Douglas ...
I don't disagree with your assessment of why prices dropped in the 80's. But then again we made a deal with the Saudis to do that. Don't you think we could have done more domestically ( drilling )then. People are questioning energy policies, why not that way then. Now that is the rheteric. The USSR could not maintain their production without help from the west anyhow. Where do you thing they got the equipment ? Who do you think helped them ? By the way call me a commie but I think it would have been safer to let the USSR move slower to a market economy more like China, could have saved that missle money and avoided that recession. Also would have known where all the nukes were It was inevitable anyhow , everyone but the CIA could see that coming <G>
It seems to me we need to build at least 1 more of those billion dollar refineries for situations like this.BTW.. If it is built I vote it be put on the east or west coast. But guess what, big oil doesn't want anymore refineries.
As far as I can remember the refineries around here always run at the 94/96% ( not official numbers just memory )levels barring any unforseen accidents. The difference is whether are not the reserves are being replenished . If the price is rising the refiners make more money if they wait to buy the oil to store at a lower cost . The opposite is also true, when the price was dropping , lets say today it is at $15 a barrel the refiners buy that oil and it drops to $11 dollars, they have now lost $4 a barrel on the stored oil.
Don't get me wrong I'm long oil, but right now I am worried about a big drop too. Something I heard on CNBC recently that there was 850mil barrels missing , think they meant it was on the water. If my simple math is correct that is like 283 days worth. Is it all heading here ?
Actually I wish the Fed would have stopped raising rates sooner. They believed with everyone else the rise was temporary. An oil co. CEO being interviewed on TV was saying that we will never be able to completely support our needs domestically again. He blamed this administration for the fact that during the previous administration we imported 50% of our oil, now it is up to 59%, an 18% increase ,guess what that correlates to the growth of technology and the expanding economy. The way the internet and the economy exploded if you knew years in advance it would have been hard to be ready for it. It takes time to drill wells and pump oil. Oh I guess the problem would have been solved by not letting the economy grow.
Even if you find a new field that has a billion barrels of oil it takes a long time to drill multiple wells, and at some point it produces diminishing returns. The more holes the lower the pressure which results in lower flow rates.
According to one report , think it was 2 output increases ago , it stated at that time the Saudis had 4mil barrels a day max of production left. It was reported though that they could only keep that up for a short period of time because during the glut they shut down wells and didn't maintain them so the equipment can't handle a long sustained increase. This was from some analyst and he said they could only handle a sustained 2mil barrel a day increase.
People also overlook the fact that Reagan/Bush didn't keep high gas milage standards. I laugh when someone at the pump in a SUV wines about the price. I drive a 4 cyl. P.U.
As far as a payback to the Saudi's, if thats what we fed them and they swollowed it , we should have sold them some sand too. I bet the Kuwaitis think we were just being nice guys also <G>
Personally, I wish the price would stay high enough to excelerate this fuel cell technology. Its awful smokey in this town. Since Bush appointed this Texas Natural Resourse Commision we became #1 in pollution, wonder if they gave themselves bonuses ? What a coincidence some of the members worked in the chemical manufacturing industry. Oh yeah, his dad has his real home state dumping nuclear waste in this one, can't wait for the next pres Bush. The oil service co I worked for in the 80's was so sleazy we would know 2 weeks in advance that OSHA was coming and the exact time. All the serious abuses were miraculously gone when they got there. I want people from this industry making health care desisions for the rest of the country ( I know OT ).
BTW... I wouldn't tell anybody you were with the Carter Admin when you want to debate energy policy. GGGGGGG. I had steady work at the time. THANKS.
BB ^-^- |
