It's not a production issue it's a processing issue. Oil changes depending on where you pull it out of the ground. It's not all the same stuff. Each requires different processing. Oil from Saudi Arabia is different and requires different processing than oil from Texas.
The majority of US refineries are tooled for Saudi oil because that has been the cheapest/most convenient option for longer than most people here have been alive.
That brings us to domestic production criticisms. It literally doesn't matter if we put an oil derrick in everyone's back yard, we simply cannot process the oil. We're only like 1M barrels off peak domestic production, and we're slowly working back up to peak. We hit peak under Trump and then it slouched off because covid. Peak was around 12M barrels. So the difference in gas prices between producing 11M barrels domestically and 12M is hardly anything. That is if you're thinking from a supply/demand standpoint.
From what I gather we're in a similar situation with Saudi oil. They're already producing about as much as they can. They can pump out maybe half a million more barrels per day, but it won't really change anything.
We could retool domestic refineries to use domestically-sourced oil. But then capitalism steps in and says no. That would require a huge expenditure of capital on behalf of the oil companies. Then what is the outcome? That their product becomes cheaper! Why would they do anything to lower prices? Why not just keep what you have, spending less on new building, and then rake in higher profits off of record-high prices? What are they going to do? Vote you out? You're a private business. Nobody is going to compete with you because you're one of the biggest industries in the world and there's only 3 of you.
So yes, it's greed. It's capitalism getting in its own way. Then there comes the part where the cruelty is the point. They want people to suffer higher gas prices. They want people to be mad. Demand for gas has already returned to 2019 levels. This situation is letting them crush any hopes of regulating them into lowering production. Biden did fuck up with foreign policy, so I don't want to pretend he's not at fault. But part of this is oil companies bullying Democrats away from green policies. As soon as a Republican congress takes over or Trump comes back, you'll suddenly see prices drop back.
This goes back to the refinery problem. These companies don't want to build new refineries or retool them if the government is just going to regulate them out of existence in 10-20 years. When a Republican gets back in, they'll calm down about that and use it as an opportunity to build more defenses against regulation.
It's not even that Democrats wouldn't also deregulate for some sweet oil money. It's just that Democrats exist as the loser party of losers and as much as they will bend over backwards for capital, they will never be respected. They will always be bullied by capital to convince everyone that their way of life is under threat from "the left" no matter how right wing Democrats are.
But even if they did decide to build tons of new refineries, gas couldn't ever come back down to $1 per gallon. It always has to go up eventually and the lower prices must get higher and higher. Falling rate of profit and all that. Maybe there's enough global politics involved so that it's not quite that simple, but then again maybe not. The Saudis are capitalist too, and the Russians.
Then what is the outcome? That their product becomes cheaper!
Yup. "Innovation" is what we're told is the secret sauce as to why capitalism is the greatest economic system ever. A capitalist innovates and implements some better process or equipment because even if it eventually causes the rate of profit to remain unchanged, before that happens the capitalist is able to make super-profits. But as capitalism moves to ever-increasing degrees of monopoly, that innovation advantage completely dries up.
Right, but what I'm alluding to is what we here all know; If your company is reporting record profits in the billions then inflation, wage increases, supply chain issues, etc, aren't the reason for price increases, they're the excuse.
It's not a production issue it's a processing issue. Oil changes depending on where you pull it out of the ground. It's not all the same stuff. Each requires different processing. Oil from Saudi Arabia is different and requires different processing than oil from Texas.
The majority of US refineries are tooled for Saudi oil because that has been the cheapest/most convenient option for longer than most people here have been alive.
That brings us to domestic production criticisms. It literally doesn't matter if we put an oil derrick in everyone's back yard, we simply cannot process the oil. We're only like 1M barrels off peak domestic production, and we're slowly working back up to peak. We hit peak under Trump and then it slouched off because covid. Peak was around 12M barrels. So the difference in gas prices between producing 11M barrels domestically and 12M is hardly anything. That is if you're thinking from a supply/demand standpoint.
From what I gather we're in a similar situation with Saudi oil. They're already producing about as much as they can. They can pump out maybe half a million more barrels per day, but it won't really change anything.
We could retool domestic refineries to use domestically-sourced oil. But then capitalism steps in and says no. That would require a huge expenditure of capital on behalf of the oil companies. Then what is the outcome? That their product becomes cheaper! Why would they do anything to lower prices? Why not just keep what you have, spending less on new building, and then rake in higher profits off of record-high prices? What are they going to do? Vote you out? You're a private business. Nobody is going to compete with you because you're one of the biggest industries in the world and there's only 3 of you.
So yes, it's greed. It's capitalism getting in its own way. Then there comes the part where the cruelty is the point. They want people to suffer higher gas prices. They want people to be mad. Demand for gas has already returned to 2019 levels. This situation is letting them crush any hopes of regulating them into lowering production. Biden did fuck up with foreign policy, so I don't want to pretend he's not at fault. But part of this is oil companies bullying Democrats away from green policies. As soon as a Republican congress takes over or Trump comes back, you'll suddenly see prices drop back.
This goes back to the refinery problem. These companies don't want to build new refineries or retool them if the government is just going to regulate them out of existence in 10-20 years. When a Republican gets back in, they'll calm down about that and use it as an opportunity to build more defenses against regulation.
It's not even that Democrats wouldn't also deregulate for some sweet oil money. It's just that Democrats exist as the loser party of losers and as much as they will bend over backwards for capital, they will never be respected. They will always be bullied by capital to convince everyone that their way of life is under threat from "the left" no matter how right wing Democrats are.
But even if they did decide to build tons of new refineries, gas couldn't ever come back down to $1 per gallon. It always has to go up eventually and the lower prices must get higher and higher. Falling rate of profit and all that. Maybe there's enough global politics involved so that it's not quite that simple, but then again maybe not. The Saudis are capitalist too, and the Russians.
Yup. "Innovation" is what we're told is the secret sauce as to why capitalism is the greatest economic system ever. A capitalist innovates and implements some better process or equipment because even if it eventually causes the rate of profit to remain unchanged, before that happens the capitalist is able to make super-profits. But as capitalism moves to ever-increasing degrees of monopoly, that innovation advantage completely dries up.
Right, but what I'm alluding to is what we here all know; If your company is reporting record profits in the billions then inflation, wage increases, supply chain issues, etc, aren't the reason for price increases, they're the excuse.