Favorite 2012 Republican Candidate

[Popeye_Card]

We're now citing an article written in the Bellingham Herald (whatever that is) by two global warming activists?

The article aside, domestic and Canadian production is as high now as it has ever been and expanding every day. We already have exciting new domestic sources in the Bakken, Utica, and Eagle Ford shales. To the point where North Slope drilling is slowing down despite plenty of reserves remaining, because it is cheaper for companies to drill elsewhere.

Yet the price of refined products is still high. *More* drilling doesn't seem to be driving down prices. You could argue that removing some of the regulations/taxes tied to these shale plays could help, but not to the point where we are going to see $2.50/gallon gas immediately. Plus with the delicate drilling/fracking procedures involved, I don't think we want less regulation.

I don't see the Keystone XL project being a long term solution either. Will it give the gulf coast another cheaper crude source? Sure. But the project helps Canada sell more crude than it helps the US drive down prices. It would be a short-term bump for employment in a fairly specialized construction industry. But the environmental threat that has thrown on the brakes is legit. The aquifier is extremely important, and issues with recently constructed major pipelines are good reasons to not just give the green light.

[Freed Roger]

This song has been playing in my head, since I heard Cards mention riding to work

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[Leroy]

The only person I've seen suggest $2.50 gas is Gingrich, and he's a nutcake.

[Popeye_Card]

Another libertarian solution to potentially reduce gas prices would be to allow companies to drill into any part of America they want and allow the construction of more refineries. Once again, I'm not advocating this what so ever. Just saying that there are ways to reduce prices without increasing federal subsidies and regulating costs.

I don't think it is the government that is preventing companies from building refineries. I guess you could argue that EPA and OSHA requirements lead to refineries being unprofitable, but oil companies such as Sunoco are currently shuttering existing refineries. The margins on refining (typically $0 to $5 a barrel) just aren't profitable enough to justify the multi-billion dollar capital investment of building a refinery*. Not to mention the NIMBY's.

* Quick math. Assuming it would cost ~$10 billion to construct a new 250k BPD refinery, it would take 22 years at an average of $5/BBL crack spreads to re-coup the investment. That's not a very good ROI.

No refineries have been built since 1976 for pretty good reasons that are all government related.

Not all government related. Price of steel, cost of specialized labor, etc. all adding up to a multi-billion price tag for slim and constantly fluctuating profit margins. Refining as a whole is not viewed within the oil industry as a profitable sector, and that's within existing refineries. Yes, it is highly regulated (as it should be), but the government itself isn't making refineries unprofitable.

Sunoco can't find buyers for their east coast refineries. Refining capacity is high enough that the US has become a net exporter of refined products. Building new refineries and increasing capacity isn't the answer to gas prices.

[cards2468]

Not all government related. Price of steel, cost of specialized labor, etc. all adding up to a multi-billion price tag for slim and constantly fluctuating profit margins. Refining as a whole is not viewed within the oil industry as a profitable sector, and that's within existing refineries. Yes, it is highly regulated (as it should be), but the government itself isn't making refineries unprofitable.

Sunoco can't find buyers for their east coast refineries. Refining capacity is high enough that the US has become a net exporter of refined products. Building new refineries and increasing capacity isn't the answer to gas prices.

I don't think any of my suggestions should be considered answers to gas prices, just that suggesting the government takes action to reduce gas prices doesn't necessarily suggest using socialist methods to do so.


This is just the time of the campaign cycle where politicians try to make common people believe that they have the power to alleviate their checking accounts instantly where cost is very visible. I don't think any candidate can bring down gas prices any more than Obama can.

[vinsanity]

We're now citing an article written in the Bellingham Herald (whatever that is) by two global warming activists?

I thought this was a fairly widely accepted fact so I added a link? Huffington Post who cited the Energy Information Administration (Government agency). Then here's an an ABC study fact checking oil prices vs drilling with this graph. There's this graph of oil-rigs compared to gas prices.


As for supply/demand of oil prices, I guess that was a bit flippant to say - yes the output of of oil production drives speculation that drives the price of oil. But it's not because we can't produce more, it's that many of the OPEC countries limit production to keep the price of oil where they want it and speculators like to drive the price up with uncertainty in the middle east.

[UK]

Have there been any non-partisan projections with Paul Ryan's economic plan in regards to the deficit?

[cpebbles]

No, the CBO looked at it but they had to accept some really ridiculous assumptions he insisted on for the analysis, so it's nothing but wishcasting.

[slide_into_first]

If speculators are long, they want the price to go up but if they are short they wantit to go down. The futures markets are made up of speculators and commercial traders who work in the industry, if someone is losing they can get out at a loss or wait until prices come back to their level. It is too simple to blame the price of anything on speculators.

[cpebbles]

Newt firing a third of his staff, replacing his campaign manager with a long-time stalwart. Seems like he's just staying in the race to deny Santorum a chance now, so what is he hoping for in return? No way Romney would take him on as a running mate, so I guess just a cabinet position.