Average domestic crude oil production is expected to increase by 140,000 bbl/d or 2.7 percent in 2006, to a level of almost 5.3 million bbl/d. For 2007, a 6.5-percent increase is expected, resulting in an average production rate of 5.60 million bbl/d for the year. Most of the production increase will likely occur in the offshore Gulf of Mexico, including new production from the Mars, Thunder Horse, and Atlantis platforms. (See the U.S. Minerals and Management Service for their May 1 update on Hurricanes Katrina and Rita damage.)

Total U.S. petroleum product consumption declined by 77,000 bbl/d, or 0.4 percent, in 2005. Higher prices and the impact of hurricanes on liquefied petroleum gases (down 113,000 bbl/d) and petrochemical feedstocks (down 77,000 bbl/d) drove this decline in consumption. In 2006 and 2007, petroleum consumption is projected to increase by 0.6 percent and 2.3 percent, respectively.

http://futures.fxstreet.com/Futures/content/100720/content.asp?menu=commodities&dia=1052006

5/11/2006 2:14:50 PM

nvm

[Edited on May 11, 2006 at 6:00 PM. Reason : i'm gonna wait before i reply]

5/11/2006 5:54:43 PM

Its time to drill ANWR and off the coast of California. And it's about time to start converting the billions of tons of coal in our backyard into diesel, like South Africa does.

Its ridiculous for people to limit domestic supply and then bitch about high gas prices and OPEC sponsoring terrorism and global insecurity.

5/11/2006 10:13:36 PM

we can't drill our way out of dependence [/valid talking point]

go ahead and look at the general estimations of how much crude is under ANWR
and go ahead and take a look at how long it would take to get it

5/12/2006 12:21:11 AM

I thought refinery capacity is what's been screwing us consumers?

5/12/2006 12:24:20 AM

^^ Well, such logic is quite futile. Are you seriously suggesting we should never bother starting a mine, drilling a well, or planting a crop if we alone cannot supply all that is demanded?

My grandparent's farm produced 0.000000001% of the nation's corn, does that mean they shouldn't have bothered?

What would have happened if everyone followed your logic and didn't bother producing anything?

The copper mines of Argentina cannot supply all that the world requires, should they have not been built? The iron mines of Illinois cannot hope to supply all of America's needs for iron, should they have never been built?

For the past three years oil production in the United States (ignoring Canada) has been growing steadily, openning up more fields would make it grow still faster.

5/12/2006 12:59:32 AM

there is a 6 month supply of oil if alaska was the only place in the world to get oil from

i quote that from 11th grade environmental science ap

5/12/2006 1:05:06 AM

^ Maybe so, but not all of that is easy to refine so it's not a very useful factoid.

What I would like to see happen in terms of purely domestic oil exploration, drilling, and refining would be to go ahead and start tapping some of the easier reserves and to go ahead and throw away the red tape and give incentives to oil companies to increase the refining capacity of the U.S. so that it slightly outpaces what the expected growth in oil demand will be for the next 10-20 years. The use of governmental incentives to create this excess refining capacity can be justified due to the current importance of oil products to our society.

At the same time, gasoline particularly (as well as some other petroleum products) should be taxed at a much higher rate than they are taxed today. The revenues should be put directly to fund the above mentioned refining incentives, incentives to homebuyers and homebuilders for denser homes closer to city centers, refunds to businesses and poor people that rely on gasoline (to a point, see below), incentives to companies to build infrastructure and develop alternative sources of energy (much more than is being done now - which isn't much), and some incentives from the Federal Govt. going down to State and Local Govts. for building efficient public transportation (note efficient.. in many cases like Raleigh's, for instance, I do not believe that is possible in the current layout of the city).

The most important thing will be to give incentives to businesses and people to slowly move away from petroleum into alternatives as they become viable.

This would all be an attempt to completely avoid the devastating impact of a world-wide oil crisis. It would definitly hurt the economy in the short-term, but would avoid possible disasterous consequences later.

[Edited on May 12, 2006 at 12:52 PM. Reason : .]

5/12/2006 12:46:50 PM

something ^ wrote got me thinking

ok if america is like the richest world power, why couldnt we just build like a ton of refineries(since we got the money to do so) and then we could have cheaper gas

its almost like we are "buying" our cheaper gas by having the most money to put toward refineries

5/12/2006 1:13:41 PM

Ok, look, a shortage of refinery space is only responsible for about 15 cents of the current higher gas prices in order to cover the cost of importing gasoline.

If we tax gasoline much more then we probably don't need any more refineries, the ones we have will easily fullfill a decreasing demand.

The problem is high oil prices, building refineries can only help marginally by allowing America to refine heavier crudes openning up America to increased imports from marginal fields in Asia and Africa.

The current market for oil is not being driven by marginal producers (the costs of the most expensive producers) but by marginal consumers (the max price of the least eager consumers). In other words, it is a seller's market, the price is being set by those oil consumers that are priced out of the market at $70 a barrel. Back in 2001 it was a buyer's market, the price was set by those oil produers that refused to produce oil below $20 a barrel.

Openning North America to increased exploration would increase the primary capacity of the world, decreasing the strain marginal consumers, and driving prices back down to marginal production costs.

5/12/2006 1:32:12 PM

^ Interesting about the 15 cents, but I suspect you are correct.

I re-read what I wrote and realized I completely overdid the refinery bit.. Where I state that money spent on taxing petroleum products should be spent on incentives for refineries I actually meant to say that it should be spent on exploration, drilling, transportation, refining, etc incentives within the domestic scene.

I'm curious to note what your take is on the level of price influence that speculative buying is currently having on oil and to what degree you think that will be affected by increased NAmerican exploration. Basically, what mindset do you think the majority of the people/companies/funds speculating on oil right now have?

5/12/2006 1:57:12 PM

^ It isn't hard to gleam into what people are really thinking. Inventories are building as prices go higher, this behavior is being generated by speculators in the market. However, inventories are not building at a rate comensurate with the level of speculation, inventories are only 5% higher than a year ago, so I suspect they are only tacking on $15 or so to the real "market" price.

As demand destruction continues these speculative inventories will finally be able to build up over the next year or so, finally eliminating the speculative boost, but it may be years before sufficient primary oil production comes on-line to restore market prices in line with marginal production costs.

Of course, merely the threat of increased primary oil production, such as from ANWR, could reverse the direction of speculation, draining inventories rather than building them, and restoring market prices to marginal production costs sooner rather than later.

You don't actually have to produce oil from ANWR to lower prices, in some sense all you need to do is convince everyone that you will produce oil.

[Edited on May 12, 2006 at 2:22 PM. Reason : .,.]

5/12/2006 2:18:49 PM

Quote :

"we can't drill our way out of dependence [/valid talking point]"

We can mine our way out of dependence.

Quote :

"And it's about time to start converting the billions of tons of coal in our backyard into diesel, like South Africa does."

We've got quite a bit more coal than Saudi Arabia has oil.


But yeah, I agree with Lavim. Why the fuck are we giving billions of dollars in subsidies to big oil companies when alternative energy R&D is starving for funds? Alternative energy development and infrastructure should be funded by gasoline taxes.

[Edited on May 12, 2006 at 8:50 PM. Reason : 2]

5/12/2006 8:47:24 PM

Quote :

"Prawn Star: But yeah, I agree with Lavim. Why the fuck are we giving billions of dollars in subsidies to big oil companies when alternative energy R&D is starving for funds? Alternative energy development and infrastructure should be funded by gasoline taxes."

Why don't you ask your party?

[Edited on May 12, 2006 at 10:10 PM. Reason : just a thought]

5/12/2006 10:10:09 PM

because taxes are never popular

[Edited on May 12, 2006 at 10:34 PM. Reason : ps I'm a libertarian]

5/12/2006 10:34:07 PM

AHA, no decent libertarian would ever say this:

Quote :

"Prawn Star: Freedom of speech is not absolute. Supporting the enemy through propoganda can fall under the definitions of treason. At the very least, she should have been thrown in jail like those who burned their draft cards. But that would have been political suicide for Nixon."

http://brentroad.com/message_topic.aspx?topic=403617&page=1#8662588

You're a Republican. Get over it.

[Edited on May 12, 2006 at 10:45 PM. Reason : sss]

5/12/2006 10:44:48 PM

I'm definitely not a party-line, big "L" libertarian, as evidenced by my advocating gas taxes and limits on freedom of speech. But I made a clean break with the GOP a long time ago, and haven't looked back since. I try to assess every issue instead of blindly adopting a party's mantra. You should try it some time.

5/13/2006 10:58:01 AM

Well, regardless of what you call yourself, arresting people for something as pointless as distributing enemy propaganda is a waste of resources and will most likely back-fire. By making what they say illegal you are giving relevance to it, so regardless of whether or not it had merit before it will definitely be taken seriously now.

As for gas taxes, why not. Pollution is a market externality which should be dealt with somehow, as any free-marketteer would proclaim. While gas taxes invariably fall hardest upon the poor, we can offset this by eliminating licensing and registration fees for vehicles, which will now be paid for via the higher gas tax.

[Edited on May 13, 2006 at 11:25 AM. Reason : .,.]

5/13/2006 11:22:39 AM

quality thread

5/15/2006 1:21:57 PM

http://www.theregister.co.uk/2006/05/15/gates_alcohol_factory/

Gates is building a big ethanol factory that uses corn.

5/15/2006 3:48:46 PM

^ nice!

5/15/2006 3:55:26 PM

^^ Not quite nice. Ethanol from corn is sizeably more expensive than Ethanol produced from sugar cane, as is utilized in Brazil.

Regretfully, Ethanol cannot be shipped as easily as gasoline, so importing it is not feasible.

What we need to do is eliminate the import quotas on sugar.

True, even then Ethanol won't be price competitive with gasoline without continuing the substantial government subsidies. But if we're going to do this we should at least be as cost effective as possible.

5/15/2006 5:03:45 PM

ticker symbol PEIX

5/15/2006 5:14:32 PM

Quote :

"We can mine our way out of dependence."

and grow our way out.

and being a "little L libertarian" on tww is cool!

5/15/2006 5:25:23 PM

Quote :

"Pollution is a market externality which should be dealt with somehow, as any free-marketteer would proclaim."

because, as every free-mouseketteer knows, the industry will regulate itself, and enforce its own policies to contain hazardous waste, protect the environment, and ensure safe working conditions.

and it will do all of this -- even though it cuts into the profit margin -- and it will do a better job and more cost-efficiently than any big-government regulatory agency could.

how is this so? thats the way the free market naturally works: with the long term vision of quality-of-life issues. After all, if it worked for a 17th century agrarian economy, it can work today.

be part of the elite 1%! vote libertarian!

5/16/2006 12:03:20 AM

Quote :

"Not quite nice. Ethanol from corn is sizeably more expensive than Ethanol produced from sugar cane, as is utilized in Brazil. Regretfully, Ethanol cannot be shipped as easily as gasoline, so importing it is not feasible. What we need to do is eliminate the import quotas on sugar. True, even then Ethanol won't be price competitive with gasoline without continuing the substantial government subsidies. But if we're going to do this we should at least be as cost effective as possible."

It seems to be more about the positive environmental impact, than economic superiority to oil. There's really nothing on the horizon or close to market that can match the energy density and stability of oil-based fuels, but things like ethanol are practical enough to be used more than they are now, with (supposedly) less environmental impact than gas.

I don't think Gates would undertake a venture like this if there weren't some real benefit.

5/16/2006 1:10:44 AM

Quote :

"I don't think Gates would undertake a venture like this if there weren't some real benefit. "

you forget, $84M means nothing to this guy.





[Edited on May 16, 2006 at 2:44 AM. Reason : ]

5/16/2006 2:26:21 AM

joe_schmoe, I guess you didn't understand it when I wrote it before:
"Pollution is a market externality which should be dealt with somehow, as any free-marketteer would proclaim."
Ok, by "dealt with somehow" I am clearly implying that a purely free market does not deal with it, as any free-marketteer would tell you. As such, the implication you obviously couldn't gleam is that "someone other than the market must deal with it" which only leaves God and the government.

You might have noticed my next paragraph was an argument in favor of higher gas taxes because it is obvious the market isn't taking into account all the costs of oil combustion. A higher gas tax would fix this, and eliminating licensing and registration fees would offset the costs for the poor while maintaining the requicite market signal that "oil combustion is costly."

If you make the externalities aparent in financial terms (taxing pollution), then to lower pollution all you have to trust that business firms are greedy, which I think is a given, because if they don't "protect the environment" then it will "cut into the profit margin." No regulation necessary, if you don't feel pollution is being cut sufficiently then just raise taxes again.

5/16/2006 9:22:43 AM

sorry, snark. i didnt follow your posts carefully, and got them mixed up with prawnstar's

5/17/2006 2:24:58 AM