For those who think the Ukraine conflict has anything to do with the high gas prices

So why do you suppose China hasn't increased the amount of oil they import from Russia?

 

I think if this continues, large international Chinese companies will sell some of their refinery facilities in to smaller companies which can then buy Russian oil without fear that the company's international operations will be subject to sanctions. Also, most of the Chinese refineries are indirectly state-run, and are probably waiting for an indication from their government about whether they should increase their purchases of Russian oil, since they do not want to do anything which might draw the ire of the central government. This will end when the Ukraine conflict comes to an end.

 

I think we need to sanction any country not willing to stop the sale of Russian oil. I’ve said this For the last 6 days. That’s the only real way we’re going to economically hurt Russia anyway.

 

Exactly what Biden admin policy caused WTI crude to go from $65 in Dec. to $115 now? https://www.cnbc.com/quotes/@CL.1

 

Personally I almost wonder if Biden or one of his influencers has more Russian ties than we may think. If we along with the UK and the EU banned Russian oil it would devastate their economy. It’s the largest portion of their economy equalling to over 50%. It’s an obvious spot for exploiting their weakness economically. So being it’s a huge weakness and an easy spot to point out why hasn’t he and the rest of Europe?

 

Hmmmm, let's think about that for a moment. Russia is the #3 producer of oil in the world. Many European countries are dependent on Russia for NG to heat their homes. Anything?

 

LNG is the answer. It can be shipped.

 

Yes it can. Perhaps you should do some research on the amount of time necessary to build the infrastructure needed to meet the demand in Europe. Like port facilities to offload the LNG and storage plants to distribute it.

 

I’ve done my research. I am aware of the infrastructure needed. Mike Pompeo was pushing this a few years back. If I remember correctly he even mentioned how it was needed for security. That should not slow us down. If we don’t start it, it will never happen.

 

My point is LNG does not offer an immediate solution to Europeans paying extraordinarily high prices for NG if they boycott gas from Russia. Which is why they are reluctant to do it.

 

It is truly sad that Americans are so dependent on something and yet have no understanding of it.

You don't even understand the economic chain.

First, it's the price of raw crude oil on the global market, not the US market.

Second, raw crude oil must be processed to remove water/sea water, sediments and particulate matter, and metals like Uranium, Vanadium, Nickel, Mercury, and a few others. That is not free. Unicorns don't dance around barrels of raw crude oil to get those impurities out.

Third, the processed crude oil must be transported to a refinery if not by pipeline, then by rail cars, tank trucks or ships.

Fourth, refineries have to refine the processed crude oil in the petro-chemical products you need, like gasoline.

Fifth, when producing gasoline, Sulfur is removed at the refinery and not the processing facility, and in the US, EPA Tier 3 standards limit Sulfur to 10 ppm per gallon, so if you thought removing 55,640 ppm Sulfur from crappy Canadian tar sands is free, you thought wrong. Likewise, removing 52,260 ppm Sulfur from Louisiana Sour is not free, either.

Sixth, gasoline comes in two flavors: Reformulated and Un-Reformulated. Some States like California and Kentucky require reformulated gasoline year-round, while other States like Ohio and Indiana and Missouri only require reformulated between May/June and September. Hint: reformulated gasoline costs more.

Seventh, gasoline has to be blended with ethanol in the US, and thanks to your idiotic Congress, corn is mandated instead of sugar beets even though an acre of sugar beets produced nearly twice as much ethanol than an acre of corn, so gasoline prices are influenced by corn prices.

Eighth, gasoline has to be transported by truck, rail or barge to storage tank farms and then transported by truck to gas stations. If you live along the Mississippi/Ohio River Valley, your gasoline is transported by barge and off-loaded at tank farms. If a river-boat barge captain can get mo' money hauling oil-goo to Givaudan or Wild Flavors so you can eat and drink oil, then that is what he should and will do, and if that creates a local shortage of gasoline causing prices where you live to up, sucks to be you. Likewise, if there's a shortage of HAZMAT tanker truck drivers and trucks to deliver gasoline to your gas station, and that causes prices to go up, sucks to be you.

All those things affect the price of gasoline, which is why the US exports finished gasoline, because the cost to reduce the Sulfur to 10 ppm per gallon to meet EPA Tier 3 is cost-prohibitive, meaning I'm just guessing you wouldn't wanna pay $4-$5/gallon all the time.

Then there's the matter of oils.

Americans have a caveman mentality about it. Me want rock. Me want rock now.

Aren't there different kinds of rocks? Would you use sandstone or mica as a kitchen counter-top? Um, no. There's a reason why certain rocks are used for certain things.

Oils are like tools. Would you use a Phillip's head screwdriver to remove a flat-head screw? Um, no.

Okay, then why would you use crappy Canadian tar sands to produce gasoline? Well, no one with a brain would.

Yeah, like I posted back in June 2021, WTI (West Texas Intermediate) -- one of the global benchmark oils -- was selling for about $71/barrel and Brent Blend (from the Brent Sea) -- one of the other global benchmark oils -- was selling for $73/barrel.

The best of the 5 crappy Canadian tar sands was selling for $60/barrel, and I think it was Cold Lake Thermal that was selling for $48/barrel.

So, why weren't you paying $48/barrel? I just explained all that. You only get 4-5 gallons of gasoline out of a 42-gallon barrel of tar oils.

That's why you started importing the light oils that you don't have in North America.

California Heavy and Oklahoma Heavy produce 9 gallons of gasoline per 42-gallon barrel. Illinois Intermediate about 13 gallons.

It takes 15-17 years to build an oil refinery.

How do you increase the gasoline supply right now, this minute, without building new refineries?

Simple: You import Kuwaiti Light, Basra Light, Iranian Light, Saudi Light, Murban and others that yield 23-29 gallons of gasoline per 42-gallon barrel.

Voila! In the case of Illinois Intermediate, you just doubled your gasoline supply and for Oklahoma and California Heavy, you just tripled your gasoline supply and you didn't have to build any new refineries.

WTI is an intermediate oil on the high end (Illinois Intermediate is on the low end) and Brent Blend is a light oil on the low end (Murban is on the high end of light oils).

All oils are priced against those two oils based on their usefulness.

Unless you're a developing-State, crappy Canadian tar sands are of no value and the 1st and 2nd World States have no need for them which is why they sell for $12-$25/barrel less than the 2 global benchmarks.

1st World States need the very useful light oils for their economies. 2nd World States not so much.

If WTI is selling for $110/barrel, that means Tijuana Light, Basra Light, Siberian light are selling in the $130s or higher.

Russian oils are 85% sweet light or high end intermediate and only 15% low end intermediate and heavy oils.

The US is the opposite with 85% being low end intermediate and heavy with a mix of sweet/sour and 15% light oils that are mostly sour, like Louisiana Sour.

Without light oils, your food and beverage industry collapses, your pharmaceutical industry collapses, your cosmetic industry collapses, your personal hygiene industry collapses, your liquid laundry detergent industry collapses, your ink/dye/pigment industry collapses, your plastics industry collapses and the rest of your economy follows.

That's why the Keystone Pipeline is a nothing burger. 100% of those tar sands were intended to run through the pipeline to ports on the Gulf Coast and be exported to the rest of the world, in particular, developing-States.

The absence of tar sands would only impact the price of heavy oils and low end intermediate oils,

 

It's totally relevant. When you cut out a major supplier, the demand on what's left increases.

 

Oh dear ... no it probably won't. Once a genie is out of the bottle there's no putting her back in.

Further, when are you expecting the conflict to end? It could be years.

 

I meant China will start unabashedly buying Russian oil.

Any sanctions will do no good, long-term, and Russia probably knows this.

 

This isn't true for interchangeable commodities. It's only playing musical chairs.
Doesn't really change anything.

If the buyer can start buying the same exact thing 1% cheaper somewhere else, they will do so. Since we are talking about large companies where a tiny percentage difference in price can make a big difference in profit margins. (If your profit margin is 2% and you cut costs 1%, you have just increased profits by 50%)

In the hypothetical situation I am describing, Russia is not actually being cut out of the world market. It is just being cut out of part of the market. If Russia can still sell, then overall total world supply will still be the same.

 

When supply is reduced, you can't get the goods 'cheaper somewhere else'. I'm not sure why this isn't obvious to you?

If China buys Russia's oil/gas, and retains it for personal use (which is exactly what it will do), you're only going to see stability if you live in Russia or China. The rest of the world will lose that supply, and thus have to fight over whatever is left. How you think that will equate to cheaper prices is the mystery.

 

Evidently it is not too high otherwise the idiot truck drivers and others parading into D.C. and around it today would not be wasting the expensive diesel and gasoline?????

 

It might be just the impetus needed to start weaning us off of the fossil fuel teat. Time will tell.

 

Some people hypothesize that the reason that the elite refuse to invest nuclear energy is that it is too reliable. They say elites like Bill Gates want to strangle cheap energy in the west and to monetize it for themselves by being carbon brokers. They hypothesize that this scheme could result in hundreds of billions of dollars being funneled to a few monied elite...... money that would come from the middle and working classes. This notion has been posted on this forum from time to time but there never has been a proper debunking. Perhaps you could disprove this idea.

https://www.weforum.org/agenda/2021...-harness-the-potential-of-the-carbon-markets/
https://www.innovatorsmag.com/bill-gates-invests-in-carbon-capture-startup/

There is serious ecological damage inflicted by green technology. It is mostly centered in the African/South American countries that mine the minerals used for batteries. More than 40,000 children are used to mine those minerals in highly carcinogenic environments without protection. Indigenous populations around mine sites have had to move as their community becomes a toxic dump site. We in America have a serious problem with NIMBYISM..... if it doesn't happen in our backyard or we can't see it.... it never happened.

For example, all the land in the picture below is uninhabitable, possibly for thousands of years. This is the price of lithium batteries. There is real human suffering associated with it. I have yet to see the human suffering due to global warming, all I see is rising crop yields and greening across the globe.


https://unctad.org/news/developing-countries-pay-environmental-cost-electric-car-batteries
https://africanminingmarket.com/cor...sk-in-congos-cobalt-industry-oecd-warns/5101/

 

How Canadian tar sands are mined. Not drilled and pumped, STRIP FRAKKING MINED.

 

I am well aware of the destruction associated with lithium batteries, and I'm not a fan. I'm all for nuclear as part of the solution. There are likely lots of good solutions that could be implemented or are getting close to being able to be implemented. What is keeping them back is the incentive. As long as all the infrastructure supports a fossil fuel economy, it is way easier for energy companies and associated elites to turn profits by staying with oil. They're not interested in promoting the alternative until it becomes profitable. By then, massive amounts of more damage will be done.

 

It's absolutely disgusting the damage that extracting fossil fuels cause. And its getting worse as the easy to access oil is pretty much gone.

 

It also amazes me how stupidly short-sighted the "Drill, baby! DRILL!" mob is about tapping everything right ****ing now. There will still be a viable petrochemical industry long after we stop relying on fossil fuels.

 

The real truth is that there are a lot of people who just can't adapt. Joke's on them, because:

THE ONLY CONSTANT IN THE UNIVERSE IS CHANGE

 

As you can see form the absence of responses, you are wasting your breath. It's much easier to cry "Biden did this", while keep driving the gas guzzler, than to try to actually learn about the mechanisms behind the fossil fuel supply chain.

You'd think energy is something REALLY important and people would try to understand it. They don't. I have, a long time ago, tried to educate people in posts about the laws of thermodynamics and entropy, and how they relate to everyday economics. I've long given up, since it is like talking with a wall.