Oil

[Stewy]

(05-31-2022, 10:24 AM)grampahol Wrote: I haven't read this entire thread..I probably will later, but something to add.. In politics for your average idiot voter in the US presidents don't set oil prices and they have almost zero responsibility for the price going up or down short of declaring WWIII and sending it all to military uses.. That still might happen, but I kind of doubt it.. I've been waiting for WWIII my entire life, but the world has drastically changed since WWII..You can thank the makers of your locally produced and operated nuclear bomb for that.. <--sarcastic take on such foolishness)
Oil prices are set on the global stage by the long line of people and corporations in the post by Stewy way back on page 1.. 
The release of the 'strategic oil reserves' in the US is intended for a domestic audience of dumb voters to help prevent panic buying and hording..It doesn't affect the price of gasoline short nor long term. It's a feel good gesture at best..
They don't mention the oil producers that go out of business and sell of their assets when prices tank nor that refineries for the most part are set up to refine certain types of oil. Some refineries shut down production, some don't and  getting them back online is a long term investment. Oil types are not all the same. You don't refine tar sands oil in the same refineries that refine sweet crude..  Those kinds of refineries are hard to find and I'm not sure there are ANY in Texas though I could be wrong on that part. Tar sands pipeline was a joke.. It sold to dumb voters...not to mention there's only a very limited amount of it in one small section of Canada..
Short answer there is no red telephone on Biden's desk that lowers nor raises the price of gasoline at the pump..Never was and never will be.. 

Thanks for adding to the thread.  You can throw the antics of the Senators bringing Oil Co. Exec's up to the Hill and making them explain high oil prices.  Just another show for the voters to pass the buck on blame.

Personally I don't think any of them have a clue what really sets oil prices as I explained on page 1.  Either they're ignorant or they know it is too complicated for the common voters patience and don't want to try and explain it.  Either way trying to pass the buck on blame is their tactic of least resistance.  It wouldn't surprise me if 99% of Washington doesn't understand how oil prices work and probably most of the Dpt. of Interior as well.  Someone has to get it, but no one is giving them a microphone.

I agree 100% that releasing oil from the SOR is a meaningless gesture.  So if they release 1 mbopd (million barrels of oil per day), yet it has been shown that OPEC is running at a consistent 800k/day shortfall from their projections.  AND Europe has just shut off 1mbopd from Russia, so while Russia may find another buyer somewhere that is a  1.8mbopd shortfall on production vs. demand, that does not fix the problem....at all....and only empties our strategic reserves, which they then have to replace.

So is the govt telling lies, showing incredible ignorance or willfully trying to manipulate an ignorant voting populace.  I really don't know.

(05-31-2022, 05:16 PM)BigPapaKain Wrote: I work at a refinery and can confirm everything said here about refineries in general.

You'd be surprised at how fragile the damn things are. You hit the wrong control valve and the whole place goes down. HARD. Hell even planned shut downs take awhile to get single units back up and running.

Last time we had a full oil out, it was about a month and a half before the whole refinery was back up and running, and even then it was another 3 weeks before it was all considered stabilized. THAT WAS A PLANNED SHUT DOWN. Imagine the havoc covid ran on smaller refineries who decided to shut down suddenly and wait it all out. Oof.

Thanks for adding to the discussion.

Let me throw in a parallel point.  The POTUS has been working toward lifting JUSTTIFIED humanitarian sanctions on Venezuela with the concept of allowing them to replace lost crude on the market.  

- Firstly, as BPK mentioned refineries are designed to certain types of crude.  They cannot and do not make switches easily, quickly or cheaply.  Venezuela crude is extremely thick (heavy), very dirty (lots of sulfur), and very expensive to refine.  Offering up 500k instant barrels (or whatever the number is) to US refineries, who aren't setup for heavy dirty crude, doesn't fix the short term problem.

- Secondly, lifting humanitarian sanctions just to reduce oil prices sounds a bit hypocritical to me.  

- Thirdly, as I said, Venezuela crude is some of the dirtiest on the planet to produce.  See the attached graph.      
It takes energy to produce a barrel of oil.  If the oil is thick or dirty, then that means more energy is required to refine it.  If the country doesn't give two craps about the environment, which Venezuela does not, then they'll flare the extra gas produce and/or release the gas (methane) that breaks out of the oil, directly to the atmosphere, which means more pollution.  This is especially bad because methane is by far a worse greenhouse gas compared to CO2.  So turning to Venezuela instead of supporting US production, which are some of the cleanest barrels in the world, the govt is displaying the epitome of hypocrisy.  The POTUS told his far far left voters that he would "tear down the US Oil Industry" (quoted from pre-election campaign speeches) and since he can't afford or is unwilling to go back on that, the POTUS looks for ANY other solution including allowing a Venezuela govt, sanctioned for humanitarian abuses to supply the dirtiest barrels on the planet, instead of supporting US production.  This is environmentally cutting off ones nose to spite ones political face.

- Lastly, if our govt really wanted to help the environment then they'd pass regulations to eliminate flaring and direct release of methane to the Atmosphere in the Rockies and Permian basins.  Note:  Both are already illegal in the US Deep Water Gulf of Mexico, which has one of the smallest carbon footprints per barrel in the world.  Yet, the gov't is holding back exploration and investment in the USGOM and turning to the dirtiest barrels on the planet.  And then they turn around and point the finger at the oil companies saying they're the problem.