Liberty is an inherently offensive lifestyle. Living in a free society guarantees that each one of us will see our most cherished principles and beliefs questioned and in some cases mocked. That psychic discomfort is the price we pay for basic civic peace. It's worth it. It's a pragmatic principle. Defend everyone else's rights, because if you don't there is no one to defend yours. -- MaxedOutMama

I don't just want gun rights... I want individual liberty, a culture of self-reliance....I want the whole bloody thing. -- Kim du Toit

The most glaring example of the cognitive dissonance on the left is the concept that human beings are inherently good, yet at the same time cannot be trusted with any kind of weapon, unless the magic fairy dust of government authority gets sprinkled upon them.-- Moshe Ben-David

The cult of the left believes that it is engaged in a great apocalyptic battle with corporations and industrialists for the ownership of the unthinking masses. Its acolytes see themselves as the individuals who have been "liberated" to think for themselves. They make choices. You however are just a member of the unthinking masses. You are not really a person, but only respond to the agendas of your corporate overlords. If you eat too much, it's because corporations make you eat. If you kill, it's because corporations encourage you to buy guns. You are not an individual. You are a social problem. -- Sultan Knish

All politics in this country now is just dress rehearsal for civil war. -- Billy Beck

Sunday, June 22, 2008

More Unintended Consequences

More Unintended Consequences

Or were they really unintended?

Do you own a turbo-diesel pickup truck? Buy it on the understanding that you could get good performance and fairly decent mileage, and your fuel would cost less than gasoline? Do you own a diesel car for the same reasons?

Are you now pissed off that diesel costs more, significantly more, than gasoline? Have you been blaming it on Congress for passing "low sulfur" restrictions? Do you believe that it costs more at the pump because it costs more to refine?

You'd be wrong.
One reason why diesel fuel today is higher priced than gasoline is because of the unintended consequences of the 2007 EPA mandated ULSD (Ultra Low Sulfur Diesel) fuel - and not necessarily because it costs more to produce...

Everything changed in October of 2006, when the new U.S. ULSD regulations were implemented. Current U.S. ULSD is regulated to contain no more than 15-parts per million sulfur. In actual practice, U.S. ULSD contains just 7 or 8-ppm, which perhaps not coincidentally allows our ULSD to meet the somewhat stricter 10-ppm sulfur regulations in Europe. So, ULSD produced here in the United States has, for the first time, become acceptable for use in Europe. According to a 2/08 article in Reuters entitled "ANALYSIS-Exports keep U.S. diesel prices above gasoline", they reported that U.S. diesel fuel is currently being exported in quantity. The economics of "Supply & Demand" no longer apply to the U.S. diesel fuel market. American truckers could boycott diesel fuel, and it wouldn't necessarily produce lower diesel fuel prices.

According to a June 2008 article at MSN, entitled: Why is the U.S. exporting gasoline and diesel?, they report that U.S. oil companies were exporting more than 1.8 million barrels of crude oil, gasoline, diesel, jet fuel and other refined products per day. The top five buyers of U.S. petroleum products were Mexico, Canada, the Netherlands, Chile and Singapore. This article also indicated that Venezuela owns three CITGO refineries in the United States, and that about 30,000 barrels of refined products per day are being shipped back to Venezuela, where government-subsidized gas/diesel is currently being sold for a whopping $0.19 per gallon. If we weren't exporting diesel fuel, there would be more of a surplus, which could result in parity between gas and diesel fuel prices. What can we do? What should we do?
Hey, Maxine Waters and Maurice Hinchey, how about we "socialize" CITGO's refineries? I'm sure your good buddy Hugo Chavez wouldn't mind a bit!

In associated news, the same article reports:
Surprisingly, most of the world's "unconventional" sources of oil exist right here in the United States. These unconventional sources include the vast oil shale deposits called the Green River Formation, which are found spanning an ancient 17,000 square mile lake bed beneath Colorado, Utah and Wyoming (80% on federal lands). Oil shale can produce anywhere from 22-40 gallons of oil per ton of oil shale. A barrel of crude oil contains 42 gallons. Based on current extraction technology, at least 100 billion barrels of "commercially viable" crude oil is thought to exist in Green River Formation. (Note: the total amount of all oil shale within the U.S. is thought to contain a staggering 1.4 trillion barrels of crude oil, which is more than four times the estimated historic levels of oil found beneath Saudi Arabia.) With a current U.S. consumption rate of 20 million barrels per day, 100 billion barrels of crude oil derived from oil shale could meet all of the U.S. oil consumption needs for another 14 years - all by itself. See: to learn more.

Shell scientists have created the technology required to economically extract large amounts of crude oil from oil shale without wrecking the environment. In fact, Shell's method is capable of extracting high quality light crude oil from oil shale deposits utilizing heated wells - not a rock mill operation, which does little damage to the environment. According to a November 2007 article in CNN Fortune - online magazine, a Department of Energy study was referenced that indicates the Green River deposits are predicted to produce 2 million barrels of oil per day by 2020 and as many as 5 million barrels per day by 2040 - assuming of course, that the environmental lobby and Washington could be convinced that the future of the U.S. depends on us becoming energy independent. Indeed, this level of production would rival that of the largest conventional oilfields in the world. 2007 estimates for cost per barrel came in at a low of $30/barrel, while cost estimates for a broader range of oil shale deposits range from a low $30 to as high as $90 per barrel. Shell's production methods are expected to yield more than one million barrels of oil per acre. Keep in mind that the Green River Formation encompasses 17,000 square miles.
I was certain I'd referenced Shell's extraction technology, called the "in situ conversion process" here before, but damn if I can find the piece now.

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