From Investor's Business Daily: Mostly a screed against the current administration, but some interesting tid-bits on the oil future.
"The U.S. passed Saudi Arabia as the world's largest petroleum producer in November 2012, according to recently released data of the federal Energy Information Administration. Over the last five years, domestic oil output has risen 40% and continually outpaces projections. Last year, domestic output increased by 800,000 barrels per day. This is the largest increase in annual production since the first oil well was drilled in 1859 in Pennsylvania."
I wonder why gasoline is still so expensive? Could it be government meddling and regulations on the formulation of the gas and restrictions that are very costly for producers to implement? I do remember paying
22 cents a gallon for regular but that was back in the last century when I was a know it all college student and a dollar was worth a little bit more than it is today. Gosh, 40 years ago when I was paying 22 cents a gallon for gas, a Wopper, fry and a Cole was one dollar at Burger King. o_O
One big factor is that it costs a lot more to extract this new oil. That's why it's still there. At $40 those wells would not have been economically attractive. At $90, they are. And while US production is increasing, so is world demand, especially from places like China and India.
Could it be government
All of the reqts put on the refiners add to the price,' exactly how much who knows. But I don't think it's the major factor in gas being $3.75 instead of $1.25. And in general, having products like low sulfur diesel is a good thing. Remember when diesel was a lot cheaper than regular gasoline? And you got higher mileage so it was good all around. Now diesel costs more than premium.
Last week the Obama administration issued new gasoline reqts that are supposed to help clean the air. I think those are supposed to cost another 7 cents a gallon or so and go into effect in a few years. Just what we need, right? I mean what else can they come up with to burden an economy and consumers that are already struggling?
I wonder how much of the increase is from oil production on private land. My understanding is the federal government is being very slow on issuing permits.
My understanding is that most of the increase is on private land and the issuance of new permits on public land is down.
Since oil is a global commodity, no matter where it comes out of the ground, it's priced at the world price. If the U.S. produces more, the price of gasoline in the U.S. is not affected much, but more oil is exported to the world market. That helps the U.S. balance of payments. And, the only way to change the way that works is by federal regulation.
What the increased U.S. production really means is that the U.S. is a little less dependent upon the world supply of oil. Should Iran, Saudi Arabia, Liberia, Venezeuela or any other oil-producing country decide to stop selling oil to the U.S., the world market would adjust and our own production would temporarily help cushion the rise in gasoline prices. But there's still a high global demand for oil (China is increasing its consumption dramatically), so the world oil price is only going to go up over time. There might be some short-term blips, but forget cheap gas.
Since oil became a global commodity, I've always wondered why we're so anxious to pump more oil from our own wells when leaving it in the ground means we can sell it for more later on. It would also be nice to leave our kids and grandkids something of value instead of just the national debt.
Since oil is a global commodity, no matter where it comes out of the ground, it's priced at the world price. If the U.S. produces more, the price of gasoline in the U.S. is not affected much, but more oil is exported to the world market. That helps the U.S. balance of payments. And, the only way to change the way that works is by federal regulation.
Since oil became a global commodity, I've always wondered why we're so anxious to pump more oil from our own wells when leaving it in the ground means we can sell it for more later on. It would also be nice to leave our kids and grandkids something of value instead of just the national debt.
That's right. The days of Jed Clampett shooting at a rabbit and bringing up a gusher are history. I recall Saudis costing as much as $40 a barrel digging out of the desert and pipe lining. Oil might have to sell for more than $100 a barrel for shale oil to be profitable. I don't think a lot of our conservative commenters understand this. They think all oil is oil. We got plenty of it but it will cost more.
No Cousin Harry, all Americans are convinced that The Beverly Hill Billies is a documentary on a backwoods family that struck it rich in the oil lottery. ^_^
Yes, we've seen how well alternate types of fuel technologies have done. Yet another half billion dollar federally subsidized program has gone down the toilet.
I do so enjoy being evil Cousin Harry! I have some kittens to juggle later this morning and if I could find a puppy to drop kick, it would really make my day. I do miss clubbing baby seals, such a wonderful evil feeling of power over the helpless creatures. ^_^
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