OIL
My friend, Trent, wrote this long rant about the gas prices... I thought it would be informative for a lot of folks so I'm posting in on here in case someone's interested:
* * *
Thirty minutes ago I found the facebook activists group combating high gas prices. Their goal was to buy gas from places other then Exxon/Mobile in hopes that this will cause them to lower their prices. This sort of ignorances really pisses me off, and it usually compels me to join the group then write an unnecessarily long, informed post on why they're all fucking retarded. I realize I'm probably not changing anyone's mind. I realized very few people will read it anyways. Yet, I join them and make the post anyways. Its more my benefit then it is for anyone else.
After spending all this time venting, I thought "Hey, I'm sure someone else would like to hear about this." So, instead of making a note about how totally awesome my friends are, or something sentimental about senior year that no one will read, (or the every popular - "I have something to say to one specific person but instead of outright telling them I'll be passive aggressive and write a note about it even though only one person will understand it"), I thought I'd post something informative. Anyways, here it is.
First of all, quit yer bitchin about high oil prices, especially if you live in the United States. The United States has the cheapest gas in the world (except for maybe some middle eastern companies and venezuela, where oil is their "cash crop" or is subsidized by the government) and the midwest (usually, not now - I'll explain below) has the cheapest gas in the U.S.. Go East, West, or north of here - gas is more expensive about anywhere you go. I recently went to London where gas was DOUBLE the cost that it is here. Go to a third world country, anywhere in africa, south america, Europe, Canada, etc, and the gas is more expensive. The cost of living is ridiculously low here and I'm tired of hearing people complain.
But, if you're really interested in why gas is so expensive, I'll tell you. My dad is an oil consultant. He quotes the oil market for a living. If you want, check out his website ( http://www.fundamentalpetroleumtrends.com ) and look at the "About us" section. You'll find a picture of my goofy father, the founder. He's sells subscriptions to his weekly analysis report on where the oil/energies market is going. His buyers are mostly private investors but a few are high end companies such as F.C. stone (look 'em up on wikipedia). Long story short, I get to hear better information at the gas market at the dinner table then you will on CNN, Fox, or anything in Time or Newsweek.
THE SHORT TERM REASON
Gas prices rely much less on political situations (there are a few exceptions, such as the British hostage situation in the middle east) and oil companies jacking up the prices, and much MORE on how efficiently the refineries are running throughout the united states. Currently there are three major refineries - one in Sweeny Texas, one in Mckee Texas, and one in Chicago - that are all down or not working at full capacity (there are several others, though these are the big ones).This is why gas prices are currently so expensive in the Midwest. Yes, its as simple as that. We have the raw oil, we just can't refine it very efficiently to produce gas. High prices are also closely related to the coming summer, though I'm sure you all know that.
THE LONG TERM REASON
But why are so many refineries braking in the U.S., and more importantly, why are there so few?
The last oil refinery in the United States was built in 1973 in Lamont, Illinoise. Although several have been expanded upon and improved, this is astonishing. The reason? A new government agency was now putting higher restrictions on creating refernies: The Environmental protection agency. The result? Gas companies in the U.S. decided it was cheaper to simply drill for more oil rather then creating more refineries, and the United States now has the same number of refineries as they did in 1973 (albiet more efficient and higher producing ones). This means there's less gasoline, and gas companies can charge more money for it.
Along with these restrictions on creating safer and cleaner refineries, the EPA decided to make the grade of gasoline cleaner - meaning gas companies now had to produce higher quality gasoline that wouldn't pollute the air as much. However, instead of forcing gas companies to produce the same grade of gas nation wide, which would be more efficient and cheaper to refine (MEANING CHEAPER GAS) they struct a deal - the quality, and thus pollution level of the gas, would be decided on from state to state and county to county. This means that the gas restrictions on gas quality in Kansas are different from New York or Oregon. The result is there are over 300 different qualities of gasoline nation wide, because everyone has different laws deciding what pollution level of gas they can have. This is HUGE problem - refineries have to produce all of these different types of gas and its a terribly inefficient process.
Now, on why all of these refineries are currently braking: Part of the problem I talked about above - there simply aren't enough refineries. If we had more, it wouldn't be such a big deal when one breaks. However, there is another theory, and it has to do with how oil companies do maintenance. Each refinery has to have maintenance done on it every couple of years. This is a costly process, every time you shut down a refinery to perfrom maintenance you're losing money. So, the gas companies don't maintain them for five years then something important breaks. Oh shit. Now they rush to the nearest parts supplier and beg them for the part, though usually to manufacture what they need it takes a couple weeks. Bing - gas prices rise because now there's less supply. Another reason is that its cheaper to have the maintenance team go from one refinery to the next, rather then fixing one, waiting a year, then fixing another. This would mean the maintenance team would have to fire/rehire people, and this costs money. So instead the companies move from one refinery to another, and what you have is a 10 refineries down for at least a month each over the course of the year. BING - gas prices reach 10 dollars.
Who do we blame? Blame the EPA for creating stupid policies in the 70s. Blame the Gas companies for trying to save money on when maintaining their refineries. But most of all, blame your fucking selves- because its YOU who polluted the atmosphere and created the need for the EPA in the first place, its YOU who lives in the country that has the lowest Miles per gallon cars in the nation, and its YOU who chooses to drive rather then walking, riding your bike, taking the bus, or carpooling.
Hell, if we reduced our gas consumption by just THREE PERCENT, the market would collapse. It happened before during the golf war - gas consumption dropped three percent and price per barrel of oil when from 35$ to 15$ a gallon. This is HUGE! Tha'd be like prices going from 2.20 a gallon to 1.30 in a matter of weeks.
Finally, this I beleive is the answer to all our problems in the middle east - U.S. market security on oil. Want peace in the middle east? Drive a more efficient car or just use less - if the price of gas became that cheap Saddam and the surrounding dictators would be fucked. GAS IS THEIR ENTIRE MARKET! Their countries would collapse, and we wouldn't have to spend billions of dollars on a war to remove them. We wouldn't be so worried about whats going to happen to our oil (and invading a country) if we weren't so damn dependant on it.
* * *
Thirty minutes ago I found the facebook activists group combating high gas prices. Their goal was to buy gas from places other then Exxon/Mobile in hopes that this will cause them to lower their prices. This sort of ignorances really pisses me off, and it usually compels me to join the group then write an unnecessarily long, informed post on why they're all fucking retarded. I realize I'm probably not changing anyone's mind. I realized very few people will read it anyways. Yet, I join them and make the post anyways. Its more my benefit then it is for anyone else.
After spending all this time venting, I thought "Hey, I'm sure someone else would like to hear about this." So, instead of making a note about how totally awesome my friends are, or something sentimental about senior year that no one will read, (or the every popular - "I have something to say to one specific person but instead of outright telling them I'll be passive aggressive and write a note about it even though only one person will understand it"), I thought I'd post something informative. Anyways, here it is.
First of all, quit yer bitchin about high oil prices, especially if you live in the United States. The United States has the cheapest gas in the world (except for maybe some middle eastern companies and venezuela, where oil is their "cash crop" or is subsidized by the government) and the midwest (usually, not now - I'll explain below) has the cheapest gas in the U.S.. Go East, West, or north of here - gas is more expensive about anywhere you go. I recently went to London where gas was DOUBLE the cost that it is here. Go to a third world country, anywhere in africa, south america, Europe, Canada, etc, and the gas is more expensive. The cost of living is ridiculously low here and I'm tired of hearing people complain.
But, if you're really interested in why gas is so expensive, I'll tell you. My dad is an oil consultant. He quotes the oil market for a living. If you want, check out his website ( http://www.fundamentalpetroleumtrends.com ) and look at the "About us" section. You'll find a picture of my goofy father, the founder. He's sells subscriptions to his weekly analysis report on where the oil/energies market is going. His buyers are mostly private investors but a few are high end companies such as F.C. stone (look 'em up on wikipedia). Long story short, I get to hear better information at the gas market at the dinner table then you will on CNN, Fox, or anything in Time or Newsweek.
THE SHORT TERM REASON
Gas prices rely much less on political situations (there are a few exceptions, such as the British hostage situation in the middle east) and oil companies jacking up the prices, and much MORE on how efficiently the refineries are running throughout the united states. Currently there are three major refineries - one in Sweeny Texas, one in Mckee Texas, and one in Chicago - that are all down or not working at full capacity (there are several others, though these are the big ones).This is why gas prices are currently so expensive in the Midwest. Yes, its as simple as that. We have the raw oil, we just can't refine it very efficiently to produce gas. High prices are also closely related to the coming summer, though I'm sure you all know that.
THE LONG TERM REASON
But why are so many refineries braking in the U.S., and more importantly, why are there so few?
The last oil refinery in the United States was built in 1973 in Lamont, Illinoise. Although several have been expanded upon and improved, this is astonishing. The reason? A new government agency was now putting higher restrictions on creating refernies: The Environmental protection agency. The result? Gas companies in the U.S. decided it was cheaper to simply drill for more oil rather then creating more refineries, and the United States now has the same number of refineries as they did in 1973 (albiet more efficient and higher producing ones). This means there's less gasoline, and gas companies can charge more money for it.
Along with these restrictions on creating safer and cleaner refineries, the EPA decided to make the grade of gasoline cleaner - meaning gas companies now had to produce higher quality gasoline that wouldn't pollute the air as much. However, instead of forcing gas companies to produce the same grade of gas nation wide, which would be more efficient and cheaper to refine (MEANING CHEAPER GAS) they struct a deal - the quality, and thus pollution level of the gas, would be decided on from state to state and county to county. This means that the gas restrictions on gas quality in Kansas are different from New York or Oregon. The result is there are over 300 different qualities of gasoline nation wide, because everyone has different laws deciding what pollution level of gas they can have. This is HUGE problem - refineries have to produce all of these different types of gas and its a terribly inefficient process.
Now, on why all of these refineries are currently braking: Part of the problem I talked about above - there simply aren't enough refineries. If we had more, it wouldn't be such a big deal when one breaks. However, there is another theory, and it has to do with how oil companies do maintenance. Each refinery has to have maintenance done on it every couple of years. This is a costly process, every time you shut down a refinery to perfrom maintenance you're losing money. So, the gas companies don't maintain them for five years then something important breaks. Oh shit. Now they rush to the nearest parts supplier and beg them for the part, though usually to manufacture what they need it takes a couple weeks. Bing - gas prices rise because now there's less supply. Another reason is that its cheaper to have the maintenance team go from one refinery to the next, rather then fixing one, waiting a year, then fixing another. This would mean the maintenance team would have to fire/rehire people, and this costs money. So instead the companies move from one refinery to another, and what you have is a 10 refineries down for at least a month each over the course of the year. BING - gas prices reach 10 dollars.
Who do we blame? Blame the EPA for creating stupid policies in the 70s. Blame the Gas companies for trying to save money on when maintaining their refineries. But most of all, blame your fucking selves- because its YOU who polluted the atmosphere and created the need for the EPA in the first place, its YOU who lives in the country that has the lowest Miles per gallon cars in the nation, and its YOU who chooses to drive rather then walking, riding your bike, taking the bus, or carpooling.
Hell, if we reduced our gas consumption by just THREE PERCENT, the market would collapse. It happened before during the golf war - gas consumption dropped three percent and price per barrel of oil when from 35$ to 15$ a gallon. This is HUGE! Tha'd be like prices going from 2.20 a gallon to 1.30 in a matter of weeks.
Finally, this I beleive is the answer to all our problems in the middle east - U.S. market security on oil. Want peace in the middle east? Drive a more efficient car or just use less - if the price of gas became that cheap Saddam and the surrounding dictators would be fucked. GAS IS THEIR ENTIRE MARKET! Their countries would collapse, and we wouldn't have to spend billions of dollars on a war to remove them. We wouldn't be so worried about whats going to happen to our oil (and invading a country) if we weren't so damn dependant on it.