shortage of gas

[Topaz]

The industry committee hear today from Shell Oil that they want to sell their refinery or turn it into a terminal. You can watch the video and it seems to be when they shut down in August, that there will some shortages because Shell supplies the some of Ontario, the very Northern Territories, and part of the Martimes. Sarnia On, can't supply enough because it only produces half of what Shell does in Montreal. http://www.cpac.ca/forms/index.asp?dsp=template&act=view3&template_id=179〈=e

[Jack Weber]

Oil companies manipulating the supply and demand issues of the the oil market???

MMMmnnnnnooooo..I don't believe it.

Petro-Canada did the same thing several years ago in Oakville,Onatrio.The Trafalgar refinery was clearly profitable right in the heart of Southern Ontario,BUT,Petro-Canada could get alot of money selling th equipment off to a company in Pakistan plus the longterm profitability of squeezing supply...

So.....

[William Ashley]

The industry committee hear today from Shell Oil that they want to sell their refinery or turn it into a terminal. You can watch the video and it seems to be when they shut down in August, that there will some shortages because Shell supplies the some of Ontario, the very Northern Territories, and part of the Martimes. Sarnia On, can't supply enough because it only produces half of what Shell does in Montreal. http://www.cpac.ca/forms/index.asp?dsp=template&act=view3&template_id=179〈=e

This is very disconserting, I would of though that shell profited from its refining operations.

I personally think investing in microrefineries is an economic option - that would bring lower gas costs. Already gas is 1.20 a litre where my home is. Shell is one of the three gas stations and the "major one" I can only guess what a gas price increase would do - 1.30 1.40 a litre.

Canada has a very small number of refineries, yet very large oil production - most profit in petroleum is done by the refining process.. so it seems a huge economic loss in not having local refineries to produce petroleum by products.

Edited July 21, 2010 by William Ashley

[Jack Weber]

This is very disconserting, I would of though that shell profited from its refining operations.

I personally think investing in microrefineries is an economic option - that would bring lower gas costs. Already gas is 1.20 a litre where my home is. Shell is one of the three gas stations and the "major one" I can only guess what a gas price increase would do - 1.30 1.40 a litre.

Canada has a very small number of refineries, yet very large oil production - most profit in petroleum is done by the refining process.. so it seems a huge economic loss in not having local refineries to produce petroleum by products.

They probaly do mak alot of money of the products it refines.

I'll bet they've made the cynical decision that they can make more money if the supply is squeezed.

<<putting tinfoil hat on for a moment>>

I would not be shocked if this was done by colluding with the other oil companies in this country with the full knowledge that the price at the pump would go up for all...

[Shady]

You guys are hilarious!

Aren't you the same group who hates that we use oil and hates that we drill for oil? You should be cheering this! It means higher prices, and a lower consumption of gasoline. You can't have it both ways.

Practice what you preach or stop preaching.

[Jack Weber]

You guys are hilarious!

Aren't you the same group who hates that we use oil and hates that we drill for oil? You should be cheering this! It means higher prices, and a lower consumption of gasoline. You can't have it both ways.

Practice what you preach or stop preaching.

Not at all...Oil sands developement does'nt bother me at all..

I don't believe the climate change drivel at all...

But I don't think Big Oil is actually above manipulating a market for it's own gain.

[GostHacked]

Not at all...Oil sands developement does'nt bother me at all..

I don't believe the climate change drivel at all...

But I don't think Big Oil is actually above manipulating a market for it's own gain.

Considering there has not been a new oil refinery built in North America in the last couple decades.

Edited July 21, 2010 by GostHacked

[Jack Weber]

Considering there has not been a new oil refinery built in North America in the last couple decades.

Sure...

Demand either stays the same or increases,but the refining capacity decreases...

And all the oil companies charge the same amount for gas!

Nevermind the loss of jobs,benefit premiums,capex on equipment...

[GostHacked]

Sure...

Demand either stays the same or increases,but the refining capacity decreases...

And all the oil companies charge the same amount for gas!

Nevermind the loss of jobs,benefit premiums,capex on equipment...

Well less refineries means less overall production, regardless of how much oil is pumped out of the ground. Less refineries with more demand = manipulating the cash cow to the max.

[msj]

Just imagine if consumers got together and walked/biked more often. Imagine if they consumed less crap (much of it made with and by using petroleum products).

Get enough of these people together (perhaps using the intertubes powered by hydroelectric, of course) and we have a vast conspiracy to manipulate gas/oil prices down as supply drops....

IOW, if you don't like the price, then don't pay it.

I have made my choices in the past few months and have seen my gas costs drop by almost 50% so I'm in on the conspiracy.

[Wild Bill]

Considering there has not been a new oil refinery built in North America in the last couple decades.

Exactly, GH! The oil companies figured out that by building a bottleneck into the system by not having enough refining capacity they could artificially hike the price of gas.

However, that's only HALF of the story! What never gets mentioned is that over those past couple of decades our governments have imposed so many new environmental rules on refineries, particularly on any new ones, that it would be all but impossible to run a newly built refinery profitably!

The governments have painted themselves into a bit of a corner. You can't force a company to build a money losing refinery. What's more, the government doesn't want to spend the incredible amounts of money to build a refinery that lives up to their own expensive rules!

So, we just don't get any new refineries!

[Hydraboss]

It's not some kind of conspiracy theory...it's smart business practice.

If I sell widgets (that everyone needs) for $1.00 and it costs me $0.30 to produce, then I make a pile when I sell a pile. If only half as many people want widgets, I double the price to $2.00 and then I not only make the same gross revenue, but I gain the $0.30 per unit that it doesn't cost me to build the widgets no one wants. So instead of making $0.70 per widget, I actually make $1.70 (because I have a ROI based on the sales of two with the output cost of only one).

Same with oil. Due to the cost of production to the pump, the more I make per unit the less of my commodity I have to produce. Since people (for the forseeable future) will still need my oil, I don't have to worry about them looking at alternative sources for energy because nothing even comes remotely close to filling the need (cars don't run on nuclear power yet). It all gets bought eventually. If it doesn't sell as fast as I would like, I raise the price again to maintain my gross and net profits. The higher the price - the higher the margin.

As for refineries Bill, there is very little difference in practice between an oil sands production facility and a refinery (I've been involved with both). Different parts - basically the same regulatory requirements. And we're building production facilities left and right in Alberta. Why would ANY oil company want to remove the "bottleneck"???