Fred Stone wrote:
> "Bob (this one)" <[email protected]> wrote in
> news:[email protected]:
>
>>Katra wrote:
>>
>>>In article <[email protected]>,
>>> "Bob (this one)" <[email protected]> wrote:
>>
>>>>Rick wrote:
>>>>
>>>>>How much do you think the oil up in Alaska has lowered prices at the
>>>>>pump? It will have some effect just as drilling offshore of
>>>>>California and Florida will have an effect at the pump.
>>>>
>>>>Actually, it won't have much effect. Barrel prices are dictated by
>>>>international demand. If Exxon can get a better price in China than
>>>>here, that's where it'll go. The other problem is that we just can't
>>>>refine any more than we are, so more crude does nothing for what
>>>>comes out the other end of the pipe.
>>>>
>>>>Pastorio
>>>
>>>Then why does the stockmarket price of oil affect the daily price at
>>>the pumps? ;-)
>>
>>It doesn't. It's not the stock market but the oil market. And it's a
>>bidder's game. The barrel price is determined by how much people who
>>want it are willing to pay the guys who own it.
>>
> Which is in turn affected by how much the "guys who own it" are
> producing. But in fact the ANWR fields are not the US's greatest
> potential source of petroleum. Our "oil shale" deposits are enormous, in
> the trillions of barrels, but they require some serious technological
> development in the extraction process and that process is not exactly
> "environmentally friendly" either. Current estimates run around $30 per
> barrel to make oil shale development economically feasible.
Fluidized bed coal gasification was highly touted back a couple
decades ago as a perfect fuel source for generating electricity.
Clean, non-polluting, less handling needed than coal. It went away,
though, because it cost more than the other available sources. Same
with oil shale. Our company built a demo plant that lasted a couple
years until the gee-whiz wore off. Then it went the way of the
nuclear-powered NERVA rocket engine and the oxygenated sewage
processing plant.
>>The prices of the refined products are determined by what they've made
>>it into. And how much they've made. This time of year American
>>refiners make a lot of heavy heating oil. In the summer it's more gas
>>and the lighter products. Gas and kerosene are just two of literally
>>thousands of products that are refined. Petrochemicals account for a
>>big percent of where the oil goes. You'll find plastics being more
>>expensive now, too, because that's where most of them come from.
>>
>>
>>>If we could produce our own oil for less than OPEC is selling it for,
>>>(currently around $55.00 per barrel), wouldn't that make a
>>>difference?
>>
>>The people that drill for it and the people who process it are driven
>>by international prices.
>
> And the prices are driven by the amount the drillers and processors
> produce.
Of course. Relative to demand. But those guys have to watch their
steps, too. If they throttle it back too far, it's recession time and
people won't have the money to buy it so freely.
>>If the Chinese and Indian markets will pay
>>more for it, then that's where it'll go. The only way we could produce
>>it more cheaply is to have more refining capacity. But even then, the
>>big oil guys will sell to the highest bidder. Just like all businesses
>>do.
>>
>>So, no.
>
> The oil market is not immune from supply and demand. Just watch what
> happens to the price per barrel when OPEC announces new production
> limits.
>
> Yes, refining capacity also affects the price at the pump, which only
> reinforces the point.
Exactly. As long as we're a net energy importer, this is what life
will be like. Drilling for more oil in the US isn't likely to do us
much good because the oil will find its way into the market to the
highest prices. It's a balancing act. But those fossil fuels are
finite. When it starts becoming more expensive to pull that oil out of
the ground, then the whole world will suddenly press for new
technologies. There haven't been any developed beyond
demonstration-of-concept in 40 years.
It will be a very large fan, indeed, that the problem hits.
Pastorio