Many people understand the differance between crude prices and Gas prices depends on a countries ability to "refine" the oil into Gas.
In 1982 we had the ability to Refine 18.62 Million barrels per day, today we can refine 16.76 Million barrels per day.
http://www.eia.doe.gov/emeu/aer/txt/ptb1109.html
In 1981 we had 324 refineries today we have 149.
"While many refineries have closed, and no new refineries have been built in nearly 30 years",
In the last year recorded this country LOST capacity to refine OIL. thus the cost of that lost production will be felt directly at the PUMP.
But we are consuming "The United States consumed an average of about 20.4 million bbl/d of oil"
Up from "up from 20.0 million bbl/d in 2003"
So let me see if we can refine 16.76, and we USE 20.4
we MUST some how Refine 3.64 MILLION BARRELS PER DAY OUT of THIN AIR!!!!! :!:
THUS GAS PRICES AT PUMP HIGHER!!!!!!! :!:
Simplest case of Supply and Demand I ever saw.
By the way that extra cost of our not having the refinery capacity is 1.3 billion, per day!
Now WHY haven't we built a single refinery in 30 years.
"The Mandan, Hidatsa, Arikara (MHA) Nation of American Indians just announced that they propose to build the first U.S. grass-roots crude oil refinery since decontrol of oil prices over 20 years ago."
But wait, cause before the ink is dry the LAWsuits are started.
"A new U.S. oil refinery, the first in decades, is being proposed in North Dakota. Local Native Americans are fighting back"
http://www.refineryreform.org/
" No new refineries have been built in the US in the past 25 years. And petroleum industry experts say anyone would have to be crazy to launch such an effort -- even though present refineries are running at nearly 100 % of capacity and local gasoline shortages are beginning to crop up.
Why does the industry appear to have built its last refinery?
Three reasons: Refineries are not particularly profitable, environmentalists fight planning and construction every step of the way and government red-tape makes the task all but impossible. The last refinery built in the US was in Garyville, Louisiana, and it started up in 1976.
Energy proposed building a refinery near Portsmouth, Virginia, in the late 1970s, environmental groups and local residents fought the plan -- and it took almost nine years of battles in court and before federal and state regulators before the company cancelled the project in 1984.
Industry officials estimate the cost of building a new refinery at between $ 2 bn and $ 4 bn -- at a time the industry must devote close to $ 20 bn over the next decade to reducing the sulphur content in gasoline and other fuels -- and approval could mean having to collect up to 800 different permits. As if those hurdles weren't enough, the industry's long-term rate of return on capital is just 5 % -- less than could be realized by simply buying US Treasury bonds.
"I'm sure that at some point in the last 20 years someone has considered building a new refinery," says James Halloran, an energy analyst with National City Corp. "But they quickly came to their senses," he adds. "