same thing?
I have no idea, because I can't make heads or tails of that first sentence. |
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Post by 00hmh on May 15, 2022 8:17:33 GMT -6
If you really meant a negligible and insignificant price response and not occurring "immediately," but only "soon" what was your point in criticizing my statement when I actually said that?
We would be saying the same thing?
I have no idea, because I can't make heads or tails of that first sentence. I never thought you understood the word immediate. If you had said "soon" and said what you thought that was, it would have helped. I was surprised only that you made such a rant out an eventual potential price increase that would be negligible. |
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Post by bsutrack on May 15, 2022 21:47:33 GMT -6
I believe policy makers consciously decided and anticipated gas at the pump to go up and accepted that as a cost for other gains, including environmental gain, intelligent change by the oil industry in pipelines over time, and were counting on incentive to reduce use of domestic oil for other purposes by conservation. None of that is short run, though. What happened in the last year meant the Biden administration was as surprised as the oil companies by the quick recovery of the economy and increased demand, and by the change in risk of oil imports.
I wanted to follow-up on this from a few days ago, as I think it's one of the more insightful comments you have made. The Biden administration is generally happy with increased gasoline prices as it is an opportunity to push folks into electric vehicles (EV's). Take the comments of their Transportation Secretary, Pete Buttigieg: thehill.com/dem-lawmakers/583325-buttigieg-electric-vehicle-owners-never-have-to-worry-about-gas-prices-again/There were also the comments by the Energy Secretary, Granholm after the Colonial Pipeline was hacked causing gasoline shortages on the East Coast: www.youtube.com/watch?v=hPsTEaXbNY4But here is the problem, you are never going to run our modern civilization on renewable energy and here is why. When you drill an oil well, the amount of energy you get out, even when you add-in the energy needed to transport the crude oil to a refinery and turn it into petroleum products, is about 30x. That is for every unit of energy invested you get 30 units out. For renewable energy, this return on energy invested is around 1 to 3. First you have to invested energy in mining the raw materials (all fossil fuels). Then you have to transport the raw materials such as iron ore to a steel mill (again fossil fuels required to do this). Next you have to process and refine the metals and make the necessary metal and plastics parts (mainly done with fossils fuels). Then you have to build-out the solar farms or erect the wind turbines. There are not electric cranes for doing this. All the first 7 to 10 years of energy production from a solar panel or windmill is just paying back the fossil fuel energy used in making it. The life expectancy of a solar panel or windmill is about 20 years, so you are getting net energy out for the last 10 to 13 years; hence the 1 unit of energy in for 3 units out. This 1 to 3 ratio is pretty similar to what was achieved by the agrarian societies of the 18th century. If you add-up the amount of energy put in to raise hay and corn, feed that to your beasts of burden (horses and oxen); the amount work done by those animals pretty much returned energy at a 1 to 3 ratio. |
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Post by chupacabra on May 18, 2022 8:39:09 GMT -6
The key with our current administration in their parallel universe pushing electric vehicles is that our electric grid is no where close to being able to handle 20% of consumers using EV’s, let alone a majority. I have worked with Oem’s that make the charging stations for 15 years (as well as the EV oems), and this statement comes directly from electrical and mechanical design engineers that have designed these products.
The EV push sounds good in theory, but it, like everything else that comes from DC these days, is a pipedream without facts.
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Post by Lurkin McGurkin on May 18, 2022 10:03:16 GMT -6
The key with our current administration in their parallel universe pushing electric vehicles is that our electric grid is no where close to being able to handle 20% of consumers using EV’s, let alone a majority. I have worked with Oem’s that make the charging stations for 15 years (as well as the EV oems), and this statement comes directly from electrical and mechanical design engineers that have designed these products. The EV push sounds good in theory, but it, like everything else that comes from DC these days, is a pipedream without facts. Not to mention that if you can't afford gas at $4.50 a gallon, you can't afford a $40,000 Tesla, either. |
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Post by chirpchirpcards on May 18, 2022 10:26:33 GMT -6
I believe policy makers consciously decided and anticipated gas at the pump to go up and accepted that as a cost for other gains, including environmental gain, intelligent change by the oil industry in pipelines over time, and were counting on incentive to reduce use of domestic oil for other purposes by conservation. None of that is short run, though. What happened in the last year meant the Biden administration was as surprised as the oil companies by the quick recovery of the economy and increased demand, and by the change in risk of oil imports.
I wanted to follow-up on this from a few days ago, as I think it's one of the more insightful comments you have made. The Biden administration is generally happy with increased gasoline prices as it is an opportunity to push folks into electric vehicles (EV's). Take the comments of their Transportation Secretary, Pete Buttigieg: thehill.com/dem-lawmakers/583325-buttigieg-electric-vehicle-owners-never-have-to-worry-about-gas-prices-again/There were also the comments by the Energy Secretary, Granholm after the Colonial Pipeline was hacked causing gasoline shortages on the East Coast: www.youtube.com/watch?v=hPsTEaXbNY4But here is the problem, you are never going to run our modern civilization on renewable energy and here is why. When you drill an oil well, the amount of energy you get out, even when you add-in the energy needed to transport the crude oil to a refinery and turn it into petroleum products, is about 30x. That is for every unit of energy invested you get 30 units out. For renewable energy, this return on energy invested is around 1 to 3. First you have to invested energy in mining the raw materials (all fossil fuels). Then you have to transport the raw materials such as iron ore to a steel mill (again fossil fuels required to do this). Next you have to process and refine the metals and make the necessary metal and plastics parts (mainly done with fossils fuels). Then you have to build-out the solar farms or erect the wind turbines. There are not electric cranes for doing this. All the first 7 to 10 years of energy production from a solar panel or windmill is just paying back the fossil fuel energy used in making it. The life expectancy of a solar panel or windmill is about 20 years, so you are getting net energy out for the last 10 to 13 years; hence the 1 unit of energy in for 3 units out. This 1 to 3 ratio is pretty similar to what was achieved by the agrarian societies of the 18th century. If you add-up the amount of energy put in to raise hay and corn, feed that to your beasts of burden (horses and oxen); the amount work done by those animals pretty much returned energy at a 1 to 3 ratio. Let me ask what is, perhaps, a stupid question. I've done literally zero research into this, so forgive me if it is ridiculous. How close are we to running out of fossil fuels? We call it a non-renewable resource for a reason, but is it 10 years, 100 years, 1 billion years? |
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Post by JacksonStreetElite on May 18, 2022 11:52:50 GMT -6
I wanted to follow-up on this from a few days ago, as I think it's one of the more insightful comments you have made. The Biden administration is generally happy with increased gasoline prices as it is an opportunity to push folks into electric vehicles (EV's). Take the comments of their Transportation Secretary, Pete Buttigieg: thehill.com/dem-lawmakers/583325-buttigieg-electric-vehicle-owners-never-have-to-worry-about-gas-prices-again/There were also the comments by the Energy Secretary, Granholm after the Colonial Pipeline was hacked causing gasoline shortages on the East Coast: www.youtube.com/watch?v=hPsTEaXbNY4But here is the problem, you are never going to run our modern civilization on renewable energy and here is why. When you drill an oil well, the amount of energy you get out, even when you add-in the energy needed to transport the crude oil to a refinery and turn it into petroleum products, is about 30x. That is for every unit of energy invested you get 30 units out. For renewable energy, this return on energy invested is around 1 to 3. First you have to invested energy in mining the raw materials (all fossil fuels). Then you have to transport the raw materials such as iron ore to a steel mill (again fossil fuels required to do this). Next you have to process and refine the metals and make the necessary metal and plastics parts (mainly done with fossils fuels). Then you have to build-out the solar farms or erect the wind turbines. There are not electric cranes for doing this. All the first 7 to 10 years of energy production from a solar panel or windmill is just paying back the fossil fuel energy used in making it. The life expectancy of a solar panel or windmill is about 20 years, so you are getting net energy out for the last 10 to 13 years; hence the 1 unit of energy in for 3 units out. This 1 to 3 ratio is pretty similar to what was achieved by the agrarian societies of the 18th century. If you add-up the amount of energy put in to raise hay and corn, feed that to your beasts of burden (horses and oxen); the amount work done by those animals pretty much returned energy at a 1 to 3 ratio. Let me ask what is, perhaps, a stupid question. I've done literally zero research into this, so forgive me if it is ridiculous. How close are we to running out of fossil fuels? We call it a non-renewable resource for a reason, but is it 10 years, 100 years, 1 billion years? We will never run out. |
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Post by DickHunsaker on May 18, 2022 13:51:59 GMT -6
 This is the vibe I get from these threads! |
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Post by bsutrack on May 18, 2022 18:29:38 GMT -6
The main problem right now is lack of investment in the oil and gas industry. The following is a graph shows worldwide Capital Expenditures since 2010..  Double click on the image to see it full-sized. This graph is from 2019. The actual expenditures in 2020 and 2021 (estimates on this graph) were actually much less. If Capex had held at 2013-14 levels for the period 2015 though 2021 approximately another $2.1 trillion would have been spent finding and developing oil and gas. This has lead to the current "tight" oil market. The attempt to keep Russian oil production off the market as accelerated something that was going to happen anyway. Essentially too much oil and gas was found and developed 2010 to 2014. At the end of 2014, the Saudi's got tired of cutting their own production to keep prices up and initiated a price war by flooding the market with their crude oil. The initial Capex cuts in 2015-2017 were in response to low commodity prices. The last few years ESG concerns have played a large part in underinvestment. The ESG folks have convinced the world that most of the oil and gas already discovered will never be produced due to the switchover to renewable energy. Why invest in an oil field that will not start producing for another 5 to 7 years and will need another 5 to 10 to make a profit when no one will be buying your production? This even has impacted what is referred as downstream (refining and marketing). There was about 1 million barrels of US refining capacity that was lost during the pandemic. These refineries needed to invest millions to upgrade and stay open, yet their ownership were convinced that with increased Electric Vehicles (EV's) there wouldn't be enough future demand to pay back their investments. Their closures have a good chance of causing gasoline and diesel shortages in the US as soon as later this summer. |
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Post by bsutrack on May 19, 2022 12:43:59 GMT -6
The next baby formula shortage? It's potentially going to be gasoline and diesel. oilprice.com/Energy/Energy-General/Analyst-Warns-Of-A-Fuel-Shortage-Crisis-In-The-US.html" Very low inventories of oil products in the United States and a shortage of refining capacity have laid the foundations for an oil shortage crisis in the United States this summer, Paul Sankey, Lead Analyst at Sankey Research, told CNBC in an interview on Thursday." "Asked about what would happen if an operating refinery were to stop production because of an accident or a hurricane, Sankey said, "we're on the verge of a U.S. oil crisis as it is, obviously what I'm talking about is shortages." "We've never seen inventories this low, particularly in the northeast. We haven't seen gasoline this low at this time of year in history," the analyst added." I don't think this is quite the making of history the Biden Administration envisioned when elected in November, 2020. |
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Post by villagepub on May 19, 2022 15:27:03 GMT -6
Early summer estimates are for $6.00/gallon gas throughout the East and Midwest.
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Post by 00hmh on May 19, 2022 15:40:55 GMT -6
Assuming we had the most Oil friendly administration, what would gas at the pump be right now? How would the shortage bsutrack described above due to some refinery outage be different?
If in fact there is a difference due to encouraging EVs and that is a political question worth debate. As is it a legitimate debate about the politics of regulating oil and other fossil fuels.
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