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Oracle of Delphi

Ethanol could keep price of gas high

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Industry won’t expand refineries since demand for gas will remain the same!

WASHINGTON - A push from Congress and the White House for huge increases in biofuels, such as ethanol, is prompting the oil industry to scale back its plans for refinery expansions. That could keep gasoline prices high, possibly for years to come.

With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones.

Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions — as much as 10 percent increase in new refining capacity — they anticipated as recently as a year ago.

Article Continues: http://www.msnbc.msn.com/id/19276523/

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Dumb oil industry

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As if they actually had plans for refinery expansion. There is enough of an oligopoly now that they can restrict production to drive the price up because there is not enough capacity. It's in the oil companies financial best interest to NOT build new refineries.

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As if they actually had plans for refinery expansion. There is enough of an oligopoly now that they can restrict production to drive the price up because there is not enough capacity. It's in the oil companies financial best interest to NOT build new refineries.

with the possible CAFE laws being changed now, that could have a big effect on what oil companies will do around, what, 2015 and after.

trucks with almost a 50% higher mpg rating... cars with 25% higher... that could bring down consumption even more, creating this problem again.

either ethanol needs it's specialized engines (C.R. too high for gas), renewable diesel needs to "fill the void", or fuel-cell/electric vehicles need to take off. i'm for the diesel in this scenario.

i told my dad about the ~700bhp electric super car that's going to be built in Europe... he said something close to "is the stereo going to make engine noises?" there will be something to the sound of an engine for car lovers that will not be able to be replaced in this coming era of "alternative transportation"

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TRANSLATION:

"We're going to keep screwing the consumer, just in more creative ways!"

It amazes me that Detroit is constantly chastised for fuel economy and being "behind the times" yet we let this circus of an industry with it's sluggish expansion and price fixing slip right by without a damn word. I guess it's because the Detroit companies are american, whereas the oild companies are not... Remember, we only try to destroy our own and bend over backwards for anyone foreign.

They'll gouge us at the pump with gas this way and then they'll turn right around and double their profits by gouging us on biofuels by blaming the high prices on "refinery expansion" and "strange weather patterns"

“By creating a situation of extremely tight supply, the oil companies gain control over price at the wholesale level,” said Mark Cooper of the Consumer Federation of America. He argued that a wave of mergers in recent years created a refining industry that “has no interest in creating spare (refining) capacity.”

Reason # 3, 456, 000 why "Mergers" are a BAD IDEA. Whatever happened to busting up oligoploies and monoploies??? Did our government forget about that part of it's job description or have we just introduced so much foreign ownership into the equation that we CANNOT break this "control" these companies/nations have over our lives? Or is it just that our officials are in the pockets of those very same oligoploies/monopolies?

In 2006, motorists used 143 billion gallons of gasoline, of which 136 billion was produced by U.S. refineries, and the rest imported.

And BTW, what the hell is the big deal about funding terrorism again?!?! Was that just smoke and mirrors, because it seems like we refine the MAJORITY of what we use.

With the anticipated growth in biofuels, “your getting down to needing little or no additional gasoline production” above what is being made today,

Assuming all other things equal, such as number of cars, population, umm I dunno, DEMAND.... That's bull$h!.

Asked recently whether Chevron Corp. might build a new refinery, vice chairman Peter Robertson replied, “Why would I invest in a refinery when you’re trying to make 20 percent of the gasoline supply ethanol.”

My god... If only the automakers had this much power! Just to tell the government and the consumer to essentially eff off.

In the 1980s, Blumenthal said at a recent hearing, refiners were producing at 77.6 percent of their capacity, “which allowed for easy increases in production to address shortages. In the 1990s, as the industry closed refineries, ... (that figure) rose to 91.4 percent, leaving little room for expansion to cover supply shortfalls.”

So not only did they increase efficiency and cut costs, they're also rolling in higher profits on top of it all.

Edited by FUTURE_OF_GM
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TRANSLATION:

"We're going to keep screwing the consumer, just in more creative ways!"

It amazes me that Detroit is constantly chastised for fuel economy and being "behind the times" yet we let this circus of an industry with it's sluggish expansion and price fixing slip right by without a damn word. I guess it's because the Detroit companies are american, whereas the oild companies are not... Remember, we only try to destroy our own and bend over backwards for anyone foreign.

They'll gouge us at the pump with gas this way and then they'll turn right around and double their profits by gouging us on biofuels by blaming the high prices on "refinery expansion" and "strange weather patterns"

FOG- I couldn't have said it better myself! :thumbsup:

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It's actually a pretty brilliant strategy. Either way, it's a sound way for more profit. If gasoline usage drops by 20% [which is extremely doubtful; I'm more likely to be shipwrecked on a deserted island from a cruise full of Playboy playmates than this happening], then oil companies can make up for the lost money by "reducing" production capacity and therefore charging more. If on the other hand gasoline consumptions stays the same, or more likely, increases from it's current rate, then price will be higher because supply is down ("Well, we thought that consumers were going to use 20% less!")

Hate them as we do, no industry is better suited to rewarding shareholders than the oil industry.

Edited by Hollingsworth
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All of the above is why we need to make these greedy pricks and their product obsolete as fast as we can.

This time, I think it might just bite them in the ass.

Can't wait to see them squirm when the gravy train dries up.

And those lunatics in the "oil producing nations" can join their pity-party.

As soon as I find a viable alternative fuel that I am sure will work for me, they won't be getting my money anymore.

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As soon as I find a viable alternative fuel that I am sure will work for me, they won't be getting my money anymore.

Amen brother!

I'd gladly switch the Camaros and our entier fleet to ethanol if it were available. BTW, anyone remember the Ethanol drag car that used to run IHRA (Might still) It was the same idea as the Mustang concept a few years ago that made HUGE power off of Ethanol.

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All of the above is why we need to make these greedy pricks and their product obsolete as fast as we can.

This time, I think it might just bite them in the ass.

Can't wait to see them squirm when the gravy train dries up.

And those lunatics in the "oil producing nations" can join their pity-party.

As soon as I find a viable alternative fuel that I am sure will work for me, they won't be getting my money anymore.

Agreed.

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