We can tell Saudi Arabia’s dictator and the most predatory oil companies to go screw themselves at the same time we do the best thing for an average working Americans
In terms of 100% domestication of our petroleum industry, one thing we are reportedly short on is refining capacity for certain fractions such as solvents used in semiconductor production. For these, as I understand it, we export light crude and import the produced materials. But there's no reason we can't build out our custom refining capacity here, circumventing any international price pressures.
I've spent 40 years in oil. You are right. Some other details. There has NEVER been any ban on exporting refined products, only crude oil.
Refineries make a range of products. When we export a lot of - maybe that semiconductor wash, we also make more of every other liquid in the distillation tower - so exporting chip-wash lowers gasoline prices.
Exporting US crude is basically zero profit, because while we have a lot of oil, we ran out of cheap oil over 50 years ago. We have to sell at nearly zero profit to export crude.
Gasoline has been cheap because they have to run the refinery to get the high demand stuff. That's why diesel is expensive now - many more trucks on the road than 30 years ago. Thank you truckers for lowering gasoline prices. Please delay the switch to zero emissions ammonia, which we now know works great as diesel fuel.
To reduce the price of gasoline, we need to ban exports of crude oil, incentivizing oil companies to export more refined products, which will be more profitable with cheaper crude oil.
Capitalism really works if the playing field is kept level and you pull the right levers
Probably because the greedy bastards can make more green by exporting it? Same with our trees in Canada - we too have plentiful supply, but we get the shitty stuff here at top dollar, while they ship the good wood to foreign countries. Go figure.
Great post. Nails the real point we often forget, follow the money. It's usually the focus and always a main factor.
I've worked decades in oil. It's a bit complex, so I'll jump to the last sentence.
Exporting crude oil loses money, but dramatically increases profits in refined goods such as gasoline, diesel, paint thinner, and that stuff in the medicine cabinet you don't quite trust.
Losses selling crude at or below cost are minimal compared to the additional profits selling refined goods at higher prices.
This is why the USA banned exporting crude oil. Exports of refined products have never been limited, except maybe during WWII, and I do mean maybe.
Substitute pine for crude oil and construction grade milled lumber for refined oil products, and change a few names, and the same story works for pine. I suspect it's the same for wheat framing and any market sector large enough that 1% cost reduction buys a yacht, or two.
I love Canadian pine, and I love that we can get such high quality here in the USA. When I've lived in Canada, always small towns, we were told that our market was so small they didn't need it at all, hint hint, so we should be delighted to get the rejects. Yeah, and we should be grateful that Tim Horton's blessed us with ONE store.
This is the real "American Horror Story" fit for the Halloween season in every way.
We watched the same thing happen with natural gas. The pipeline and LNG project we fought started as an import, but was switched to export. Owned by Canadians, this meant Americans took all the risk and pollution for the gas transfer, but got none of the benefits!
The industries try with safety and pollution, but EVERYTHING gets old and starts breaking. PEOPLE make mistakes, and then you have a catastrophe to go along with the pollution and climate crisis it's already creating. That is NUTS too.
I used to end every letter to the editor or congressional member with: "It's insane to send fossil fuel from one end to the other of a tired, hot planet!".
Americans lose---they absorb the expense, health risks, and environmental damage while the fossil fuel fat cats laugh all the way to the bank.
Ceasing oil purchases for political reasons is nearly ideal. It uses capitalist incentives to drive results. There is no better incentive than a thin wallet.
I'd have no problem buying oil from the KSA if they didn't spend the profits on terrorism and killing Yemenis.
Don't forget that as bad as the Russia invasion of Ukraine is, more people die every day in the USA/KSA/UAE war on Yemeni women and children.
OK Thom, get out your salt shaker. I'll give you a moment............OK, some oil details you never hear.
Oil is expensive to ship. It's common practice to do something like, though not necessarily exactly this, Company A in - let's say East Africa - sells X BBLS to Japan. It's a long trip, so they might call company B in Alaska and have them ship 3 tankers to Japan while company A ships three tankers to India on behalf of Company B.
A lot of oil is imported and exported around the world like this.
I have seen a contract change hands from Nigeria to Ghana to Ivory Coast to Paris to Houston before all the numbers work.
I have a totally different opinion. Let's hire oil companies to develop and sell oil on federal lands, for fixed costs plus a generous sales commission. We let them deduct expenses plus they get the first 50,000 BBL per day to sell and 20% of the profit from every additional BBL sold as crude and 20% of the profit of any refined product sold, such as gasoline. With 20% commission, Their incentives become minimizing price and moving to zero pollution alternatives, not maximizing price and drilling more.
Norway has done this since they started and now have over $200K per citizen in the bank, growing fast. Let's do the same in the USA.
We taxpayers would get 80% of any fuel price increase, and MOST fuel is used in commercial shipping, so while we address high prices, huge profits will pour into our tax free savings accounts. If people are having trouble making ends meet, we can designate and separate "wind fall profits" and allow people to access them. When prices spike, they would drive for free.
If oil companies were restricted to just making profits, but left alone to compete with whatever rules applied to every competitor, they would do fine.
In terms of 100% domestication of our petroleum industry, one thing we are reportedly short on is refining capacity for certain fractions such as solvents used in semiconductor production. For these, as I understand it, we export light crude and import the produced materials. But there's no reason we can't build out our custom refining capacity here, circumventing any international price pressures.
I've spent 40 years in oil. You are right. Some other details. There has NEVER been any ban on exporting refined products, only crude oil.
Refineries make a range of products. When we export a lot of - maybe that semiconductor wash, we also make more of every other liquid in the distillation tower - so exporting chip-wash lowers gasoline prices.
Exporting US crude is basically zero profit, because while we have a lot of oil, we ran out of cheap oil over 50 years ago. We have to sell at nearly zero profit to export crude.
Gasoline has been cheap because they have to run the refinery to get the high demand stuff. That's why diesel is expensive now - many more trucks on the road than 30 years ago. Thank you truckers for lowering gasoline prices. Please delay the switch to zero emissions ammonia, which we now know works great as diesel fuel.
To reduce the price of gasoline, we need to ban exports of crude oil, incentivizing oil companies to export more refined products, which will be more profitable with cheaper crude oil.
Capitalism really works if the playing field is kept level and you pull the right levers
Probably because the greedy bastards can make more green by exporting it? Same with our trees in Canada - we too have plentiful supply, but we get the shitty stuff here at top dollar, while they ship the good wood to foreign countries. Go figure.
Great post. Nails the real point we often forget, follow the money. It's usually the focus and always a main factor.
I've worked decades in oil. It's a bit complex, so I'll jump to the last sentence.
Exporting crude oil loses money, but dramatically increases profits in refined goods such as gasoline, diesel, paint thinner, and that stuff in the medicine cabinet you don't quite trust.
Losses selling crude at or below cost are minimal compared to the additional profits selling refined goods at higher prices.
This is why the USA banned exporting crude oil. Exports of refined products have never been limited, except maybe during WWII, and I do mean maybe.
Substitute pine for crude oil and construction grade milled lumber for refined oil products, and change a few names, and the same story works for pine. I suspect it's the same for wheat framing and any market sector large enough that 1% cost reduction buys a yacht, or two.
I love Canadian pine, and I love that we can get such high quality here in the USA. When I've lived in Canada, always small towns, we were told that our market was so small they didn't need it at all, hint hint, so we should be delighted to get the rejects. Yeah, and we should be grateful that Tim Horton's blessed us with ONE store.
This is the real "American Horror Story" fit for the Halloween season in every way.
We watched the same thing happen with natural gas. The pipeline and LNG project we fought started as an import, but was switched to export. Owned by Canadians, this meant Americans took all the risk and pollution for the gas transfer, but got none of the benefits!
The industries try with safety and pollution, but EVERYTHING gets old and starts breaking. PEOPLE make mistakes, and then you have a catastrophe to go along with the pollution and climate crisis it's already creating. That is NUTS too.
I used to end every letter to the editor or congressional member with: "It's insane to send fossil fuel from one end to the other of a tired, hot planet!".
Americans lose---they absorb the expense, health risks, and environmental damage while the fossil fuel fat cats laugh all the way to the bank.
Ceasing oil purchases for political reasons is nearly ideal. It uses capitalist incentives to drive results. There is no better incentive than a thin wallet.
I'd have no problem buying oil from the KSA if they didn't spend the profits on terrorism and killing Yemenis.
Don't forget that as bad as the Russia invasion of Ukraine is, more people die every day in the USA/KSA/UAE war on Yemeni women and children.
I did not know that. Ugh. Thanks, Stabilizer
OK Thom, get out your salt shaker. I'll give you a moment............OK, some oil details you never hear.
Oil is expensive to ship. It's common practice to do something like, though not necessarily exactly this, Company A in - let's say East Africa - sells X BBLS to Japan. It's a long trip, so they might call company B in Alaska and have them ship 3 tankers to Japan while company A ships three tankers to India on behalf of Company B.
A lot of oil is imported and exported around the world like this.
I have seen a contract change hands from Nigeria to Ghana to Ivory Coast to Paris to Houston before all the numbers work.
I'm sending this to every congressman/woman I can! 😡
Remember to include a thick envelope stuffed with Rubles for half of them, dollars for the other half.
I have a totally different opinion. Let's hire oil companies to develop and sell oil on federal lands, for fixed costs plus a generous sales commission. We let them deduct expenses plus they get the first 50,000 BBL per day to sell and 20% of the profit from every additional BBL sold as crude and 20% of the profit of any refined product sold, such as gasoline. With 20% commission, Their incentives become minimizing price and moving to zero pollution alternatives, not maximizing price and drilling more.
Norway has done this since they started and now have over $200K per citizen in the bank, growing fast. Let's do the same in the USA.
We taxpayers would get 80% of any fuel price increase, and MOST fuel is used in commercial shipping, so while we address high prices, huge profits will pour into our tax free savings accounts. If people are having trouble making ends meet, we can designate and separate "wind fall profits" and allow people to access them. When prices spike, they would drive for free.
If oil companies were restricted to just making profits, but left alone to compete with whatever rules applied to every competitor, they would do fine.