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Get ready for much higher diesel costs!

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Mike

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While talking to my neighbor, the Texaco fuel supplier here in Montgomery, I was astonished by his research and prediction that diesel fuel will be over $4.00 per gallon by the end of next year.

The EPA mandate of "Low Sulfur" fuel kicks in on June 1, 2006 with 5 southeastern refineries closing the doors due to the $1 BILLION costs associated with upgrading each of their facilities.

The price hike will make Bio-Diesel as affordable as the mineral based oils in use now. He also pointed out that the large "Oil Conglomerates" are transitioning towards the "Bio-Diesels" in the USA so as not to be left out in the cold. He claims that Exxon has already bought 50,000 acres of prime cropland in Iowa for their future endeavors. More corporate welfare???

It also made me uneasy to know that Venezuala owns "Citgo". Could anyone confirm this?

$4.00 per gallon diesel will not be pretty on our economy.
 
I don't believe it will happen.

The spurt in gas and diesel prices this year was primarily caused by the hurricane damage to production and refining facilities by hurricanes Rita and Katrina. Most of this has been repaired.

It costs more to take the last bit of sulfur out of fuel, but $1 billion is not a big number in the oil business.

If the price of fuel gets too high, the sulfur requirements will be relaxed or deferred due to the potential damage to the economy. It is an election year as well.

Don't forget that the ban on using high sulfur farm fuel in highway vehicles was suspended in many states after Katrina. Didn't get much publicity.

If you really think diesel is going to $4.00, you can certainly make money in the futures market!!!!
 
What are you guys paying for farm diesel there right now? We got the tank filled in the yard the other day and it works out to about $3.60 for a US gallon. Maybe we are already paying more than you. So I sure think it could hit $4 a gallon. Its just crazy~ :roll:
 
Manitoba_Rancher said:
What are you guys paying for farm diesel there right now? We got the tank filled in the yard the other day and it works out to about $3.60 for a US gallon. Maybe we are already paying more than you. So I sure think it could hit $4 a gallon. Its just crazy~ :roll:
Click to expand...

It is even crazier when you realize that gasoline actually costs more to crack out than diesel. It just so happens that gas price is a political issue and on the news.

I know some of Exxon's upper execs. If I get motivated enough to call them I might come up with an answer. Might have to do with the refineries.

I heard on the radio how much natural gas it takes to make oil out of those tar sands. It makes tar sand oil not look that appealing.

I am a little worried that the last bit of legislation for the oil industry on refining capacity will do nothing for increased supplies.

We need a real energy policy in the U.S. Just who is on those committees in the U.S. Congress?
 
Econ101 said:
Manitoba_Rancher said:
What are you guys paying for farm diesel there right now? We got the tank filled in the yard the other day and it works out to about $3.60 for a US gallon. Maybe we are already paying more than you. So I sure think it could hit $4 a gallon. Its just crazy~ :roll:
Click to expand...

It is even crazier when you realize that gasoline actually costs more to crack out than diesel. It just so happens that gas price is a political issue and on the news.

I know some of Exxon's upper execs. If I get motivated enough to call them I might come up with an answer. Might have to do with the refineries.

I heard on the radio how much natural gas it takes to make oil out of those tar sands. It makes tar sand oil not look that appealing.

I am a little worried that the last bit of legislation for the oil industry on refining capacity will do nothing for increased supplies.

We need a real energy policy in the U.S. Just who is on those committees in the U.S. Congress?
Click to expand...

We have an energy policy they have it we want it.
 
Diesel goes to $4 ,and IM done that would be all it would take to park my tractors,got some old folks that I farm for now that I break even on,I would rather quit than past the costs on to them..................good luck
 
I asked my bulk dealer about the $4 US prediction and said it seems high.

He said the refinery in Calgary has to spend $4 Billion to upgrade for the no sulphur in diesel, so shutting 4 refineries on the gulf coast seems a bit harsh at $1 Billion each.

The point we don't know is how much capacity are those billions of dollars spread over.

Right now farm diesel is about 75 cents a litre.

3.78 litres per US gallon.

Cdn dollar about .85 US

That works out to $2.41/US gal. US funds
 
Econ101


It is even crazier when you realize that gasoline actually costs more to crack out than diesel. It just so happens that gas price is a political issue and on the news.

I know some of Exxon's upper execs. If I get motivated enough to call them I might come up with an answer. Might have to do with the refineries.

I heard on the radio how much natural gas it takes to make oil out of those tar sands. It makes tar sand oil not look that appealing.

Cowpuncher


We don't sell our cattle based on cost, why should anyone else. You charge as much as the market will bear. [/quote]
 
Sounds like there are lots of things happening on various fronts in the energy crisis area. This morning I heard Byron Dorgan, D, ND say that they are making a form of some type of gas from coal that is being shipped to Canada and pumped down slow producing oil wells to bring those wells into much better production. They were talking some new refining capacity and such. But, I don't believe they touched on the ridiculously high number of types of gasoline required by different cities and states, apparently to satisfy local environmental rules, and the fact that the stuff can't even be hauled in the same tanks, which costs a great deal in efficiency. Talk also of longer range plan to pipe natural gas from ALaska, but will take a few years. Maybe getting more people seriously involved in doing something will have positive results. With all the finger pointing and shouting of blame, it surely should increase the feasibility of more "wind" power!!!

MRJ
 
There are 2 new bio diesel plants that are going to be up an d running in this area next year. They are going to use Canola that is locally grown and we will have first chance to buy the bio fuel. I ve heard it doesnt really work that well when the temps drop. Anyone else heard this?
 
MRJ said:
Sounds like there are lots of things happening on various fronts in the energy crisis area. This morning I heard Byron Dorgan, D, ND say that they are making a form of some type of gas from coal that is being shipped to Canada and pumped down slow producing oil wells to bring those wells into much better production. They were talking some new refining capacity and such. But, I don't believe they touched on the ridiculously high number of types of gasoline required by different cities and states, apparently to satisfy local environmental rules, and the fact that the stuff can't even be hauled in the same tanks, which costs a great deal in efficiency. Talk also of longer range plan to pipe natural gas from ALaska, but will take a few years. Maybe getting more people seriously involved in doing something will have positive results. With all the finger pointing and shouting of blame, it surely should increase the feasibility of more "wind" power!!!

MRJ
Click to expand...

What he was talking about is reinjecting the water from coal bed methane wells back into older oil wells to pressure them up to get more of the oil out that would otherwise be unrecoverable. The water is a by product of CBM(coal bed methane) wells and either has to be reinjected, evaporated, or treated and released to be disposed of. CBM wells are baisically shallow natural gas wells. Normally coal zones in these wells are flooded with water. The water has to be pumped off to allow the gas to flow out. The water ranges in quallity from pretty nasty to better than some peoples private water wells.
 
Here is a deal for someone who is really serious about fighting the high price of fuel. An ad in the Tri-State News gives this opportunity. The gentleman that submitted the ad has a pair of middle-aged 1300-1400 pound mules and a two-bale hauler with motor driven hydraulics. He is willing to let someone use the mules and the bale hauler all winter for free, just to have his mules worked. Think about it, you could get your cattle fed this winter pretty cheap. All you would be out would be hay for the mules and a miniscule amount of gasoline to run the 8 h.p. motor on the bale hauler. Go for it. :wink:
 
Manitoba_Rancher said:
There are 2 new bio diesel plants that are going to be up an d running in this area next year. They are going to use Canola that is locally grown and we will have first chance to buy the bio fuel. I ve heard it doesnt really work that well when the temps drop. Anyone else heard this?
Click to expand...

I asked the fellers who worked at Cummins who were putting a new transfer pump on my pickup, what they thought about the new bio diesel, and they didn't think that they had heard much good. Thought Cummins might not honor the warranty if anything went wrong, but I don't see how they could tell it was used unless there was some in the fuel tank when it was taken to the shop. I would like to know more about it. The bio diesel that is. Anybody tried it?
 
Soapweed said:
Here is a deal for someone who is really serious about fighting the high price of fuel. An ad in the Tri-State News gives this opportunity. The gentleman that submitted the ad has a pair of middle-aged 1300-1400 pound mules and a two-bale hauler with motor driven hydraulics. He is willing to let someone use the mules and the bale hauler all winter for free, just to have his mules worked. Think about it, you could get your cattle fed this winter pretty cheap. All you would be out would be hay for the mules and a miniscule amount of gasoline to run the 8 h.p. motor on the bale hauler. Go for it. :wink:
Click to expand...

I have a neighbor that did that one winter. He had a small battery operated winch on the flatdeack to get a round bale on with. By the end of the winter the deck was broke from the rounds.

The only trouble with them mules is the exhaust system outlets right in front of the driver, and the heater is always broke :wink:
 
This is a good place to start.
http://www.biodiesel.org/resources/fuelfactsheets/
Look under myths and facts. (I have no personal experience with biodiesel)
 
quote]

The only trouble with them mules is the exhaust system outlets right in front of the driver, and the heater is always broke :wink:[/quote]

I wouldn't say that was the ONLY problem with any team of mules! :shock:

:lol: :lol: :lol: :lol: :lol:

Had a friend who did this very same deal (probably with the same guy) several years back, when his team of horses was getting a little old. He fed with them all winter, but said he sure as hell would never use ANY mules again! :lol:
 
Jinglebob said:
Manitoba_Rancher said:
There are 2 new bio diesel plants that are going to be up an d running in this area next year. They are going to use Canola that is locally grown and we will have first chance to buy the bio fuel. I ve heard it doesnt really work that well when the temps drop. Anyone else heard this?
Click to expand...

I asked the fellers who worked at Cummins who were putting a new transfer pump on my pickup, what they thought about the new bio diesel, and they didn't think that they had heard much good. Thought Cummins might not honor the warranty if anything went wrong, but I don't see how they could tell it was used unless there was some in the fuel tank when it was taken to the shop. I would like to know more about it. The bio diesel that is. Anybody tried it?
Click to expand...

Unless it is specifically stated otherwise in your owners manual the use of Biodiesel will NOT void your warranty.

Biodiesel is highly detergent, as such it provides an enema to the fuel system which can clog the fuel filter quite rapidly until the fuel system is clean. That process is generally cleared up with one or two filter changes at most.

I use Bio-diesel occasional and other than the aforementioned problem my experience has been good. I have noticed no change in engine performace or fuel mileage. Have a cool one.
 

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