One of the shows I was listening to during testing mentioned that the United States exports a lot of refined oil products made from imported crude – which sounds interesting given the rhetoric of “The United States hasn’t built any new oil refineries in ‘x’ years”… if refinery capacity is a real issue, then why are we exporting gasoline?
It turns out that in November 2010, the United States exported more gasoline than any month since the closing days of World War 2 in 1945. 70% of that gasoline is going to Mexico – shipped from the Gulf Coast.
Gasoline consumption in Mexico is 2.1 million barrels a day, and Mexico only has the ability to refine 1.6 million barrels a day. Over the past few years, Mexico has been filling that gap by importing more gasoline from Europe. Mexico only produces about 3 million barrels a day of crude.
I haven’t pinned it down, but I suspect Venezuela is at the middle of this. Much of their crude oil is about the thickness of asphalt – it is very difficult to turn into anything useful, and it can only be made by processing it through a special set of extra steps – the main place being a refinery in Houston that used to be partly owned by Citgo, the Venezuelan oil company. [The refinery is no longer owned by Citgo and the contract to process the oil expires in July 2011]
So we have Mexico’s oil production falling to barely equal domestic demand, and Hugo Chavez driving his oil business into the ground, and losing access to the only refineries that can process his oil to meet the demand in Mexico… sounds like things in Mexico are about to get a lot worse very soon.
I also seem to remember about three years ago– when gas was hitting $4 a gallon– that Mexico was subsidizing its gasoline and American citizens were going down, attaching gas tanks as big as they could to their trucks and filling their tanks with $2 a gallon subsidized Mexican gas…
…my, how things come full circle.
Just another reason to continue to look at domestic energy sources and production. Combined with the pending termoil in the middle east, we are about to get caught with our pants down (again) with $4 or even $5/gallon gas.
We need to let the oil companies build new refineries without the EPA making regulations that make construction and operation cost prohibitive. While we need to make sure the refineries have as little of an environmental impact as possible, surely there is a middle ground that balances the environmental impact with profitability.
Another thing we need to look at is alternative sources of energy such as lignite coal of which we have an abundant amount. that can be easily mined and with the current mining regulations, abandoned strip mines is a thing of the past. If implemented, this could lead to oil prices falling to $35/barrel.
The University of Texas at Arlington has worked on a process that can convert lignite into crude oil that can be refined into gasoline. Right now researchers are saying 2 tons of lignite can be converted into a barrel of oil. They have also devised a micro-refinery approach where smaller capacity refineries that produce between 1,000 and 1,500 barrels a day and cost around $5 million compared the $800 million to $6 billion for a traditional refinery which could be a way to increase production of domestic energy sources.
When I was young, a friend’s father told me that the best way to identify a totalitarian government was to see if the police force was the also the army. He was speaking specifically of Mexico.
I’d like to add to the totalitarian category the label socialist. Venezuela is in the same boat as Mexico – they can’t refine enough of their own oil to meet domestic needs.
Guess what other country can’t refine their own domestic needs? Iran. So I guess we need to add Islamic totalitarian countries to the totalitarian category.
What’s the point? These “central planners” are not capable of planning well enough to supply their own country, so the only thing that’s left is for the people to “tighten their belts”.
Welcome to the new Socialistic World comrade!
Speaking of new domestic energy supplies, for the last four years I’ve been working full time as an engineering contractor with one of the companies that’s designing and building the new generation of advanced commercial nuclear power reactors. Well, that work has now officially ground to a halt in the U.S. The zealots in the Obama administration have thrown up so many administrative and economic roadblocks to new plant construction that almost all design work has been stopped. The international consortiums necessary for major construction projects in the U.S. have pretty much evaporated and they’re looking elsewhere for more receptive regulatory environments. We never even got a chance to turn the first shovel of dirt on actual plant construction. It’s the late 1970s all over again.