Why diesel fuel is higher priced than gasoline...

[More Power]

One reason why diesel fuel today is higher priced than gasoline is because of the 2007 EPA mandate for ULSD fuel - and not because it costs more to produce.....

The 500-ppm sulfur pre-2007 diesel fuel was not usable in Europe, so it wasn't exported. Producing ULSD means this fuel is now acceptable for use in Europe, and a lot of the diesel fuel being produced today here in the U.S. is being shipped to Europe. The economics of "Supply & Demand" have simply fallen apart here in the U.S. as a way of pricing fuel. We could stop using diesel fuel entirely, and it wouldn't produce lower diesel fuel prices.

Read this 2/08 Reuters article, entitled: ANALYSIS-Exports keep U.S. diesel prices above gasoline

This is the result of our government regulations working for the American people...not...

[ronniejoe]

This is the result of our government regulations working for the American people...not...

True! True!

I've been telling my kids this for a year now...

Congress has, again, been hauling in the oil company execs to grill them on prices accusing them of collusion. This is ridiculous. What I want to know is when is someone gonna haul congress in (particularly the Democrat party) and grill them about high oil prices?

I heard the North American CEO of Shell fire back during his inquisition. He was responding to Leaky Lahey's question about free market forces. He said (and I'm paraphrasing), "The congress of the United States has placed regulatory barriers to exploration and production of domestic crude and construction of refineries. This is not a free market. You have artificially limited supply through regulations." I cheered so loudly it was embarrassing. I even called Shell's corporate office and left a message commending the guy for having the courage to defend himself and speak the truth when every politician is pandering to the public and grand standing. I told him he had no idea how much I appreciated his comments to the idiots in Congress.

I also sent my congressman a letter chastising him for voting in favor of that idiot bill that will allow our Justice Department to sue OPEC. Like that will create any more supply.

[More Power]

I agree with you on the short sightedness of not allowing exploration and increasing production. However, in light of the fact that nearly everyone is sick about importing foreign oil, why do we export any petroleum products?

If we weren't exporting ULSD, diesel fuel would cost a lot less.....

I would not support more exploration, more refineries or other petro development if an increase in supply would simply be exported. Our nation's security requires us to be energy independent, and we can't get there by exporting petro products or energy.

Speaking of which, on a trip to BC last month, I saw a loaded coal train winding its way through the Cascade mountains east of Seattle. I wasn't aware of a coal fired electric plant in Seattle. Any guesses where that train load of U.S. coal was headed? Coal that could otherwise be converted to syn petroleum...

Jim

[ronniejoe]

It's a global economy. Products are sold where ever there is a market. Exports are good for us, whether it is oil, fuel or other products. Isolationist policies have failed miserably in the past and will fail miserably again.

One could argue that ULSD shouldn't be exported until all of our domestic supply needs have been met. My question is...has anyone noticed a lack of supply in the US?

[JTodd]

Are we doing political threads again? Can I play?

[More Power]

Opinions about rising fuel costs are OK, which are what this thread is about. There's enough blame to go around for both political parties. Neither party has a solution for rising gas/diesel costs. All the while, the economy is in peril.

Yes, we have a global economy. But, a lot of the domestic oil and energy resources are found on and extracted from U.S. public lands. I believe the U.S. public should have a say in our energy policy (Congress isn't helping). Energy independence would have a profound effect on national security. A coal to oil program could produce enough synthetic petroleum to replace all OPEC oil for the next 200 years at the current import rate. We need to divorce ourselves from OPEC - for the future of our country.

We need to either protect the oil flowing from the Middle East (i.e. have the military there) OR we need to expand U.S. energy exploration/production here at home. We must do one or the other. Likewise, if we expand domestic energy production, we cannot then export it, or what's the point?

Jim

[SoTxPollock]

RonnieJoe, I thought I was the only one who had it figured out. People that engineer things must think alike, since our screw-ups become so obvious when they get to manufacturing. It better work or else, yes I agree with what you have said. That being said, I'm sure glad Mark has a good sense of humor. Like many today that are way too busy making a living those drive by news spots are all a lot of people have time to see, before its on to something else. It's so easy to let someone else do it. The liberal left has convinced most in this country that the government should be doing something about that, whatever that is. Just throw more money at it and the problem will go away, thats a real good hidden way of buying votes, but its gotten our country so complacent and non-responsive to anything there are many who just don't care anymore.
Congrads on the family achievements, if only everyone had a chance to have a real family, thank God every day for that opportunity.
One think about the war on terror, the democrats had 8 years with Clinton to do something about it, Bush had 9 months in office when 9/11 took place. So who do we blame unchecked terrorism throughout the world on?
I too have noticed the lack of real news in this country for a long time. My daughter only watches BBC news, she's convinced we aren't going to be told anything of really what is going on in the world by American news reporting. So sad, this political correctness crap.

We need more individual thinkers-- not yes people. What good is diolog if we all make each other feel good and say what we think the other person wants to hear. What ever happened to truth?
If someone has something to say let them say it, its our right. God created humans with free will, don't let anyone ever steal that away from you friend.

End of rant
Thank you.

STP

[Mark Rinker]

Agreed, MP. Continued dependence on foreign oil is a formula for being held hostage for it - in fact it feels that way right now.

How far away are we from 100% biodiesel and can that be sustained? i.e. Could you run a farm where all vehicles and machinery burn B100 and produce more B100 (or the necessary quantity/bushels of inputs like soy, sunflower, or other to produce a greater number of gallons of B100) than you consume in the operation of the farm?

My complaint with the corn ethanol programs is the vast amounts of petroleum products burned and expended (grease, lubricants) in the production and transportation of the corn. Many claim that without the farm subsidies, the programs would fail, so this departure only adds to our energy problem, not solves it. What is the truth?

Until we are burning the products (B100, E100) made of 100% bio-mass to produce bio-mass, we are still dependent...right?

[More Power]

I watched a program on TV last night that said it costs $1.25 to produce $1.00 worth or ethanol. The eth program is a disaster, both from an economic model standpoint as well as increasing food costs - here at home and world-wide.

Alcohol from wood products and other less valuable sources are a possibility.

I've talked to local farmers who are considering crops that are high in veg oil, to allow them to produce their own bio-diesel. A local dairy farmer installed a $1M methane plant to extract the gas from manure. He's expecting he (and his cows) will produce enough energy to power his entire operation and be able to sell electricity back to the grid (runs a methane fired engine to spin a generator). Landfills are looking at methane extraction as well.

Wind farms have doubled in size here in Montana in recent years - to a point that the power company is balking at accepting their capacity (they want to sell not buy).

Jim

[Mark Rinker]

We generate power here in Elk River with methane extracted from our landfill. There are large wind farms in SW Minnesota, near Pipestone.

http://www.epa.gov/lmop/res/elk.htm

Lots of overdimensional, specialized hauling in wind power. If MRE can survive these challenging times, I might gravitate towards some diversification and use lessons learned in marine oversize loads, applied to wind tower parts.

[93GMCSierra]

I would like to step in here and say I have heard great points from everyone, We can not blame everything one one person, as much as we would like to put a face to our problem, The fault lies in alot of people over alot of time. We as voters have been lax and misinformed for so long alot of us just say screw it, its not worth the hassle of digging for the truth, and that is really a bad thing.
I believe there is a very dedicated interest in inflating and keeping the prices high, a dispirited populace is much easier to control, I very much would like to disagree with the spreading freedom thing though, I have not seen how you can Force Freedom, kinda Ironic dont you think.

Oh and to add to the bio thing, I would very much like to see more production of bio from non food, not livestock feed either, like algae as that will give the most benefit without driving food prices through the roof.

[gillguy]

I don't understand why bio diesel isn't available in more places. Here in GA I know of 7, yes seven bio places but they can't sell to me because of the tax credits they receive from selling to retailers. If you ask a retailer why they don't carry bio, they just say that ULSD is required. I think it's just bunk. Why set the requirement for ULSD but yet continue to say that we need to find alternative fuel?
Heck my truck will run off soy bean oil then lets fill it up!
Yesterday diesel was $4.45 when I filled up at 830am. Today it was $4.79
What the hell is going on with diesel??
I may have to build a bigger shed and start making my own fuel.
And don't get me on the Democrat/Republican s--t either
When I vote I'll be writing my name on the ballot.
Yep just write in gillguy for Pres

[JeepSJ]

I don't understand why bio diesel isn't available in more places. Here in GA I know of 7, yes seven bio places but they can't sell to me because of the tax credits they receive from selling to retailers. If you ask a retailer why they don't carry bio, they just say that ULSD is required. I think it's just bunk. Why set the requirement for ULSD but yet continue to say that we need to find alternative fuel?
Heck my truck will run off soy bean oil then lets fill it up!
Yesterday diesel was $4.45 when I filled up at 830am. Today it was $4.79
What the hell is going on with diesel??
I may have to build a bigger shed and start making my own fuel.
And don't get me on the Democrat/Republican s--t either
When I vote I'll be writing my name on the ballot.
Yep just write in gillguy for Pres

Then there is the station here that sells Bio in blends from B2 all the way up to B100. Funny thing is that the B100 ALWAYS seems to follow the price of diesel, and of course the blends are slightly higher "due to the cost of diesel".

The more I think about it, the more I want to push forming a small co-op with some neighbors and just brew our own.

[More Power]

I did more reading today about oil exports from the North Slope of AK. I found an article on the Seattle Times web site, entitled Where would ANWR oil go? that helped answer the question about past oil exports and possibly any future exports.

In short, Congress did pass laws in the 1970's that prevented exports of AK crude, till 1995, when the laws were changed, then just a trickle was exported till 2000, then just one tanker load since then. It seems the West Coast could take almost all of it. Opening ANWR would make exporting more likely.

In the above Seattle Times article, I found it interesting that the oil companies were concerned about whether refineries on the West Coast could handle all the North Slope oil field production, and if they couldn't handle it all and if it couldn't be shipped to Asia, that fact would reduce the price of that oil... Isn't that the idea?.... Oversupply reducing costs... Would seem reasonable to keep the oil field in production for as long as possible, feeding the demand, and not suck the region dry as quickly as possible. I would liken it to a retirement fund. You wouldn't go on a spending spree once turning 65, trying to spend all the money you could as quickly as you could. You would more likely string it out, hoping your supply lasted as long as you needed it to.

Jim

[JeepSJ]

I did more reading today about oil exports from the North Slope of AK. I found an article on the Seattle Times web site, entitled Where would ANWR oil go? that helped answer the question about past oil exports and possibly any future exports.

In short, Congress did pass laws in the 1970's that prevented exports of AK crude, till 1995, when the laws were changed, then just a trickle was exported till 2000, then just one tanker load since then. It seems the West Coast could take almost all of it. Opening ANWR would make exporting more likely.

In the above Seattle Times article, I found it interesting that the oil companies were concerned about whether refineries on the West Coast could handle all the North Slope oil field production, and if they couldn't handle it all and if it couldn't be shipped to Asia, that fact would reduce the price of that oil... Isn't that the idea?.... Oversupply reducing costs... Would seem reasonable to keep the oil field in production for as long as possible, feeding the demand, and not suck the region dry as quickly as possible. I would liken it to a retirement fund. You wouldn't go on a spending spree once turning 65, trying to spend all the money you could as quickly as you could. You would more likely string it out, hoping your supply lasted as long as you needed it to.

Jim

One would also think that the oil companies would be happy to sell the stuff at $130/barrel on the open market.

I also recently read somewhere that the AK stuff is "sour", versus the "sweet" that comes out of the mideast. Sweet and sour are related to the sulfur content. Sweet has a lower sulfur content, ans sour is higher. It went on to say that the sweet was easier to refine and that the majority of our existing refineries were not set up to refine the sour stuff.

Can we force companies to take care of the US consumption needs first? No, not really. We can try to limit exports, but that would not force them to do anything locally. Does the government need to get into the oil production and refining business?

So as a "what-if" scenario, what would happen if the US Government decided to go into the oil business? Anything they produced would be sold to refineries for fuels that could not be exported. In addition, there would be limits on the amount of markup that could be added throughout the distribution chain.

Alternately, what if they did sell on the open market?

Or, how about the US, Canada and Mexico creating their own version of OPEC? That would certainly have an affect on the world oil market.

Of course you would still need a government that would stand up to the ecofreaks and tell them to go pound sand.

Are we the only oil producing country where the Government isn't in control of oil production?

[More Power]

I get the "open market" and "free enterprise system" arguments. I'm with you on that. However, a large percentage of the crude comes from public lands, and the U.S. is at significant risk, both foreign and domestic because of the many vulnerabilities associated with the importation of so much foreign oil.

Energy independence is a more significant factor in national security than say, super computers. Foreign sales of super computers are tightly controlled. Same with satelite navigation and inertial navigation equipment. Same with certain types of bio-medical research, radar absorption technology, aerospace technology, nuclear technology and on and on and on.... which are all produced by U.S. private companies.

We can continue to send $800B to our enemies every year to buy their oil, continue to run up the national debt and trade deficit, crush our economy due to high energy prices, reduce our standard of living to that in the third world - or we can become energy independent. Exporting oil and petroleum products push us farther away from that goal. We have enough resources right here at home to maintain current consumption levels for the next 100-200 years (depending on whose data you trust). I vote for energy independence...

Jim

PS - The citizens of Montana were asked on a ballot initiative 2-3 years ago whether to buy the many hydroelectric facilities located here in Montana and make them a state owned/run operation. Electric rates were de-regulated sometime before that, and some believed electricity could become unaffordable to the average citizen. Remember the blackouts in CA and rising electric rates? I cast my vote in opposition to buying the facilities. Just like the hydroelectric plants, I believe in leaving the oil business in private hands, but with restrictions (i.e. the Montana Public Service Commission continues to play a part in establishing electric rates). The entire U.S. is a mighty big market in which to sell gas & diesel fuel.

[sholsten]

Congresswoman Threatens To NATIONALIZE Oil Companies!

http://www.youtube.com/watch?v=PUaY3LhJ-IQ

[16gaSxS]

a bunch of deleted posts looks like I missed some entertainment!!!

I look at the failing to drill in the USA and build refineries a bit different than many. The Oil that is rumored to be on the Eastern Front of the Rockies (my back yard) is not going anywhere. The time will come when people have had enough to run over the road blocks of production. Could it make sense to burn Middle East reserves first and save our own for later??? As the further past Peak Oil we get the more valuable our unproven reserves become. Just a thought.

[JeepSJ]

a bunch of deleted posts looks like I missed some entertainment!!!

I look at the failing to drill in the USA and build refineries a bit different than many. The Oil that is rumored to be on the Eastern Front of the Rockies (my back yard) is not going anywhere. The time will come when people have had enough to run over the road blocks of production. Could it make sense to burn Middle East reserves first and save our own for later??? As the further past Peak Oil we get the more valuable our unproven reserves become. Just a thought.

But at what cost to our current economy? And what is the timeline to get everything set up to start pumping that oil?

I can see the point about drilling, but what about refining capacity? Even if we wanted to save our reserves, the fact remains that we are just about peaked on refining capacity. Shouldn't we at least increase refining capacity now?

[ronniejoe]

This whole idea that we're running out of oil is nothing more than a media creation to force public opinion. Back in the '70's, they said we'd be out of oil now... We're not. There is more oil in the ground than any of us can imagine.