lets nationalize a few refineries

[Pulsar]

This thread is not about any govt takeover, its about a miniscule govt venture into selling gasoline , trying to heat up some competition away from record profits at our economies expense

Um, no. The United States Government doesn't know how to do anything small, nor do they know how to do anything effective.

Once again - the definition of insanity is doing the same thing over and over and expecting a different result. The government has thoroughly fucked up regulated utilities, thoroughly fucked up healthcare, fully fucked up the post office, fully fucked up Amtrack, fully fucked up our national deficit....

But it will ALL be different in thie case. Right?

It's right up there with our fried DmCowen, who would like to be able to say how much profit is too much. BAD company. BAD. You're making too much money.

There is no slippery slope with the US government. The SECOND you let them do something, they're going to run with it to the extreme and fuck it up completely. Look at the wonderful new proposal to tax vehicles based on distance driven (which would require tracking, a new government department, etc etc), or many other total disasters in waiting.

 

[CycloWizard]

wow, you got even angrier with this post. How about you contribute or leave this thread.

I would love to see your opinion on what profit margins are like for refineries.

Please limit yourself to one angry sentence

This is exactly why you're an idiot. You think that profit margins are a matter of opinion. Furthermore, you think that they should be absolutely minimal. The petroleum engineer pulled all-nighters studying the most difficult field of engineering and uses that skillset to make a product which allows you to get anywhere you need to go for almost nothing. When that almost nothing becomes higher than your arbitrary tolerance, you want him to work for free. That's exactly why I'm angry. You need him to live your comfortable life, but rather than changing your need for what he's selling, you want to throw him under the bus. The premise of your thread is evil: that those who contributes the most should be slaves to the masses who produce nothing anyone needs.

 

[JeffreyLebowski]

This thread is not about any govt takeover, its about a miniscule govt venture into selling gasoline , trying to heat up some competition away from record profits at our economies expense

It shows that you don't know how the system works. The oil companies are making record profit because Oil is a commodity that is traded on the open marker for anyone to purchase and resell.
The oil companies spends lots and lots of money to get the oil out of the ground and ship it. It is sold to refineries based on the commidty price, which is set by traders. Those of you that bitch and complain about the costs of oil better not have any retirement plans, pension plans, 401K plans or such because they probably include oil in one way or another.


The government running a refinery isn't going to help, since it is the government and people like dmcowen that won't approve new refineries to be opened so they can make more gas. If they can make more gas, the cost of gas will go down because they work of of volume sales.

And don't forget, oil refineries don't just make gas. All that wonderful plastic is made from oil. Propane is a byproduct and used to be burned off when refining oil, now it is caputured and resold so you can grill out on your patio.

If you want cheaper gas, don't take over industries, let industries work. Stop throwing road blocks in the way and causing the companies to spend a lot more money to get oil. If the environmental whackos would let the oil companies drill on land, they wouldn't have to drill in 3 miles of water and risk leaks that destroy large swaths of the ocean.

 

[davmat787]

Why would the government be able to operate a refinery more efficiently than the petroleum industry with all of its expertise and market knowledge? What aspect of the government would allow for a more profitable and efficient refinery, other than the "free" operating money in the form of taxes?

 

[Londo_Jowo]

no need to unionize workers, theres plenty of candidaes around qualified enough to be a refinery worker. Not all gov employees are unionized. I have no clue what non manual labor people do, it seems like any other factory in the industry

Obviously im not all for it but it seems like a quick way to drop a buck or two off gasoline.

Most if not all refineries are unionized. So the chances of having skilled people that aren't union members to operate and maintain the refinery will be few and far between.

 

[Darwin333]

no need to unionize workers, theres plenty of candidaes around qualified enough to be a refinery worker. Not all gov employees are unionized. I have no clue what non manual labor people do, it seems like any other factory in the industry

Obviously im not all for it but it seems like a quick way to drop a buck or two off gasoline.

a buck or two???? I assume you mean per gallon, exactly how much profit do you think refineries make?

 

[Tom]

Why would the government be able to operate a refinery more efficiently than the petroleum industry with all of its expertise and market knowledge? What aspect of the government would allow for a more profitable and efficient refinery, other than the "free" operating money in the form of taxes?

while Im not arguing with your points, we ought to remember that oil prices are manipulated by governments(opec), to what extent and effect is up for debate.

Additionally, the benefit of free markets relies on competition and elasticity of supply and demand. In the case of oil, there's limited competition between refiners, and the supply of crude oil is manipulated by governments. so it's a weird market to understand fully.

 

[werepossum]

Government owned means of production.

First time their little oil company can't compete, they'll have an automatic tax payer bailout allowing abnormal practices that would put their competition out of business.

Gets pretty expensive after that.

This. The federal government couldn't even break even running a whore house in Nevada, no way in hell we'd make a profit making something as complicated as gasoline.

 

[CLite]

Refineries make barely any money in the oil & gas market. They require tremendous capital and maintenance to keep some of the most complicated high temperature processes in the world running. If you look at pure Downstream companies [i.e. refining] like Valero compared to Upstream/mixed companies [i.e. drilling] like Exxon/Shell/BP and compare the profits you will clearly see the money is made by drilling and not refining.

During the oil spike of 2008 refiniries were actually losing money on every barrel of oil they processed. This summer they are forecasted to make a profit because middle distillate demand is up and it looks like gasoline demand will be strong as well. However it is not going to be a crazy profit.

Most of the cost of gasoline will be tied back to crude prices/transportation cost/tax/and the refinery's cost to upgrade crude.

useful article: http://macromon.wordpress.com/2011/03/04/chart-of-the-day-components-of-gasoline-prices/ keep in mind that the refining portion (~11&#37 includes all their costs so it isn't pure profit.

 

[soundforbjt]

^^^ Yep the Koch brothers are in the poor-house from those low-profit refineries they own.

 

[CLite]

^^^ Yep the Koch brothers are in the poor-house from those low-profit refineries they own.

Koch industries profits from a large variety of holdings, including oil & gas exploration. I don't know the exact types of refineries Koch owns, however refineries did used to make very large profits, especially when upgrading heavy-ends with thermal cracking. However, today the market is flooded with refineries capable of thermal cracking and therefore the extra push of profit that used to give no longer really exists. During times of high demand they definitely bring in profits, but it is nothing like the profits of oil & gas exploration.

You could just read the article I linked and see the facts about the origin of fuel prices.

 

[CycloWizard]

nm

 

[soundforbjt]

Koch industries profits from a large variety of holdings, including oil & gas exploration. I don't know the exact types of refineries Koch owns, however refineries did used to make very large profits, especially when upgrading heavy-ends with thermal cracking. However, today the market is flooded with refineries capable of thermal cracking and therefore the extra push of profit that used to give no longer really exists. During times of high demand they definitely bring in profits, but it is nothing like the profits of oil & gas exploration.

You could just read the article I linked and see the facts about the origin of fuel prices.

The Kochs operate oil refineries in Alaska, Texas, and Minnesota, and control some four thousand miles of pipeline.

They're also considered one of those "small businesses" who so dearly need tax breaks.

Read more http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer#ixzz1LzrgTREw

 

[JS80]

lol refiner operating margins are ~2&#37; and net profit margins are <1%. Many are bleeding money like crazy. Fucking retarded idea is retarded.

 

[nick1985]

lol refiner operating margins are ~2% and net profit margins are <1%. Many are bleeding money like crazy. Fucking retarded idea is retarded.

It's quite frightening at the number of people here clamoring at the idea of "nationalizing" refineries.

 

[soundforbjt]

lol refiner operating margins are ~2&#37; and net profit margins are <1%. Many are bleeding money like crazy. Fucking retarded idea is retarded.

If they're so low profit as you claim, why don't they sell them off for more profitable companies?

 

[davmat787]

If they're so low profit as you claim, why don't they sell them off for more profitable companies?

I'm no business major but I would guess because they are a safe bet. The global market for refined petroleum shows no signs of going away anytime soon.

 

[JS80]

If they're so low profit as you claim, why don't they sell them off for more profitable companies?

wtf are you talking about?

 

[soundforbjt]

wtf are you talking about?

If you owned a company only making the profits you claim the owners of these refineries make, wouldn't you look for a more profitable company to own?

 

[dmcowen674]

Um, no. The United States Government doesn't know how to do anything small, nor do they know how to do anything effective.

Once again - the definition of insanity is doing the same thing over and over and expecting a different result. The government has thoroughly fucked up regulated utilities, thoroughly fucked up healthcare, fully fucked up the post office, fully fucked up Amtrack, fully fucked up our national deficit....

But it will ALL be different in thie case. Right?

It's right up there with our fried DmCowen, who would like to be able to say how much profit is too much. BAD company. BAD. You're making too much money.

There is no slippery slope with the US government. The SECOND you let them do something, they're going to run with it to the extreme and fuck it up completely.

Look at the wonderful new proposal to tax vehicles based on distance driven (which would require tracking, a new government department, etc etc), or many other total disasters in waiting.

Good, hope all the new tax vehicles nail your ass hard :thumbsup:

 

[Darwin333]

If you owned a company only making the profits you claim the owners of these refineries make, wouldn't you look for a more profitable company to own?

Please enlighten us, how much do they really make?

 

[xj0hnx]

Please enlighten us, how much do they really make?

Bagillions dude, bagillions.

 

[CycloWizard]

What would happen if the refineries refused to play and just shut down?

 

[xj0hnx]

What would happen if the refineries refused to play and just shut down?

Grinding halt comes to mind.

 

[1prophet]

That's not how the market works. Eventually you have to buy more oil at the higher price.

Let's say you were a farmer growing corn, and you normally sell it for $2 per bushell. If the market price for corn went up to $3 per bushell, would you continue to sell your current stock of corn at the old, lower price just because that happened to be the price when you grew the corn? If you did, everyone would rush out to immediately buy all of your underpriced corn to resale it at the market price, since it would be nearly risk-free profit for them.

Let's say on your farm you happen to have 100 gallons of fertilizer in storage for use next month, that you bought at $2 per gallon, but now the price is $3 per gallon. Now lets say your neighbor farm has run out of fertilizer and wants to buy yours. Are you going to sell him your fertilizer at $2 per gallon, even though it would cost you $3 per gallon to buy more when you need it later? If you did, you would essentially be giving your neighbor farmer free money.

Few would be in a rush to buy if they were told they must take ownership of the said commodity.

If someone wants to gamble with their own money that is their business, but the way it is now you can raise the price of a commodity like gasoline by playing musical chairs in the commodities market and extract money from the person at the pump, who is lied to and is told it is supply and demand, without having to take delivery of the product.

You are not creating wealth but rather extracting wealth from those that can barely afford it but have no choice but to use the product like gasoline.

Eventually demand will drop and the bubble bursts but the money remains in the hands of the few who did nothing but play an elaborate game of poker with other peoples money.