Gas prices expected to soar past $3/gallon

[That Guy]

Originally Posted by djnemo65

The argument that eco-terrorists are responsible for limitations in US oil refinement capacity is insipid. While its true that most Americans - eco-terrorists if you prefer - do not desire a refinery in their backyard (indeed, new projects have met predominantly local opposition) the Big-Five oil companies are equally reluctant to open new refineries. The reason? The status quo situation is such that, absent extant oil reserves, supply shocks artificially spike oil's market value by impeding demand. While this is bad for us, it is very, very good for the oil companies' profit lines. If you don't believe me, see a 2001 FTC report which inidicated just this: that the big five had artificially inflated prices by intentionally keeping refinement capacity low.

But more problematically, the argument for increased refining activity presumes oil supplies capable of keeping up with global demand, which they won't be able to. This is extreme myopia. Global oil consumption is predicted to jump about 40 percent over the next twenty years, at a time when Saudi Arabia will realize its peak production capacity. You should really read the stuff Houston energy investment banker Matt Simmons is writing about this right now. Pretty compelling...

thats why nuke plants would help, but the greens dont like them either... talk about a catch 22... either way, oil isn't the problem, we still got plenty of oil, its refined fuels.

The oil rigs can be back up and pumping in weeks, the refineries can't be functional in nearly the sasme timeframe. Maybe the oil companies don't like it, but i'm sure there's plenty of people (energy companies etc) with enough money that would be willing to invest in building more refinery capacity if the government cleared the red tape for them. The profit margin is pretty good...