[threadbear]

$this->bbcode_second_pass_quote('MonteQuest', 'O')h, by the way...

$this->bbcode_second_pass_quote('', '[')b]Myth: High gasoline prices are caused by price gouging
In a rising gasoline price environment, oil companies tend to lose money at the petrol pump, because cost of supply is outstripping price of sales. In fact, spectacular profits for gasoline
marketing (the service station) are made in rapidly falling price environments.

[threadbear]

$this->bbcode_second_pass_quote('roccman', '"')Excuse me? Care to elaborate?"

Look bro...

You asked me a question AND said I was confusing the thread with my post.

I gave you the benefit ( on behalf of Zentric) to explain what Zentric wrote.

You came back with hairsplitting of words to justify Zentic's posts....that I thought was a lame reponse.

My post was relevant...I believe TOD is a center for excellence in oil discussions and I belive my posts only added to the fevor and complexity of this thread.

get over it.

[roccman]

This is a good thread.

I believe my post was relevant.

I thought your comment about me confusing this thread was inappropriate.

With that, I am done bantering with you.

[MonteQuest]

$this->bbcode_second_pass_quote('threadbear', 'M')ost of them don't own the gas stations.

[threadbear]

$this->bbcode_second_pass_quote('roccman', 'T')his is a good thread.

I believe my post was relevant.

I thought your comment about me confusing this thread was inappropriate.

With that, I am done with bantering with you.

[MonteQuest]

$this->bbcode_second_pass_quote('roccman', ' ')
My post was relevant...I believe TOD is a center for excellence in oil discussions and I belive my posts only added to the fevor and complexity of this thread.

get over it.

[Zentric]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('threadbear', ' ')What makes you think that Zentric or I, for that matter are challenging the idea that supplies are declining? .

[MonteQuest]

$this->bbcode_second_pass_quote('Zentric', ' ')Actually, Monte, if you cared to read the opening post in full, you'd realize that my argument for the near-simultaneous peaking of production at the major fields around 2005 (and the fields' subsequent production declines which I have never disputed contrary to what you impute) was based on a belief that these peaks were reached less as a matter of absolute geology and more as a result of other things such as economics and politics. Boy, I bet you're going to love dealing with that as a possibility.

[threadbear]

$this->bbcode_second_pass_quote('MonteQuest', 'O')h, by the way...

$this->bbcode_second_pass_quote('', '[')b]Myth: High gasoline prices are caused by price gouging
In a rising gasoline price environment, oil companies tend to lose money at the petrol pump, because cost of supply is outstripping price of sales. In fact, spectacular profits for gasoline
marketing (the service station) are made in rapidly falling price environments.

[MonteQuest]

$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('MonteQuest', 'O')h, by the way...

$this->bbcode_second_pass_quote('', '[')b]Myth: High gasoline prices are caused by price gouging
In a rising gasoline price environment, oil companies tend to lose money at the petrol pump, because cost of supply is outstripping price of sales. In fact, spectacular profits for gasoline
marketing (the service station) are made in rapidly falling price environments.

[threadbear]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('MonteQuest', 'O')h, by the way...

$this->bbcode_second_pass_quote('', '[')b]Myth: High gasoline prices are caused by price gouging
In a rising gasoline price environment, oil companies tend to lose money at the petrol pump, because cost of supply is outstripping price of sales. In fact, spectacular profits for gasoline
marketing (the service station) are made in rapidly falling price environments.

[MonteQuest]

Normally, I don't post lengthy info, I link to it...but since you seem to think this guy may be retarded, it should be easy to refute this testimony for all of us here to read.:

$this->bbcode_second_pass_quote('', '[')b]Executive summary
Gouging is an idiotic explanation. Anybody who blames record high US gasoline prices on "gouging" at the pump simply reveals their total ignorance of global oil supply and demand fundamentals. The real reason for high pump prices is the lack of global gasoline supply relative to demand. Just in the US, overall US refining capacity, at 17 million barrels per day (mb/d), is far below demand at 22 mb/d. In turn, pump prices are effectively set by import prices. With strong demand outside the US on the back of global economic growth and a weak dollar, the era of abundant US oil supply augmented by willing international sellers is dead.

The investment cycle drives the story – but it is 30 years long.
High gasoline prices will cure high gasoline prices. The reason for the massive recent run up in prices can be traced back to the last significant period of high prices, in the late 1970s, which forced lower gasoline demand, then more efficient cars, which led to excess refining capacity, which led to years of poor returns in refining (and cheap gasoline prices), which disincentivised investment in refining and encouraged demand, and which has ultimately led to today’s intense market tightness. It is fair to say that as we enter driving season in 2007, we are one major incident away from a 1970s-style gasoline crisis. There is now US gasoline inventory, at record lows, for just twenty days of consumption.

The poor returns of the 1980s and 1990s have indirectly caused some additional external events that have played into the problems. The years of losing money caused companies to neglect refining investment, culminating in BP’s Texas City disaster. Texas City has now rightly caused other refiners to operate more cautiously – and so less capacity is available.

Nevertheless, because the industry is so stretched, there have been subsequent accidents, for example, a further BP issue at the company’s Whiting, Indiana plant. These two BP refineries alone are two of the five biggest US refineries, now running at half capacity, with some 400 kb/d shut down, and the remaining operating sub-optimally, running rare light sweet crude when they should be using more abundant heavy sour grades. Not all problems are with BP, for example a fire at Valero’s McKee refinery has tightened the Mid-Continental refining balance.

A second impact of years of reduced investment has been a lack of qualified engineering, procurement and construction staff. One vital issue here is that the tightness of US refining capacity at this time is not because companies are unwilling to invest in more capacity, it is that they are unable. There is competition from non-refining investment to exacerbate the problem, notably in Canadian heavy oil sands.

Then, just when imports are needed more than ever, European and Asian demand strength has combined with a weak dollar to leave margins higher elsewhere, crimping import levels.

In this tight context the government has mandated tougher-to-make fuels, requiring more refining and plant maintenance. The law of unintended consequences results in government mandated ultra-low sulfur diesel (ULSD) being so hard to transport around the country that it excludes higher sulfur off-road diesel from the pipeline system, forcing farmers to use higher quality, more expensive, more difficult to make diesel than they would legally have to, and encouraging the export of off-road diesel to competing global markets.

Ethanol is not a solution. The ethanol “methadone” simply subsidies farmers to grow corn for ethanol using oil-based fertilizer driving oil-powered tractors and serves to make this economic using government/taxpayer’s money. Ultimately ethanol subsidy lowers the pump price of gasoline and effectively encourages the cheap gasoline addiction.

US policy makers must stop attempting to re-create a 20th century of abundant and cheap US gasoline, it is as dead as the geology that leaves no more cheap US oil. Avoid additional mandates and allow the market to direct capital towards the areas of tightness. Returns are now high, so US refining capacity IS being added, as fast as reasonably possible, and demand IS slowing. It is vital to allow US gasoline prices to reflect the true cost of supply, which even now they arguably do not do (awful geopolitics, the suffering environment). For this summer, be prepared to take emergency measures (lifting environmental restrictions, emergency IEA gasoline inventory drawdown) should an emergency develop. We are not there yet, but we are close.

[DantesPeak]

You can read what Paul Sankey said to the Senate here, not taken of context (I didn't read this myself until today):

http://energy.senate.gov/public/_files/ ... timony.pdf

$this->bbcode_second_pass_quote('', '[')b]Gouging is an idiotic explanation

Anybody who blames record high US gasoline prices on "gouging" at the pump simply reveals their total ignorance of global oil supply and demand fundamentals. The real reason for high pump prices is the lack of global gasoline supply relative to demand. Just in the US, overall US refining capacity, at 17 million barrels per day (mb/d), is far below demand at 22 mb/d. In turn, pump prices are effectively set by import prices. With strong demand outside the US on the back of global economic growth and a weak dollar, the era of abundant US oil supply augmented by willing international sellers is dead.

US policy makers must stop attempting to re-create a 20th century of abundant and cheap US gasoline, it is as dead as the geology that leaves no more cheap US oil. Avoid additional mandates and allow the market to direct capital towards the areas of tightness. Returns are now high, so US refining capacity IS being added, as fast as reasonably possible, and demand IS slowing. It is vital to allow US gasoline prices to reflect the true cost of supply, which even now they arguably do not do (awful geopolitics, the suffering environment). For this summer, be prepared to take emergency measures (lifting environmental restrictions, emergency IEA gasoline inventory drawdown) should an emergency develop. We are not there yet, but we are close.

[MonteQuest]

$this->bbcode_second_pass_quote('threadbear', ' ')The point he makes has no relevance if gas stations are owned by independants. He says "oil companies lose money at the pump" and that is central to his claim. For if oil companies don't even own gas stations it is a mistake of such glaring proportions it should be disregarded. Can we agree on that?

[threadbear]

$this->bbcode_second_pass_quote('MonteQuest', 'N')ormally, I don't post lengthy info, I link to it...but since you seem to think this guy may be retarded, it should be easy to refute this testimony for all of us here to read.:

[threadbear]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('roccman', ' ')
My post was relevant...I believe TOD is a center for excellence in oil discussions and I belive my posts only added to the fevor and complexity of this thread.

get over it.

[MonteQuest]

$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('MonteQuest', 'N')ormally, I don't post lengthy info, I link to it...but since you seem to think this guy may be retarded, it should be easy to refute this testimony for all of us here to read.:

[MonteQuest]

$this->bbcode_second_pass_quote('threadbear', ' ')Monte, It's just getting better and you don't know it, nor would you understand why.

[MonteQuest]

$this->bbcode_second_pass_quote('threadbear', ' ')As a matter of fact I would say more than gouging, by his testimony Big Oil is also involved in fear mongering in an already unstable fearful situation, in an attempt to drive the future's market.

[threadbear]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('threadbear', ' ')As a matter of fact I would say more than gouging, by his testimony Big Oil is also involved in fear mongering in an already unstable fearful situation, in an attempt to drive the future's market.