Oil Prices

[Aargh]

Barriers may be huge to compete at the top but there are thousands of private oil companies of all shapes and sizes. I guess it depends on your expectations. Do you think all industries should have barriers low enough to allow anyone off the street to compete with the biggest companies in the business? I have a friend, for example, that started investing in oil properties 10 years ago and sold his company last year for $500 Million. Not a bad deal for a guy that started with a 2 man shop.

That has absolutely nothing to do with the point I was pursuing. Private oil companies are out searching for oil. A lot of them go broke. When markets go south, the little guys get swallowed by the big guys. Your friend did very well in his enterprise. Who bought him out? I'd wager a larger entity took him out of the market, which is a perfect example of how the energy oligarchy works.

Your friend making a bonanza was probably offset by his purchaser with higher refinery prices, resulting in higher prices at the pump. It's often said that when corporations pay taxes they must pass those costs off to their customers. When they buy out their competition for $500 million, they pass those costs off to their customers too. Your friend's great business acumen resulted in higher energy prices for consumers.

In a free market model entrepreneurial success results in lower prices for consumers - not higher.

[Kung Wu]

It is not suppose to.

Okay. Your original post makes it look like you are jaded about free market systems. I think what you were really saying is that you were jaded from being led to believe that oil is a free market system, and now you know it's not.

I think @pinstripers: and I misinterpreted your original intent.

[Dan]

Nothing any one oil company can do to change the price of oil. Oil is a global issue, the US free markets can't do much to change the power of OPEC.

[WuDrWu]

Of course, the US could start with changing the tax on a gallon of gas...which isn't 2% or 7.50% but about 17% of the total price of a gallon of gas right now.

[SPEShockAlum]

Keep in mind that the prices for oil generated by our friendly, local producers are usually at a $8 discount to what we see published for WTI for "Kansas Common". It's not uncommon, however, to have buyers (e.g. NCRA, CVR, HollyFrontier) pay a premium above the published Kansas Common prices to as a sign of goodwill to these producers. They're still not getting the full WTI price, but it's something.

[wu_shizzle]

Of course, the US could start with changing the tax on a gallon of gas...which isn't 2% or 7.50% but about 17% of the total price of a gallon of gas right now.

Gotta save the planet, you know...

[shocka khan]

Of course, the US could start with changing the tax on a gallon of gas...which isn't 2% or 7.50% but about 17% of the total price of a gallon of gas right now.

The federal gas tax is .18 per gallon, according to this:

http://www.washingtonpost.com/news/the-fix/wp/2014/07/07/why-the-highway-trust-fund-is-running-out-of-money-in-5-graphs/

Of course, the state also charges taxes, but I don't know how much they are up there or what they're used for (and I know here if we're collecting a state tax it ISN'T being used for the roads - they're falling apart (unless they're toll roads)).

It would sure be nice if we could get the road construction/gas tax thingy fixed. Our HCTA (Harris County Tollroad Authority) is ridiculous. I think if we're going to have to pay tolls, the tolls should only exist until the roads are paid for. It shouldn't be a piggy bank. Outside of that point, one other insight I picked up from scanning the article is that there is talk of considering a miles-driven usage tax to maintain roads, which I would also be OK with.

Oh, and by the way, I would just as soon shoot any politician (including Bill Clinton) that uses money from the gas tax to, say, pay down the national deficit and not build/maintain roads.

[RoyalShock]

I don't know how this fits into the discussion, but the NCRA refinery in McPherson has been undergoing a large expansion/update for a couple of years now.

[WstateU]

The primary reason gasoline is 'usually' cheaper in Oklahoma and Missouri; their state motor-fuel tax is considerably less than Kansas'.

[WstateU]

I don't know how this fits into the discussion, but the NCRA refinery in McPherson has been undergoing a large expansion/update for a couple of years now.

First round $400MM; second round $600MM = $1B

[shocka khan]

I don't know how this fits into the discussion, but the NCRA refinery in McPherson has been undergoing a large expansion/update for a couple of years now.

This allows NCRA to get a waiver around a LOT of EPA standards, as it is viewed by the government as 'refurbishing of existing structure' as opposed to 'new construction'.

There's a large aluminum processing facility in Rockdale (about an hour east of the Austin area) that emits so much CO2 that it creates ozone issues (and causes clean-air act failures in Dallas during the summer). It was 'refitted' and expanded when it was refitted, which allowed Alcoa to get around clean-air standards.

[SHOCKvalue]

Gotta save the planet, you know...

Man, I'm going to look like a loon here by defending a form of taxation, but - correct me if I am wrong - fuel taxes almost entirely go to fund tangible roads and bridges, not into some black hole to buy voter demographics through social engineering. I dislike all taxes because it is less money in my back pocket, but I have much less angst towards those that actually fund things that we all use and benefit from.

[SHOCKvalue]

The primary reason gasoline is 'usually' cheaper in Oklahoma and Missouri; their state motor-fuel tax is considerably less than Kansas'.

Whomever did the color selection on this map did is wrong it seems. The colors red and blue should clearly be swapped.

[SHOCKvalue]

First round $400MM; second round $600MM = $1B

I think that's what some might call a "barrier to entry."

[shocka khan]

Man, I'm going to look like a loon here by defending a form of taxation, but - correct me if I am wrong - fuel taxes almost entirely go to fund tangible roads and bridges, not into some black hole to buy voter demographics through social engineering. I dislike all taxes because it is less money in my back pocket, but I have much less angst towards those that actually fund things that we all use and benefit from.

Welcome to Brown(Broke)back Mountain, a.k.a. Kansas. IF that gas tax was being used to fund roads and bridges, it certainly isn't now.....at least part of it is going to plug a hole somewhere in your state budget. Bobby Jindal has been robbing the road fund to pay for the State Police in Louisiana for about the last 5 years. One of the reasons their roads are falling apart and exactly the same factual situation.....cut taxes to the point where services cannot be afforded or provided.....rather than admitting your mistake....you rob Peter to pay Paul.