The Oil Drum

In my opinion this is a bit misleading in the sense that gasoline imports now act like spare refining capacity.
Also the Caribbean refining capacity although technically on the import side does not really count as almost all production has historically gone to the US.

What I think is missing is that as the US has become more dependent on imports its made more sense to cherry pick the oil products we need i.e gasoline at the expense of general purpose refining which produces a variety of products.

This is why I'm far more focused on gasoline imports then US oil inventories and refining margins.

Since US refining capacity has not supplied all of US needs for some time its not the primary issue. It seems to me that going forward given that Europe prefers diesel it makes more sense for them to import oil and send the excess gasoline to us. Also the cost of oil in Euro's has not increased as much vs the dollar so on the money side they effectively get the crude cheaper and can probably produce the gasoline a bit cheaper.

Thus the real problem becomes when refineries in the US and in countries that export to the US cannot get enough oil. At that point its not really too important where the oil goes. If the US imports the oil then it won't get the gasoline imports from the countries it outbid.

Once the gap develops then OECD countries as a group will have to outbid China and India bidding agianst each other in a sense does not work.

Eventually of course they will and at that point we will see gasoline available for export begin to drop.

In a sense this is saying I expect European oil demand to probably contract faster than in the US as they use and expand their existing public transport networks and eventually reach the point before us that demand drops off.
This means the US keeps getting its oil but not its gasoline imports.

So in the world of Jevons Paradox you get the interesting result that if Europe conserves faster then the US is going to suffer.

Even if total oil production decreases if the price of imported gasoline increases and lifts refining margins in the US then the US could expand refining capacity and the same for Europe assuming oil prices don't increase as rapidly and then we could together compete with China for the remaining imports. The same if European demand drops leading to less gasoline for import higher prices and thence expanded capacity to compete agianst the rest of the world.

But no matter how you slice it either we get a lot of relatively cheap imported gasoline or local gasoline prices will have to go up to allow more expansion.

It seems that at least in the US gasoline prices are relatively low vs crude so the current dynamic is that the rest of the world is "getting our oil". And you have this nasty problem in general with oil once demand has expanded its tough to contract it. For example demand increases in China at todays prices are sticky against further price increases. So by having low gasoline prices now we are less likely to get the oil/gasoline imports we need in the future.

In a sense by not being aggressive on gasoline pricing in the US right now we have upped the ante in the not to distant future. I many ways this works like a moral hazard in economics we seem to have entered into a moral hazard situation with future US gasoline imports.

Congress is very clear on this: encourage non-fossil fuel energy. Ethanol subsidies and ethanol mandates. Tax big oil more and more. Environmentalists won't let us build new refineries and there's no reason to do so. We can import gasoline just as easily as importing crude. No reason to build new refineries; that's not our problem. Refineries are at 85% utilization as it is. This is a no-brainer.

Ah...ah...ah...Steven, you may not have noticed that ahm ah..ah...what they call a lame duck and even when ah...ah...was ah...hawk, I didn't do squat to formulate a comprehensive energy policy. We just ah...ah...need more supply.

Don't you worry though. Once Arlen Specter finishes investigating whether the New England Patriots videotaped football signals, he and the rest of Congress will get to work on a comprehensive energy policy, then solve the Iraq issue, then Social Security, then global warming, then health insurance, then....

There is plenty of oil: oil from the oil sands in Canada exceeds that of Saudi Arabia; the oil from shale in Wyoming exceeds that of Saudi Arabia. And if that isn't enough, there's more coal in the US than we know what to do with, and yes, you can make gasoline from coal. It's not a question of "is there enough oil?" The question is how much do we want to spend (apparently Congress is happy with $126 oil, since Reid/Pelosi have offered no solution) and whether we have the right policies / programs (right now the environmentalists are running the programs -- which is fine with me, as long as everyone understands the associated costs and quit complaining).

You can use the 1976 date against them in a debate. If no refineries have been built since 1976, then why hasnt oil been steadily increasing in price since then? Why is there not a good solid correlation between gas prices and refinery spare capacity? It's only been exploding for about 5 years. You have to look at what's been happening over the last 5 years. What is different.

The iraq war.
Massive deficit spending.
Massive increases in the money supply.
Peak oil.

Try to get people to choose from these choices as a cause for high oil prices. They are all closely linked.

Said by xeroid:

What is it you want the president to do?

Stop lying.

Not invade a country to secure an oil supply.

Stop globalization.

Cut spending, be fiscally responsible with our tax dollars.

Terminate (to have never begun) the insane ethanol from corn program.

Electrify our long distance rail lines.

Get nuclear fusion power plants working.

Eliminate nuclear fission power plants.

Rapidly raise fuel efficiency of our vehicles powered by fossil fuels.

Greatly improve energy efficiency through out our society.

Aggressively support renewable, sustainable and environmentally friendly energy sources (principally wind and solar).

Aggressively support electric and hybrid vehicles.

Stop corporate welfare to profitable, unsustainable, dinosauric industries.

Implement mild population control measures: keep abortion legal, legalize death with dignity, rational family planning, eliminate the tax credit for dependent children above 2; and control & reduce immigration.

Prioritize the use of natural gas for making fertilizer by discouraging LNG and encouraging solar hot water systems with electric backup. Do not use natural gas to make biofuels.

Encourage transport of goods by waterway.

What other ideas did I miss?

President Bush had nearly 8 years and failed on every point demonstrating an utter lack of leadership.

Hateful rants about Bush don't help the image of the Oildrum one bit. You folks ought to just quit it.

Not hateful rants, just gallows humor to lighten the grim facts a bit. The last 7.5 years of official inaction on energy and disinformation on climate change have been hard on anybody with a conscience.

I think you'll find peak oilers to be people that are willing to look at a subject that has troubling ramifications, one that on the surface isn't very positive, but then that's the reality of demand outpacing supply. So in that spirit, there is also a willingness to express their views of Bush as they see him, negative or positive. But maybe you have something when it comes to some of the really harsh criticism of Bush, afterall he has a point when he says, "Listen folks, when it comes to the price of oil I don't have a MAGIC WAND." Evidently as the president of the United States of America for two successive terms he was completely unable to forsee what Peak Oil might mean (although he did meet with Matthew Simmons in 2000 several times on the subj