Friday, December 30, 2011

High Gasoline Price

In my last post, I alluded to the possibility that fuel refined from the Keystone XL pipeline will never reach U.S drivers' tanks.  Furthermore, I suggested that if we really wanted to reduce the price of gasoline here at home, we would stop selling gasoline overseas and instead increase the supply here.  As we know, if we increase the supply, the price will go down.   At least short supply has been used as an excuse for the high price, so it only stands to reason that if we increase the supply, the price will go down.

But do we really export that much.  After all, we are a net importer of crude oil.  In fact, we continually hear that we need to increase our domestic supply in order to reduce our dependency on foreign oil.  So, we must really need ALL that foreign oil we import.

Well, this article has just come out.  It is titled, "In A First, Gas And Other Fuels Are Top US Export".

Not only are we a net exported of gasoline and other fuels, it is the TOP US EXPORT.  That means we export more refined fuels than anything else.  Top export.  Numero Uno.

The numbers in the article are a bit confusing.  They keep using different units, like barrels, gallons, days, and  months.  Let me put everything on a common basis using 42 gallons/barrel, 12 months/year, and 365 days/year so that we can see just how much fuel we are sending out of the country and how that relates to what we bring into the country.

We import 3.2 billion barrels of oil per year.  (2.7 billion in 10 months)

We export 1 billion barrels of fuel per year.  (117 million gallons per day)

According to the Texas Oil & Gas Association, on average we get 0.78 barrels of fuel (gas, diesel, jet fuel) per barrel of crude oil.

Thus, our fuel exports use 1.3 billion barrels of crude oil per year.  At $100 per barrel, that is $130 billion dollars flowing to other countries.

So, what happens if we stop exporting fuel.  That kind of depends on what we do.

  1. We could reduce our crude oil import by over one-third and not affect our domestic supply of fuel at all and possible drive down the world price of crude oil.
  2. We could use the fuel we are exporting to increase OUR domestic supply of fuel and drive down the price of gasoline.
If the Keystone XL pipeline is completed, the oil it brings into the US could be used to offset oil imports from other countries, or assuming refining capacity is available, it could be used to increase OUR domestic supply of fuel, or it could be used to increase our fuel exports.

Let's assume the refining capacity is available.  The oil companies have a choice.  One, increase domestic supply,drive down the cost of gasoline, and possible make less money, or sell it on the world market and make more money.

What do you think they will do?

Wednesday, December 28, 2011

Rick Perry Thinks...

 Canada is part of the United States. Talking about the Keystone XL pipeline, he said:

“Every barrel of oil that comes out of those sands in Canada is a barrel of oil that we don’t have to buy from a foreign source,”

Ahhhh, Rick.  Canada is a foreign source.

Furthermore, it is questionable whether the Keystone XL pipeline will have any significant effect on our dependence on foreign oil (other than Canadian foreign oil).  According to presentations to investors,  Gulf Coast refiners plan to refine the cheap Canadian crude supplied by the pipeline into diesel and other products for export to Europe and Latin America. Proceeds from these exports are earned tax-free. Much of the fuel refined from the pipeline’s heavy crude oil will never reach U.S. drivers’ tanks. (Source)

Note:  The US is already a net exporter of refined oil products.  Want to reduce the price of your gasoline?  How about we stop selling it overseas, and increase the supply at home.

Fat chance of that happening!

Tuesday, December 27, 2011

It Is Time For The Breakup

Breakup of the large media companies.

90% of the American media is owned by SIX corporations.  In the 1980's there were 50.  Now there are 6.  What does it mean?  Check out the graphic below.

Source: Frugal dad

Thanks, Obama

Thanks to:  The Best Article Every Day.

Friday, December 23, 2011

Republican Statement Of The Year

From Jon Kyl's staff after he said on the Senate floor that abortion is "well over 90% of what Planned Parenthood does."

"...his remark was not intended to be a factual statement..."

 I think that statement pretty well sums up republican comments on most topics.

Thursday, December 22, 2011