Thanks Obama!

[Ollie]

Look at last year. High prices per barrel = US production. Why then did all the rigs shut down this year in Colorado, Wyoming, North and South Dakota, Montana? They shut down because the price per barrel dropped. With the price increasing, some of coming back on line.

I should not have stated gas prices, I should have stated oil, as you can tax gasoline to alter the price of gas but not have any effect on oil or rather the price per barrel.

They didn't quit pumping oil.
They quit EXPLORING for oil.
They know where there are HUGE deposits of oil.
Unfortunetly the government has made it SO expensive to get that it isn't worth their time, that or it is off limits.

And actually the wifes company is putting 3 rigs out this month that had been stacked out.


snowmobiler
Won't happen. Obama and the dems WON'T let it happen.
They will open drilling, drop taxes on oil, what ever it takes to keep it below 4 dollars a barrel it at all possible.
They campaigned on the super high price of oil and the bad economy.
How do they then defend against the exact same thing while they are in charge??
If gas gets back up over 4 dollars a gallon it would be a route in 2010 and the dems know it.

 

[ruffryder]

They didn't quit pumping oil.
They quit EXPLORING for oil.

Funny thing, the fields in Wyoming have been shut down all winter and don't show any sign of starting anything up yet at 70 a barrel.

Those two comments seem contradictory...

 

[Vertical_Escape]

What utilization figures aren't taking into account is the growing number of refineries operating with systems no longer capable of running all out due to wear on systems not having been worked over as was the norm every few months/years. 10 years ago shutdown season was easy to get work in a refinery area due to large number of outages. Recent years have seen many of these postponed to allow units to remain in production at reduced rates to compensate for wear.

Basically quite a lot of these units are running on borrowed time. Eventually they will be forced to bring units offline to rework.

 

[Ollie]

Those two comments seem contradictory...

Not at all.
When oil bottomed out, it was no longer financially feasable to make a profit exploring for oil. It can cost well over 250k to drill ahole "looking" for oil. If there is not oil it is a total loss. If there is oil but the flow is bad, it is a bust.

If they found oil and put a local pump on it, yet it costs more to get it out of the ground and trasport it than the oil pays, you might as well shut the well head down till the price comes back up.

It all depends on how much oil is in the ground and at what rate it is flowing.
THat will determine if it is possible to keep it open.

 

[ruffryder]

If they found oil and put a local pump on it, yet it costs more to get it out of the ground and trasport it than the oil pays, you might as well shut the well head down till the price comes back up.

You mean they will quit pumping?

They didn't quit pumping oil.

You are saying two different things, me thinks..

 

[ruffryder]

What utilization figures aren't taking into account is the growing number of refineries operating with systems no longer capable of running all out due to wear on systems not having been worked over as was the norm every few months/years. 10 years ago shutdown season was easy to get work in a refinery area due to large number of outages. Recent years have seen many of these postponed to allow units to remain in production at reduced rates to compensate for wear.

Basically quite a lot of these units are running on borrowed time. Eventually they will be forced to bring units offline to rework.

In your example, I would assume that operable capacity would change based on refinery unit condition.

As to the reduction in down times, could it also be that due to better processes that the time has drastically been reduced? I know in nukes, the down time use to be quite large with a online time of around 70 percent or something, then they mothballed one and the other units started getting around 90%. Just some other possibilities.

 

[Ollie]

You mean they will quit pumping?



You are saying two different things, me thinks..

No, you are just getting the terms confused.

The big drilling rigs don't pump oil. They just drill holes. Those are oil rigs or just rigs.

When oil drops below 65-75 dollars a barrel it isn't cost effective to drill for oil. It costs to much.

Now the term pumping oil or pump rigs are the stand alone units you see sitting in fields and such. Their whole job is to "pump" the oil up to the surface. It is then put in storage tanks for later trucking or pumped into oil pipe lines. Lets say that with each full rotation (one full pump cycle) they get 1 gallon of oil. Ok, if it costs 20 dollars to get that one gallon of oil to the refinery then as long as the price of oil stays above 20 dollars you keep pumping. If you only get 1/4 of a gallon of oil per cycle, that equates out to the price being 80 dollars a gallon to make a profit. So if the price of oil is less than 80 dollars they will shut down that well head till the price comes back up.

That is a simplified way of putting it, but it makes it easy to understand.

 

[CleElum Sledhead]

Has nothing to do with him. At least we aren't paying $5 a gallon like last year

Exactly my point. Guess you missed my sarcasm.

When fuel prices went up when Bush was in office, the liberals screamed it was Bush's fault for numerous false reasons. When fuel prices go when the Great One is in office, heck, it must still be Bush's fault, sure can be the Great One.

Bottom line, like others have said, oil is a commodity that is traded on the open public market. It will go up with speculation, go up with increased damand, go up with production issues that limit output, etc.

Oh, and it will go down for one or two reason too. Like the world economy going into the crapper. As the economy comes back, you will most likely see $5 gallon fuel again sooner than you wish IMO.

 

[Vertical_Escape]

In your example, I would assume that operable capacity would change based on refinery unit condition.

As to the reduction in down times, could it also be that due to better processes that the time has drastically been reduced? I know in nukes, the down time use to be quite large with a online time of around 70 percent or something, then they mothballed one and the other units started getting around 90%. Just some other possibilities.

Some, not 100%, of these units are operating at reduced capacities due to constraints placed on equipment usability.

Outages are a necessary part of the refinery process. Exchangers will plug, reactors and associated systems will begin to wear. Metals and there properties haven't changed, they still wear out from product flow as well as the temperatures these units run at. I've personally seen numerous ocassions of "patching" piping and equipment to keep it up and running, even if at a reduced capacity.

This isn't the case all of the time in all of the refinery's, but it is happening. In some it's to the point alot of workers(contractors) won't work in them because of the danger. I'm one of them, not enough money around to get me to set foot in an Amoco refinery anymore.

 

[ruffryder]

Some, not 100%, of these units are operating at reduced capacities due to constraints placed on equipment usability.

Outages are a necessary part of the refinery process. Exchangers will plug, reactors and associated systems will begin to wear. Metals and there properties haven't changed, they still wear out from product flow as well as the temperatures these units run at. I've personally seen numerous ocassions of "patching" piping and equipment to keep it up and running, even if at a reduced capacity.

This isn't the case all of the time in all of the refinery's, but it is happening. In some it's to the point alot of workers(contractors) won't work in them because of the danger. I'm one of them, not enough money around to get me to set foot in an Amoco refinery anymore.

Wow, interesting info..

 

[ruffryder]

No, you are just getting the terms confused.

The big drilling rigs don't pump oil. They just drill holes. Those are oil rigs or just rigs.

Cool, that explains why what the people were doing that are out of work.

So if the price of oil is less than 80 dollars they will shut down that well head till the price comes back up.

= stop pumping... That is what I have been saying...

Isn't the amount of exploration tied to the cost of a barrel of oil the same as if they pump the oil or not? Like in your example above? If it is too costly to explore, it is probably getting close to being too costly to pump too, taking market uncertainty out of the equation.

You say terms confused, but were are saying the same thing with the same words, except you use the word "no" in front of them.

 

[Ollie]

Cool, that explains why what the people were doing that are out of work.



= stop pumping... That is what I have been saying...

Isn't the amount of exploration tied to the cost of a barrel of oil the same as if they pump the oil or not? Like in your example above? If it is too costly to explore, it is probably getting close to being too costly to pump too, taking market uncertainty out of the equation.

no not really.
It is a LOT cheaper to pump the oil than to explore for it.
With pumping the oil you have the costs of transportation and maintenance of the unmanned pump. You know the oil is there and how much you are getting. No questions, no uncertainty.

With exploring, you have a multi-million dollar rig, running 24 hours a day with 3 crews (from 3-5 people per crew), plus cost of drilling pipe, mud, etc. It can cost hundreds of thousands of dollars to punch a hole. If you miss, you get nothing for it. If you hit, you still have to frak the well and see how much flow you get to see if it will be a paying well or not.

 

[Dogmeat]

Wait 6 months. We'll be at $5.00 a gallon gas ...

Then Obama is going to use it to completley drive the last remaining inklings of the US energy industry out of the country once and for all, and when that happens, the rest of the economy will finally collaps, and we're now living in a facist liberal dictatorship.

 

[bobback]

I know the President has nothing to do with the gas prices...I just like blaming the great one b/c everyone blamed Bush.

You notice we are still at war, yet I have seen no war protesters since the great one took office?...i started this one as a new thread, as a whole other topic.

Ruffryder...care to comment on this war fact? Please do on the new thread.

 

[Gainster]

I know the President has nothing to do with the gas prices...I just like blaming the great one b/c everyone blamed Bush.

I love it when Great minds think alike

Reap what you sow or Karma