Down with the evil Gas lords II: Kaak's Revenge!

[Kidlicious]

Originally posted by Flubber




You want to ignore margins for the last 15 years and just consider THIS year when discussing why multi-billion dollar investments are made or not made. That is laughable. Do you realize how UTTERLY silly that approach is?

Oh and your "record levels" is an 18% rate of return . . . hardly high in most industries.

You could pick any numbers. Convienienly you did not use the numbers from the 1980s. But all of those numbers are irrelevent. The only numbers that matter are the current ones, because they spell out the truth for you. The truth is that there aren't enough refineries. The producers intentially did not make enough refineries to increase their profit. That means that the market is not competitive, and that prices could be lower if it were.

It's that simple. Stop trying to make it harder, with a silly argument over which numbers to use.

[Velociryx]

Whether or not 18% is obscene is irrelevent. It is telling that the market is undersupplied.



You needed a rate of return to tell you this?

Of course the market is undersupplied....or did you miss the part where a war in Iraq was disrupting oil supplies, and that a big hurricane knocked a significant portion of our refining capacity offline for a while (to say nothing of the political upheaval in other regions, including your beloved Venezuela, where, IIRC, production is down also). To say nothing of the fact that demand for oil is exploding in China and India.

Production = Down.

Demand = Up.

This means that there is less, and that more people are wanting it.

Less crude = less gas = higher prices for what gas there is.

Building more refineries will not correct this portion of the problem, but no worries, as soon as the profit margins make additional refining capacity attractive, more will be built, and not just because "Kid sez so."

-=Vel=-

[Imran Siddiqui]

Originally posted by Kidicious
You could pick any numbers. Convienienly you did not use the numbers from the 1980s. But all of those numbers are irrelevent. The only numbers that matter are the current ones, because they spell out the truth for you. The truth is that there aren't enough refineries. The producers intentially did not make enough refineries to increase their profit. That means that the market is not competitive, and that prices could be lower if it were.

It's that simple. Stop trying to make it harder, with a silly argument over which numbers to use.

Since the rate is high now, even though it was piddling in the last 15 years, this proves they INTENTIONALLY did not make more refineries... because the rate of return is high now. It wasn't close to as high before... because in Kid's world refineries are finished in.. oh, 2 hours.

[Kidlicious]

Originally posted by Velociryx
Less crude = less gas = higher prices for what gas there is.

There isn't less crude. Do you think we've reached peak oil? Honestly Vel, come to class more prepared.

[Velociryx]

You could pick any numbers. Convienienly you did not use the numbers from the 1980s. But all of those numbers are irrelevent. The only numbers that matter are the current ones, because they spell out the truth for you. The truth is that there aren't enough refineries. The producers intentially did not make enough refineries to increase their profit. That means that the market is not competitive, and that prices could be lower if it were.

It's that simple. Stop trying to make it harder, with a silly argument over which numbers to use.





And this is typical Kidonomics.

Trends don't matter. Historical data don't matter.

Just pick a single year that makes my argument look good, and say that this is the number we ought to be looking at.

How did you survive in Economics class, Kid? I mean....it must have been torture for you.

-=Vel=-

[Velociryx]

There isn't less crude. Do you think we've reached peak oil? Honestly Vel, come to class more prepared.

Stop being obtuse. There's less crude coming out of the ground, unless you think that it's a myth that production tumbled in Iraq and Venezuela, and other oil producing parts of the world.

-=Vel=-

(come to think of it, you might!)

[Kidlicious]

Originally posted by Imran Siddiqui




Since the rate is high now, even though it was piddling in the last 15 years, this proves they INTENTIONALLY did not make more refineries... because the rate of return is high now. It wasn't close to as high before... because in Kid's world refineries are finished in.. oh, 2 hours.

I'm assuming that they can forecast demand.

[Kidlicious]

Originally posted by Velociryx
There isn't less crude. Do you think we've reached peak oil? Honestly Vel, come to class more prepared.

Stop being obtuse. There's less crude coming out of the ground, unless you think that it's a myth that production tumbled in Iraq and Venezuela, and other oil producing parts of the world.

-=Vel=-

(come to think of it, you might!)

My God man. Fix yourself up.

[Imran Siddiqui]

Originally posted by Kidicious
I'm assuming that they can forecast demand.

Because they can predict hurricanes and wars years ahead of time? What, you think they are Nostradamus?

[Velociryx]

My God man. Fix yourself up.

Please explain.

-=Vel=-

[Kidlicious]

Originally posted by Imran Siddiqui
Because they can predict hurricanes and wars years ahead of time? What, you think they are Nostradamus?

The point is that if the market were competitive some of the producers would have forecasted correctly higher demand and expanded, or new competitors would have entered the market.

[Kidlicious]

Originally posted by Velociryx
My God man. Fix yourself up.

Please explain.

-=Vel=-

Oil production is not decreasing. That would be an oil shock. The consequences would be much more severe.

[Imran Siddiqui]

Originally posted by Kidicious
The point is that if the market were competitive some of the producers would have forecasted correctly higher demand and expanded, or new competitors would have entered the market.

They must be super predictors! Ah, I see. So in order for it to be ok in the Kidiverse, the ones who run business have to be ubermench who can predict acts of God.

Yeaaah...

And it kind of takes a while to get a refinery up and running. If the rate had been 18% for the last 5-10 years, maybe you would have seen it.

Not every industry is ball point pens. Some require a lot of initial cash to get into it.

[Velociryx]

The point is that if the market were competitive some of the producers would have forecasted correctly higher demand and expanded, or new competitors would have entered the market.

The billion dollar price tag makes just casually building a new refinery a bit daunting, don't you think? I mean....maybe you've got that kind of cash lying around (being all-seeing and all-knowing), but for most folks, that's a lot of coin.

Further, the historical returns indicate that you could get a better return on your money by investing in certificates of deposit than you would on a new refinery....perhaps this has something to do with the fact that no additional ones were built? I'm just guessing here.

Oil production is not decreasing. That would be an oil shock. The consequences would be much more severe.

You know...you're right. The war in Iraq didn't disrupt supplies. The political turmoil in Venezuela didn't cause their output to drop, either. Nor in any of the African hellholes currently under varying degrees of civil war.

It's a myth.

I guess it's also a myth that China and India are demanding more oil?

You know...lies built upon lies by those greedy bastards at Exxon?

Tell us all about it, Kid.



-=Vel=-

[Kidlicious]

Originally posted by Imran Siddiqui


They must be super predictors! Ah, I see. So in order for it to be ok in the Kidiverse, the ones who run business have to be ubermench who can predict acts of God.

Yeaaah...

And it kind of takes a while to get a refinery up and running. If the rate had been 18% for the last 5-10 years, maybe you would have seen it.

Not every industry is ball point pens. Some require a lot of initial cash to get into it.

The fact is that no one expanded and new competitors didn't enter the market and now the market is undersupplied and we have monopoly situations.