Because the use of gasoline is, like NG & electricity, in many instances not a luxury or option but a necessity, what about, at least partially, changing the status of gasoline production to that of a public utility?
A lot of the oil they import is from their own foreign operations in Canada, various African countries, Malaysia, and other Asian countries, etc. However, the time for this is running out as more and more countries either jack up the royalties they extract or nationalize their whole operation. Venezuela, Ecuador, and Bolivia are good examples.
The big US and European oil companies are running out of new areas to explore and develop new supplies.
Crude Oil and Total Petroleum Imports Top 15 Countries
March 2008 Import Highlights: May 29, 2008
Monthly data on the origins of crude oil imports in March 2008 has been released and it shows that two countries exported more than 1.50 million barrels per day to the United States. Including those countries, a total of three countries exported over 1.20 million barrels per day of crude oil to the United States (see table below). The top five exporting countries accounted for 68 percent of United States crude oil imports in March while the top ten sources accounted for approximately 94 percent of all U.S. crude oil imports. The top sources of US crude oil imports for March were Canada (1.795 million barrels per day), Saudi Arabia (1.535 million barrels per day), Mexico (1.232 million barrels per day), Nigeria (1.154 million barrels per day), and Venezuela (0.858 million barrels per day). The rest of the top ten sources, in order, were Iraq (0.773 million barrels per day), Angola (0.384 million barrels per day), Algeria (0.247 million barrels per day), Ecuador (0.231 million barrels per day), and Kuwait (0.199 million barrels per day). Total crude oil imports averaged 9.618 million barrels per day in March, which is an increase of (0.012) million barrels per day from February 2008. Total crude imports for March include 0.035 million barrels per day for Strategic Petroleum Reserves (SPR).
Canada remained the largest exporter of total petroleum in March, exporting 2.542 million barrels per day to the United States, which is an increase from last month (2.464 thousand barrels per day). The second largest exporter of total petroleum was Saudi Arabia with 1.542 million barrels per day.
Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Mar-08 Feb-08 YTD 2008 Mar-07 YTD 2007
They buy it under contract, not at the spot market price. If Exxon negotiated a contract today, it would be at a price much closer to the spot market price. Any refiner paying close to spot market prices is getting hosed on the spread between raw materials price and end-item price.
The real point is that we need less, not more, government involvement in the energy business. The government would be under too much political pressure to drive down energy prices, which is exactly the opposite of what needs to happen at the moment. The current small increase in fuel prices is a good start, let's not interfere with the market when it's moving in the right direction.
Craig is right; oil prices are globally determined outside the US gas stations and the White House. The margins between buying the crude oil and refining and selling it are much less than in many other industries, such as clothing, software, etc.
On a previous post we showed gas prices around the world; there were a number of countries with artifically low gas prices, all SUBSIDIZED to keep the people happy and the governments in power.
The Romans gave the plebians "Panum et Circensus" (Bread and Games) to keep them from rioting. Americans need to weaned off cheap gas and face the real cost of importing petroleum and operating large, thirsty cars.
A gasoline utility would be as efficient as PEMEX the Mexican monopoly. Although the stations are clean and the tacos tasty, the whole organization is pitifully inefficient. With US labor rates, PEMEX gas would be unaffordable!
If you really want better control and government oversight of fuel pricing and speculation Google H.R. 4066, the Close the Enron Loophole Act.
This is a bill presently being sponsored by Peter Welch and co-sponsored by Christopher Shays : http://www...=h110-4066
H.R. 4066 would close the so-called "Enron loophole" and require government oversight of the trading of energy commodities by large traders to prevent price manipulation and excessive speculation. The bottom line is the Trading Facilities (ETFs) should comply to the same standards as other futures exchanges regulated by the Commodity Futures Trading Commission (CFTC).
If you really want some action on fuel price speculation, directing your support at that bill would have a positive effect. There is a lobbying website, I'll see if I can find the URI.
I'm not complaining, something needs to happen to reduce consumption. I would prefer higher prices to any type of government mandates. It will probably take closer to 5 years to reach $10/gallon.
No US government agency can control or regulate the international price of oil. Profit margins fluctuate from year to year in refining and marketing.
Even OPEC members say they essentially cannot set a price.
Years ago we had a "posted price" that OPEC set. Sort of like a "manufacturer's suggested list price". Various members would sell oil at a dicsount from this posted price.
As long as we have an unstoppable growing demand and a supply that, while adequate now, shows no sign of increasing very fast (no matter how much exploration), we have a pricing mechanism that now pays $132 for July 2008 oil. The same mechanism works for natural gas, coal, uranium, potash, and other commodities.
Congress is having hearings this very moment about oil prices; four US oil presidents are testifying that they do not set the prices, and compete with each other at the retail end. No congressman has mentioned Americans drive too large and thirsty cars, and if we all shifted to smaller cars, we would need to import very little oil.
Like many times before, they will find no US villain, lots of foreign speculators, and the overall laws of supply and demand working as they should. And nobody is cooking his books, Enron-style!
four US oil presidents are testifying that they do not set the prices, and compete with each other at the retail end.
And four US oil presidents have all LIED. They don't set the price for oil they buy..but they sure do set the price for the gas they sell. They all testified that they didn't know what their annual salary was too. Which then one congressman said "Must be nice to make so much that you don't know how much you made." It reminds me of the congressional hearings when they had the Tobacco CEO's before congress...where they all swore under oath that they believed that Smoking was NOT bad for you.
Like many times before, they will find no US villain, lots of foreign speculators, and the overall laws of supply and demand working as they should. And nobody is cooking his books, Enron-style!
That doesn't mean the public isn't getting screwed. If oil was a FREE market (which it clearly is NOT) then the supply and demand could work. But because it's NOT a FREE MARKET...we the consumers are at the whim of big oil. They are showing the world who's in CONTROL. It's akin to the UAW going on strike and shutting down the Big Three....showing everyone who's in CONTROL. Big oil has a stranglehold on the US (the world for that matter) economy. They are proving that. And as consumers..there is almost NOTHING we can do about it. I HAVE to buy gas for my vehicles...and oil for my furnace from them. The market is closed and there is NO COMPETITION. They no longer compete against each other. There's no need to. They've sliced the country up to their own regions. Prices are set and profits are the highest in the world (Exxon - 33B the first quarter of 2008, they are expected to reach 100b in PROFIT by the end of the year...the first company in the WORLD to ever do that...and total sales are DROPPING).
The lack of freedom in the market is mostly the lack of access to develop more reserves. We stated in a previous post that over 75% of the world's remaining reserves are in the hands of foreign National Oil Companies and off-limits to US and European firms and only accessible on the terms of the host countries. These countries really determine the overall long term supply vs demand relationship. If US and European firms had unlimited access to drill wherever they wanted, the supply cushion would be much greater and oil would trade at around $55-%65/barrel, the cost of developing high cost reserves.
In other words, the current oil price is the result of uncertainty of future supply in the face of rising demand. The difference between the $134 today and the $60 or so that a steady supply/demand situation needs is part speculation, part fear of supply interruption and part fear of a collapse of the US dollar.
Much has been made of US firms wanting to access the Alaska wildlife area, coastal areas, etc. These areas cannot begin to close the oil import gap of the US or affe ct the price of oil. Deep drilling in the Gulf of Mexico is technically now possible, and considerable oil is still available from there. It will take quite a while, however to develop these super-deep reserves.
The benefit of these sky-high oil prices is that the US can now start looking at technology to turn its immense coal reserves into oil, and bio fuels from cellulose and twitchgrass will soon be economic.
Every developed country (even those with lots of oil), except the US, has put in place curbs on gasoline and non-commercial diesl consumption through gas guzzler taxes, total tailpipe emissions, fuel taxes, road taxes based on weight and horsepower, and in Japan's case, the physical footprint to park the car.
It's time Americans stop living in a make-believe world where resources are made available by magic regardless of the needs and desires of the 6.2 billion other residents of this planet.
Haven't you noticed....... There really aren't public utilities anymore after deregulation in many states. Sure there is a company that distributes and bills the power, but generation has been spun off into basically unregulated companies. Electric power is going the way of gasoline.
Also, if you do have municipal utilities where you live, your city government can raise utility rates instead of raising taxes. It becomes a venue for hidden taxes.
Converting oil companies to public utilities by government fiat, Venezuela, won't do a thing for crude supply. Currently, Canada, Saudi Arabia, Mexico, Nigera and Venuzuela are, in order, top suppliers and are 2/3 of crude requirements. Recall, you were solidly for no drilling USA or offshore for any reason any time. We are buyers not in control of the world petroleum market. USA previously enthusiastic buyers of gas hogs when gasoline was $2.50 per gallon now in the hurt locker at $4.00 and rising. Then comes Dog and Pony Shows in Congress with the oil companies. Designed to give the Fools reason to vote for "energy" independence based on Photovoltaic and Wind. Cars, SUV's and PU's USA 2007 consumed 136,000,000,000 gallons of gasoline 2007. You need to be an MIT grad to get the picture? America - Land of Fools.
Thanks Roger for stating so eloquently that, energy-wise, Americans are living way beyond their means. With still the cheapest gas in the developed world, and 60% of fuel based on imports (over $350 billion/year), Americans are still being told by politicans that they can have their cake and eat it too. Some politicians actually believe that if the Saudis would only ship more oil, the prices will go down. Dream along!
It is time for petro to put in punlic domain. We are being taken for a ride by companies who "claim" the right to drill in ANWR is cramping their style just to shift the blame to public policy instead of their own greed and energy domination which is why they hoard thier profits to buy out alternative energy sources.
They have had the right for years to drill in nearby "National Petroleum Reserve-Alaska" which has millions of acres of land and contains over 9 billion barrells of researve...much more than in ANWR. They have not drilled one well in this oil rich area.
Holding vast quantities of oil gives them more leverage on the world oil market.
The reluctance of congress to issue a pass to the oil companies has more to do with "politics" played by oil corp. supporters than the actual truth. They want to add ANWR TO THESE RESEARVES. We'll not see the oil in the US. When they do drill, it will go into the world market add we will be no more independent then they deside....the govt. is you and me.
MORE oil is available off the coast of Florida as well that is restricted.
05/20/2008 11:49:47 AM
