Quote:
Originally Posted by Cowboy89
All you have to do is look at gasoline inventory reports. They go up because demand is up. The price is high because the supply is tight.
It's easy for people who don't understand the supply chain to question why something costs more a couple of weeks later. Afterall when talking about energy most people's experience as to how it happens entails flicking a light switch and turning on a gas pump and realiably it's almost always there and back in the 1980s and 1990s in the range of what was considered a 'reasonable price'. From where they stand nothing's changed and they are dumbfounded that somehow flicking on that same light switch and turning on that same gas pump could concievably cost more than it did last month, last year, last decade.
Thing is the geology, and engineering restraints on the energy business has never been more challanging than the last few years (The world isn't the same), and we're relying on pretty much the exact same refining and marketing infrastructure as the 1970's to make it happen. We've reached the capacity of where that infrastructure can take us and on top of that the Chinese and Indian people are now starting to up their oil and gas consumption towards the levels you or I use thus bidding up the cost of Crude oil. It's possible to continue to supply your gas needs into the future by building more refineries and pipelines etc, but it's only now (due to higher gasoline prices) economical to do so. It'll take some years to build more infrastructure to accomidate increasing demand. Even then don't expect a break at the pump because the enviro crowd will be out in full force between now and then ensuring you don't pay any less to pollute.
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I have read a number of times that gas companies have limited the number of refineries in order to keep their profits high, i'm no expert on it but doing a quick search on the internet i found many links related to this. If this is the case then how can anyone really defend these companies?
Here is a clip from the story
“Large oil companies have for a decade artificially shorted the
[COLOR=#0000cc! important][FONT='Lucida Grande','Bitstream Vera Sans',Verdana,Arial,Helvetica,sans-serif][COLOR=#0000cc! important][FONT='Lucida Grande','Bitstream Vera Sans',Verdana,Arial,Helvetica,sans-serif]gasoline [/FONT][COLOR=#0000cc! important][FONT='Lucida Grande','Bitstream Vera Sans',Verdana,Arial,Helvetica,sans-serif]market[/FONT][/COLOR][/FONT][/COLOR][/COLOR] to drive up prices,” said FTCR president Jamie Court, who successfully fought to keep Shell Oil from needlessly closing its Bakersfield, California refinery this year. “Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty.”
Interesting read. I see what you are saying with the oil and gas use increasing as countries that used little of either earlier are now using more. If there was an affordable alternative then i would have no reason to dislike the oil and gas companies.