A couple of points--
--The refineries had to install more equipment to product the ULSD fuel, as the article gave the costs. This equipment can only process a specified amount, so when demand rises, they can't produce more. Gas stations can offer both LSD and ULSD only if they have separate tanks and pumps for each, and most don't, so only ULSD is offered.
--The refineries are limited in the mixture of products they can produce. Even with very high diesel fuel demand, they're limited in how much production they can switch from other products. With the reduction in gasoline demand due to fewer miles driven at these high gas costs and slower driving, if gasoline demand is so low that the refiners that buy crude at these high prices aren't making money on gasoline, they must reduce their refining levels, thus a possible tight diesel fuel market and maybe spot shortages. (Some integrated oil producers are getting fat on their crude oil reserves getting today's prices, and refining that cheap crude to sell at high prices. Some refiners that don't have crude reserves pay these high crude prices need their usual profit margin on fuels to make anything.)
I'm free of prostate cancer for 5 years now.
All men over age 50 should get an annual PSA blood test. Mine had a low reading, but the yearly jump was significant. The biopsy showed cancer just entering the aggressive stage. Dr. Hackenslash removed it.
I recently wrote an opinion-editorial piece on gas prices for our local newspapers. Not all of them will print it, so I'm sending it to my email newsletter subscribers. If you haven't seen this in your local paper, please feel free to share it with your friends.
Sincerely,
Charlie Wilson
Member of Congress
Ohio's Sixth District
Gas Pricing
"This doesn't make sense to me."
The number one thing people want to discuss with me is the price of gas. With gas prices up 130% in Ohio since 2001, I know working families and businesses are hurting badly.
There is no magic bullet and I believe that both long and short term solutions need to be examined.
SHORT TERM:
In the short term, consumers need an immediate break from crushing prices at the pump. This week Congress passed H.R. 6022, the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008. If signed into law the measure would suspend the fill of the Strategic Petroleum Reserve (SPR) through the end of the year, as long as the price of crude oil remains above $75 per barrel. The Senate also passed similar legislation. I am eager to get the two bills merged and sent to the President as soon as possible.
This is good common sense legislation. The SPR is 97% full. That’s enough to meet our security needs. Filling the SPR takes 70,000 barrels of oil off the market each day. If you put that oil into the market, experts project this could lower gas prices by 5 to 24 cents per gallon. In 2000, just the announcement of an SPR moratorium dropped oil prices in the market from $30 a barrel to $20.
I hope the President signs the bill. I fear he won’t. Democrats have been calling for him to stop filling the SPR to lower gas prices. He recently said that the “the cost-benefit analysis” of immediate action for consumers did not persuade him.
I’m not sure how much more persuading he requires. The Reserve has been tapped before by President Bush, President Clinton, and the first President Bush.
LONG TERM:
Unfortunately, like you, I have more questions than answers when it comes to why gas is so expensive. As we look for long term answers, I believe it’s important we start cutting through the smoke and mirrors and not swallow the old argument that this is simply a situation where supply is not keeping up with demand.
The Energy Information Agency (EIA) says just the opposite is true. In January-March 2008, the EIA reported that gasoline supplies outpaced demand. In January and February 2008 we imported more gasoline that we did in January and February 2007. At the same time, U.S. gasoline demand was down by .8% compared to spring 2007. With higher inventories and reduced demand, how can prices still have shot up to nearly $4 a gallon?
At a recent briefing held by my colleague Congressman Bart Stupak of Michigan, I was particula rly concerned to find out that as our truckers are hurting for diesel our refineries have been shipping 93,000 barrels a day to Western Europe and 182,000 barrels a day to Latin America. Why are we shipping it overseas when we need it here?
Many people who call me, write me, or stop to talk to me at home want to know why there aren’t more refineries. Indeed, in the last 27 years the U.S. has cut by more than half its number of refineries. A new refinery has not been built since 1976. Like many of you, I believed that the government must be making it too hard to build refineries.
But, during Rep. Stupak’s briefing, I learned of internal documents from Mobil, Chevron and Texaco from 1995 and 1996 that specifically advocate that these companies limit domestic refining capacity in order to drive up prices. And at a hearing before the House Select Committee on Energy Independence and Global Warming earlier this month, executives from the major oil companies testified that none of them has any plans or proposals to build new refineries. This doesn’t make sense to me. Big Oil is enjoying record profits. Exxon Mobil made more than $40 billion last year. If the numbers of refineries are contributing to the alleged supply problem, surely Exxon can afford to build a refinery.
Finally, many people want to know why more oil isn’t being drilled. I’d like to know why of the 42 million acres of federal land currently leased by oil and gas companies, only about 12 million acres are actually being drilled to produce oil and natural gas.
People often advocate for less government, but the sheer volume of unanswered questions surrounding gas prices today makes a great case for increased government oversight. I want to know who has been watching all this time to let s uch questions go unanswered. Is it possible that the reason our gas prices are so high is, in part, because of good old fashioned corporate greed?
In addition to supporting alternative energy sources, like coal-to-liquid fuel, I argue that a long term solution to protect us from out of control gas prices is to have a good watchdog in place. It is clear to me that increased transparency and oversight are needed as our energy supplies are collected and brought to market. I’m co-sponsoring legislation that will do just that. Rest assured also that I’m seeking answers to all of the questions I raised in this column. Like you, I’m fed up with the high price of gasoline.
2008 Silverado D/A,CC 4x4 ,3.73,IBC LTZ+
2008 322FKS Jayco
17.5 Nova Craft canoe (49 lbs.)
2 Trek 1500 mountain bikes
Honda EU2000i
It must be time to go, the suns out and I've got a full tank of diesel and an empty charge card!
NO ONE WAS CHECKING THE OIL!
There is oil all over the US, California, Wyoming, East coast and west coast.
The real problem is that the dipsticks are in Washington DC
Tomman... here is the reason why prices are so high... China and India, the two most populated places on the planet are competing with Us on the world market for Oil.. As you know, alot of our good jobs went to China and to India. This was what Ross Perot and Pat Buchanon were talking about if Nafta and Gatt were made into law.(Remember the term< "A Giant Sucking Sound?) Not only did this happen, but the same President who signed this was the same who Gave Red China "Most Favored Nation Trading Status".. The President was Bill Clinton! . Another problem is Environmentalism gone amuck..We have not been allowed by organizations such as the Sierra Club to Build a new Refinery in over 30 years... so even if we had the supply, we could not refine enough to meet demand..Now you say that 70000 barrels of oil will make a difference. Anwar is estimated to bring at least 1 million plus a day, but the liberals say, "this won't make a difference in prices...They say no to drilling there,,, The liberals also say no to drilling off the coast of California, or off the east coast or the Gulf of Mexico.. They say no to drilling ANYWHERE IN THE United States, )note that China is drilling 90 miles off our shores at the present time. Out of millions of acres in Anwar, drilling would be in only about 20 thousand acres...The liberals don't want NUCLEAR power either, so we use Natural Gas to fire powerplants for electricity!!! Natural gas should be ONLY to heat homes and business'..NOT TO be used to heat water to turn electric generators...The Liberals Don't want to use Coal, they say it's too dirty..... So, no drilling for our own oil, no Refineries, NO coal, no nuclear power.. You know something, this could not be more endangering to us than if a Foreign enemy did this!!! So, here is where we are, Bill Clinton gave our good jobs away to our enemy, Red China, George Bush, for all the jobs that cannot be exported, wants "Guest Workers"(cheep labor)"... Oh, he says they must be offered to Americans First.. By this I guess he means this example... Bobl, we know you get 30.00 per hour for what you do, but Jose here will do your job for 10.00 per hour, do you still want your job"?..America .... WAKE UP!!!! YOUR COUNTRY IS BEING GIVEN AWAY !!!! Along with your way of life!!! Your Borders are not sealed, your military secrets are given to your enemies, your jobs are leaving and have left and they want Guest Workers to steal what's left here!!! Now your way of life is changing... They WON'T do a Darn thing about gas prices,,, Do you really think they care?..How will a "Windfall Profits tax help YOU??? How will pointing fingures at the oil companies who make .08 cents per gallon while the Governments make about .70 cents per gallon help you??? WE NEED A NATIONAL STRIKE!!! No one goes to work for at least a week... No stores open, no truckers deliveries, no nothing!!! Maybe they will listen, but probably not...They ARE destroying the middle class... They divided us up so they could do this...They have us arguing amongst ourselves while they implement this ONE WORLD ORDER...They are dividing and conquering..... think about it...
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