I found this artcle on NBC news http://www.nbcnews.com/business/economywatch/us-fast-track-energy-independence-report-suggests-1C8344034. It discussed how US energy production was growing rapidly and also mention, if only briefly, its impact on the railroads. The articel said there was a shortage of both tank and hopper cars that was problematic.
What a lot of these energy hype pieces don’t tell you is that a majority of what is being produced here, or planned on being produced, is for off shore sales, not for US public consumption. Investors again have taken control and are not telling the whole truth. Keystone pipeline is to get to a refinery that will ship overseas not over the country which is why hedge funds, commodities gamblers, investment bankers, and other thieves want it so bad.
You make some good points, but most of the Keystone pipeline’s capacity is not going to be used for U.S Domestic Crude unless we’ve annexed Canada (did I miss that story?)…
Nothing new about the “tangled Web” of the Petroleum Industry, it was thus even back when it was a U.S Domestic industry marketing product for Domestic use (“Standard Oil Trust”, ect…)
There is a world market and we should understand it after all these years of being subjected to the mid-east and South American suppliers. The POINT is that we HAVE IT and shall no longer be required to import when the world market stabilizes.
Also, the technique for extracting it from the fractured formations will be used elsewhere on this planet which will further stabilize the market.
Diningcar…the point is that the energy companies are telling you all we have is ours and we no longer have to rely on the rest of the world but in fact and in practice they are mining and pumping to send out of the country and is not for domestic use. The energreedy keep all the oil, gas, and minerals and money for themselves and Americans get basically screwed!
Henry6,
A major piece of the energy consumption pie, gasoline consumption has been dropping over time and is expected to remain flat to slightly below all-time levels in the future. So if we have the capability to produce and transport it elsewhere, tell me why that is bad. It’s one aspect of our otherwise feeble economy that is actually producing jobs.
At the same time, I’d like to know what is wrong with “investors.” Do you think they just sit on piles of money? No, they “invest” it elsewhere, creating more jobs and more capital. Just basic economics, not impaired by “zero-sum” thinking.
John Timm
At best domestic oil production may reach 10-10.5 million barrels per day. Current domestic demand is 18.5 million barrels per day. Independence? Dream on…
Henry:
The refineries are not set up to handle the sweet Balkan oil except in certain locations. Thus, the oil gets exported.
Either export it or keep it in the ground. Makes sense to sell it. BTW, the Balkan oil has been selling at a significant discount to the Brett standard. Why? Too much being produced and not enough demand (due to refinery capacity).
Suggest you read the RBN blog daily…it is very informative.
Ed
Just to add a bit. It’s why the Bakken crude is going to the east coast refineries by rail. It is light-sweet like Brent and much cheaper even with the rail transport cost.
As for a pipeline to east coast refineries…really? It was hard enough to find an acceptable route through open country. Can you imagine trying to site a pipeline to the northeast?
You counting natural gas in this? You can 1) run vehicles on natural gas or 2) reform it to make liquid fuels. We don’t HAVE to have crude oil to be energy independent.
Investors are often not industrialists but just, well, investors and all they want is their money back in spades and immediately if not sooner, too. And at what level, too? If they invest knowing it will take time and manpower and production time before they see a return and not demand that everybody be fired and factories closed in order to make money by saving money…then, ok. But if they are like commodities brokers who bid the price up without there being an improvement or more real value added to the product, or is investing just because he wants all his money back as quick as possible, then they make things bad for everybody, eventually for themselves as well. Too many investors are not industrialists or even risk takers, not creating jobs and stimulating the economy but lining their own pockets and bottom lines, the rest be damned.
But, again, not there is a lot of oil and gas…and what coal there is…earmarked for export and not for US consumption. So I can’t swallow the line that all this is good for American energy…especially every hiccup and sneeze raises the cost of gas at the pump while they are pumping the US Treasury for more money and my hand for my approval. No, can’t swallow it.
Investors invest. It’s what they do. By nature, they’re going to invest to make money. No one wants to invest to break even. The guy you have a problem with, is the middle man, who makes money playing- and manipulating- the market.
Oil is bought and sold on a world market. A gallon of oil is going to be sold to the highest bidder. Every gallon of oil that is pumped in the U.S. and ships overseas is one gallon that is not sold by OPEC. The law of supply and demand should mean that each gallon of oil pumped domestically adds to the supply, and thus lowers the cost globally.
Would you have a problem selling domestic grain to oversees buyers? What if the grain was shipped to the east coast by rail first, and made into flour? Would you be OK with that?
No. My cars do not run on natural gas. My neighbors’ cars do not run on natural gas. None of my friends cars’ run on natural gas (and I am a reformed moto-head). Anything that gets away from the standard of gasoline requires further investment. There are small pockets of natural gas filling stations for niche uses such as commuter bus/municipal vehicle fleets.
What about the domestic privately owned automobile fleet? Domestic Vehicle Miles Traveled (VMT) peaked in 2007 and are in steady decline. No investor with half-a-brain would put his money in installing the infrastructure for public vehicle fueling en masse. That leaves the government… and they are broke.
Perhaps “energy independence” shall come when domestic demand falls to meet domestic supply.
Investors is a broad definition. I have no problem when one puts up money for himself or others to start or continue a business. with the money going to employees in the creation of jobs, in new equipment or maintenance of old, or new or improvement to building, etc. But those who invest then gets rid of employees, close factories or stores or whatever, and leave a hole in a town’s economy because he wants to make 80% of $100 instead of 50% of $200 don’t get any praise from me. Nor do those investors who cheapen a product or service and pockets the savings rather than passing it on to the consumer or short changes the consumer with junk get my admiration. These guys will buy and bankrupt a company because they want the money not the operation or they take the money which used to be collected and banked locally sent off to a bank hundreds or thousands of miles away at best, off shore at worst. Don’t tell me I’m wrong because I’ve been involved with businesses that have done just that. Even WalMart is more concerned about the collections at 4PM so they can invest overnight and and bolster their stock price when the bell rings in the morning. Investors are not America’s White Knights as often as they are the Dark Deceivers taking more from us than they give…not a break even, but total robbery. I don’t deny a fair profit from a fair price and a quality and sincere product and service. But that ain’t the way its done in the USA anymore…or at least with enough frequency to stimulate or fortify our economy.
In essence, the U.S. did annex Canada back in the 50’s with agreements and long term contracts with Alberta to ship oil to the U.S. under unbelievable restrictions, even to the point of first priority oil to the U.S. even if canada cannot provide for itself, I would assume these rules are still in effect, one reason Canada is looking for other markets (China, perhaps?) to get a better price for their crude.
Cheap oil to the U.S. which then in turn sells it to foreign buyers, Canada eh?
I am also skeptical that The US will become petroleum self-sufficient. The article says it may take 20+ years, and a lot can happen in the meantime. The article did confirm what I had said before, that even if pipelines are not built from the mid-west fields to eastern refineries, pipelines will surely be built to the gulf coast, from where tankers could take the crude to the east coast refineries (leaving the RRs as niche players) .
But the question is, do we have to be petroleum dependent at all? Solar, GEO Thermal, wind, and who knows what else there might be, could supplant petroleum for many energy uses. The more we use any of them the less we need fuel/heating oil and gas. Part of the problem is that today’s producers and investors in oil and gas are fearful they will lose if we change over…others have the foresight to know to work at developing new technologies and move with the flow.
That damned Trains magazine cover and banner are covering this up so I can find the “post” button…out damned banner, I sy out!
Part of the problem is that many people continue to believe that all crude oil is the same, which it definitely isn’t. Refineries are engineered to process crude oils within a certain range and cannot handle other types without major rebuilding. A refinery in Houston designed to process heavy Venezuelan crude is not going to be able to process light Bakken crude very well, if at all.
Not just Americans - all users are getting screwed - Foreign & Domestic
But since then it could be argued that there is a little more parity.
I live in New England and one of our biggest fuel suppliers is a Canadian Company that refines,ships, and distributes Gas and Diesel (Hint, their prob. the biggest corporation in the Canadian Maritimes and the name begins with an “I” and ends with “rving”). Though I gather that much