RNC leadership change

[Jered]

Inflict ruin, free foreign policy since we won't be dependent on them... Either way, it means serious problems for Dinner Jacket, Chavez, Putin, and the Sauds.

Dinner Jacket is already wailing to OPEC because oil is at less than $55 a barrel.

[martini]

First, I would be happy with Newt or Fred or Mike Steele.

Second, we don't necessarily want oil too cheap. 50 to 60 a barrel is good. That's what the Saudi's need to break even and they won't fuck with it at that level. Incidentally the Iranians need more like 90 a barrel to be ok. I wouldn't say that the Saudi's are exactly our friends, but they are currently much less unfriendly than Iran, Syria, etc.

[First Shirt]

Someone (and for the life of me, I can't remember who it was) said that oil prices need to be in the $55-65 range, in order for domestic production to be profitable, largely because the home-grown stuff has a lower percentage of "volatiles" (?) than the light crude that comes from the Middle East.

Not sure how good that info is, but it certainly makes sense to me, and I'd be okay with that price.

[martini]

I will have to check on this, but I do remember that all the stuff coming out of Venezuela is heavy bitter crappy stuff, the only refinery in the US that handles it is the EM plant in Chalmette. I thought I remembered that Saudi and Iran are pumping crap too, but I will check and let you know.

[Aglifter]

Unless the Saudi fields have gone sour, they used to be the cheapest supply of sweet crude

[cu74]

I will have to check on this, but I do remember that all the stuff coming out of Venezuela is heavy bitter crappy stuff, the only refinery in the US that handles it is the EM plant in Chalmette. I thought I remembered that Saudi and Iran are pumping crap too, but I will check and let you know.

I don't remember the specifics, but crude oil varies widely in chemical makeup. The "type of crude typically depends upon where it is geographically found. Middle Eastern crudes vary from the sweet (very little sulfur) Arab Light (lots of gasoline/jet/diesel) to Arab Heavy (more heavy ends like bunker and asphalt) - it depends on which oil field you are getting the crude from. Some, but not all, US Gulf Coast crudes are sour (lots of sulfur) but generally are pretty light. California crudes tend to be very heavy - little gasoline and lots of paving asphalt. Utah's Altamont crude is very waxy - looks a lot like neutral shoe polish - and has to be transported in heated pipelines and heated rail cars.

Refineries are typically built to process a wide range of crudes - it isn't economical to "tie" a multi-million dollar investment to a specific crude supply that might disappear a few years into the future. At any one time, the typical refinery may be feeding several different crudes. For example, a refinery may feed a sour crude up to the limit of it's sulfur removal capabilities and still have refining capacity. Rather than reduce throughput, it will typically "fill out" refining capacity with sweet crudes. You don't make money running a 250,000 barrel/day refinery at 150,000 barrels/day, nor do you invest in sulfur removal equipment to handle 250,000 barrels/day.

[cu74]

Unless the Saudi fields have gone sour, they used to be the cheapest supply of sweet crude

True, with emphasis on "..used to be..", until the Saudis figured out Petro-Economics in the early seventies. Back in the sixties Arab Light cost about $4.00/barrel and gasoline was under thirty cents per gallon. But then ARAMCO "owned" the fields - they discovered the oil, built the production facilities and pipelines, and ran the operation - and paid the Saudis a very modest royalty. Now the Saudi Arabia Oil Company owns everything.

AFAIK, the big Saudi sweet fields have not gone sour, (they also have some fields that produce heavier crudes and also some that are sour). Saudi "Arab Light" is still one of the pricing benchmarks, but it is one of the higher-priced crudes. If you are in the transportation fuels business, you may be willing to pay the premium for Arab Light because it has a high percentage of gasoline/jet/diesel components and you also don't have to invest mega-bucks in sulfur removal equipment to refine it.

[MiddleAgedKen]

One of the specific issues driving the Peak Oil debate (I am not taking sides, lacking sufficient information or experience) is the fact that Saudi reserves are a state secret. There's been a great deal of talk that their reserves are overestimated.

Like I said, not taking sides.