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

[Flubber]

Originally posted by Velociryx
Before ground can be broken, there's an enormous, long, and complex process that has to be undertaken, and all of that starts with a feasability study (Flubber, please correct me if I'm wrong).


-=Vel=-

Close enough and I assume procedures vary by companies but the very FIRST step is a company would be for someone to "identify the opportunity"-- essentially someone has to be looking at thse facts and believe at a superficial level that there is an opportunity.

That memo would get kicked up a chain until it got high enough for someone to actually spend some money. It can get killed at any stage by a contrary decision. Some companies have determined they don't want to be in the refinery business. Why ? It usually has something to do with focusing on strengths.

Heck in canada, Chevron sold all of its conventional Alberta properties to focus on the offshore north and oilsands. At the same time EnCana is selling all of its offshore stuff to focus more on conventional. Why? each thinks they can be better than their competitors in their chosen areas . . .

Back to refineries . . . that memo would have to convince someone somewhere that this is worthy of another look. A preliminary feasibility study would probably cost tens to hundreds of thousands since there would have to be economic modelling for a 50 year life,design assumptions and options, construction costs, risk factors, environmental concerns. If that comes out with results that look good, then someone would probably authorize a detailed study that would likely cost millions.

Etc Etc-- Big companies are very deliberate in how they spend money

[Flubber]

Originally posted by Kidicious


You don't know that for sure. The found something on Enron.

and I could say that we might "find something" on you in a child pornography investigation because they found something on another individual . .. What's your point ?


Edit --and you could say the same about me or any other person on the board. You don't know "for sure"

Do we live in a world where we assume malfeasance without any evidence?

You should know in the post-Enron world that the audit standards are much much stricter and corporate decisionmaking is subject to much more oversight

[Flubber]

Originally posted by Kidicious
Flubber,

The projected ROR and the risk analysis are also different for each proposed project. Shouldn't they have found at least some profitable projects.

Among existing refiners, they have as I have seen materials talking about expansion and new abilities to create gas that meets new standards. Obviously some benefits were seen to those "projects"


On new projects, I'm assuming that no one found a project for North American refining that met their thresholds in a time frame that would have resulted in construction at present. Since potential parties would include many who currently own ZERO of the current US refining market, arguments about wishing to maintain ther status quo are moot.

[Lawrence of Arabia]

soon were gonna find out that labor is the only creator of wealth.

[Flubber]

Originally posted by Lawrence of Arabia
soon were gonna find out that labor is the only creator of wealth.

I don't think kid wants to go around on that one again. If he did , we could probably save time by going back to an old thread and everyone cutting and pasting in the applicable response

[KrazyHorse]

Originally posted by Lawrence of Arabia
soon were gonna find out that labor is the only creator of wealth.

The labour definition of value has its uses, just as the market definition of value does

[Flubber]

Originally posted by KrazyHorse


The labour definition of value has its uses, just as the market definition of value does

Lets everyon agree completely and without reservation with the above statement so we can all move on

[Kidlicious]

Well most people today believe that the value of gas isn't as much as what they pay. What does that say about the market price theory.

Flubber,

I understand that people in the energy industry are very conservative, but something about this just isn't right. In order for an investment to have good returns it needs to be made at a time that will take advantage of high prices or increased demand. That's why you don't just look at past returns. They should have built the refineries already. They should have been building them when returns were low so that they would be built now when returns are high. Now, supposidely (looking at historical data) they are going to build refineries. Well, normally that would be a screwed up way to invest. Yet they are making good profit, because none of them invested at the 'efficient' time.

[Lawrence of Arabia]

and as productivity rises, wages decrease.

[Kidlicious]

Shut up or contribute LoA. On second thougt...

[Velociryx]

The rest of your post is complete crap. I've learned not to continue to teach the same people, the same basic economic concepts over and over here, when they never get it.

Coming from someone who makes a habit of pwning himself in threads like this, forgive me if I'm not inclined to be overly concerned that you feel this way.

I've already stated that I don't care who's fault it is. If they've managed to create this situation then the've been good business men. If they've just fallen on it on accident then they are lucky. I don't care it's not relevent. Stop bringing it up. You need to focus on what is relevent or the discussion is over as far as I'm concerned.

Really? So this means that you no longer hold the position that the companies in question wield monopoly power? (you remember, the multi-page rant you went into earlier? It seemed that then, you were QUITE concerned about "whose fault it was" )

You're not picking on me. You're just making yourself look stupid again. It doesn't seem to matter that you buy gas like the rest of us. You are so far into this living vicariously through the megarich that you get turned on when they gouge the common fella even if it's you. It severly compromises your ability to see things clearly. Most people today see plainly the situation. Why do you think even Dubya is proposing legislation to do something about it?



Trust me Kid, with you in the thread, everyone else looks like Einstein.



-=Vel=-

[Kidlicious]

Originally posted by Velociryx
The rest of your post is complete crap. I've learned not to continue to teach the same people, the same basic economic concepts over and over here, when they never get it.

Coming from someone who makes a habit of pwning himself in threads like this, forgive me if I'm not inclined to be overly concerned that you feel this way.

I've already stated that I don't care who's fault it is. If they've managed to create this situation then the've been good business men. If they've just fallen on it on accident then they are lucky. I don't care it's not relevent. Stop bringing it up. You need to focus on what is relevent or the discussion is over as far as I'm concerned.

Really? So this means that you no longer hold the position that the companies in question wield monopoly power? (you remember, the multi-page rant you went into earlier? It seemed that then, you were QUITE concerned about "whose fault it was" )

You're not picking on me. You're just making yourself look stupid again. It doesn't seem to matter that you buy gas like the rest of us. You are so far into this living vicariously through the megarich that you get turned on when they gouge the common fella even if it's you. It severly compromises your ability to see things clearly. Most people today see plainly the situation. Why do you think even Dubya is proposing legislation to do something about it?



Trust me Kid, with you in the thread, everyone else looks like Einstein.



-=Vel=-

Yeah, I just have a degree in Economics and another one in Accounting. But I'm always wrong and you're always right. That's perfect Vel logic. Continue on with your bad self.

[Flubber]

Originally posted by Kidicious



In order for an investment to have good returns it needs to be made at a time that will take advantage of high prices or increased demand. .

See the very very best investments are the ones that will make a decent return even in the abscence of those things.


My personal view is that a lot of oil companies won't even seriously look at refining since its not a business they want to be in.

Even though they are an "oil company", a refining operation gets the same amount of attention before rejection as an iron ore mining one. Its not their area of expertise. Its the same with natural gas storage and pipelines . . . some companies get involved while others avoid it entirely.

I suspect that some of the current refiners are in the business more from inertia than anything else and that an opportunity in refining would not be seriously considered.


You can say all you want that companies in a "competitive environment" should go for profitable opportunities but thats simply not true. Google does not do oil or mining and Exxon hasn't done much clothing retailing. You might protest that refining is part of the oil business and the simple answer for some companies is that it simply isn't. They retain no expertise in the area and are focused on other portions of the business.

[Flubber]

Originally posted by Kidicious


Yeah, I just have a degree in Economics and another one in Accounting. But I'm always wrong and you're always right. That's perfect Vel logic. Continue on with your bad self.

Try not to make it personal. I don't care if a person has a PHd, either what they say makes sense or it does not. My degrees are irrelevant and I bring up my oil experience to provide a context for my comments.

I have seen very little in what kid says that makes sense starting with the initial assumption of the exercise of monopoly power when an industry has a pathetic below average ROR unless you pick ridiculously short time periods for the assessment.

Second I have not seen a refutation of the idea that it is the VERY competitive markets that will not see new entrants since there is insufficient profitability to warrant entry

[Kaak]

U.S. refiners produced 375,000 barrels per day (bpd) more gasoline last week than the week earlier, government data showed. That prevented gasoline stocks from falling as much as analysts had forecast last week.

Yup, there is no conspiracy, and no price fixing. They just found some extra capacity. Amazing.