Correction for Gulf coast oil exported piece

For the original article and its correction, click here.

10 Responses to Correction for Gulf coast oil exported piece

  1. Frankie Valejo says:

    Yes oil is a fungible product. One of the very largest refineries on the planet is in St Croix. It was built by Amerada Hess. 500,000 BPD. Oil going there is called exported. Refined product in the states from there is called imported.

    [JR: Indeed. Quite a shell game where Americans bear the risk of the spill, but much of the profits ends up elsewhere.]

  2. Daniel Ives says:

    So does this mean that politicians who support more offshore oil drilling are completely unaware of the fact that only around half of the oil produced there is consumed domestically? Or does it mean they are fully aware of that fact and don’t really give a damn about energy security and reducing imports of Middle East oil but instead just follow any policy that helps oil companies make money?

  3. Leif says:

    If memory serves me correct, I recall a short time ago reading that EXXON paid zero US taxes on ~$45 billion profits. By extension I would assume that the other oil companies had similar performance.

    So Tea-Baggers, how is that tax revolt working out for you? As a tax payer myself it looks to me like I might be getting the slippery, smelly end of the stick.

    Not being a tax lawyer, I can only speculate that there are tax incentives for exporting oil thus increasing the “export” data while buying foreign oil perhaps at a lower price or lower grade to be processed here to improve profit margins. Perhaps access tax subsidies?

    A supper tanker travels ~33 feet on a gallon of fuel so moving that oil to and fro is not done for chuckles.

  4. Mike says:

    The “oil” we export is not in the form crude, but rather is composed of diesel and other heavy fractional petroleum distillates. When crude is refined into its final products, the ratio of what is produced out is fixed (for the most part). A barrel of oil is 42 gallons, out of which refiners can squeeze about 20 gallons of gasoline and about 10 gallons of diesel. Refiners have become pretty good at modifying their process to maximize the most marketable products, but the chemistry and thermodynamics of refining do have limits as to how much they can maximize the more profitable distillates. And since we use far more gasoline than diesel, refiners are always left with excess diesel.

    Weiss’s data that he used for his “analysis” (if that’s what you’d call it) states quite clearly: Total Crude Oil and Petroleum Products. Had Weiss bothered to look more closely at this or the footnotes in his link, he would have realized this:

    Even more digging (once again, hard work for an “expert”) he would have seen that what little raw crude oil the US exports goes exclusively to Canada. To further put this into perspective, in 2009 we exported a whopping 15.9 million barrels to Canada, or 0.82% of total US domestic oil production.

    This leaves us with three possible conclusion: Weiss isn’t the expert he claims to be because he dint know how to look deeper into the numbers or he deliberately mislead to make his case against additional oil production.

  5. william green says:

    Mike (#6) is right — the U.S. exports virtually no crude oil.

    The U.S. does export some petroleum products, which the numbers in the post are picking up. The two biggest porudct exports are petroleum coke and residual fuel oil, which reflect the “bottom of the barrel” (dirty stuff) produced in the refining process that don’t have a market here — does Weiss really want us to use more of this domestically? We also export excess conventional gasoline, that also doesn’t have a market in the U.S. given the strict reformulation standards that apply in many parts of the country. Finally it should also be noted that our “clean” product imports exceed our TOTAL product exports, so the U.S. is a net importer of products as well as crude oil. Exporting what we don’t use because it is too dirty seems like something the environmental community should support.

    Bottom line: the “analysis” in the original post is both ridiculous and misleading.

  6. Stephen Watson says:

    “Does it make sense for the United States to bear the health, economic, and environmental costs of this offshore production for oil that is shipped elsewhere?”

    If it makes more profit for someone to sell it abroad than to sell it in the USA, then of course it makes sense! Right? Those companies have a duty to their shareholders to maximise their dividends and that’s the way they do it.

    As John Maynard Keynes said: “Capitalism is the extraordinary belief that the nastiest men, for the nastiest of motives, will somehow work for the benefit of all.”

  7. Pat Moffitt says:

    Also “missing” from the analysis are the collection of lease fees, employment, state and federal taxes. Paying no federal taxes (the accuracy of which I have not checked) is not the same thing as not generating massive amounts of tax revenues from economic activity- including employment.

    According to DOE – When the consumer pays $2.34/gallon for regular gasoline:
    $0.42 goes to State and Federal taxes (so who is the greedy one here?)
    $0.26 goes to the refiners to cover all costs and profit
    $0.23 goes to distribution and marketing
    $1.43 goes to pay the cost of the crude oil

    Offshore drilling produces some 1.5 million barrels of oil per day or about 100 million dollars per day and this doesn’t include the value of the natural gas. (When we drill less there is less supply and the price of crude oil rises and the money goes to many places that are not in our best interest) Leases for drilling generally average about $800 million to a billion a year to the government. The potential offshore reserves may be 40 billion barrels. ($50 to 150 per barrel). If the State and Federal governments can say we don’t need the money — then shut it all down. Until then- tell me how we pay off the debt- how do we pay Fed and State retirement accounts, social security, health care?

    And to Stephen Watson- no capitalist country has produced a Mao, Stalin, Pol Pot or a Hitler. People try to sneak into capitalist countries and sneak out of socialist countries- should be all we need to know. In capitalist countries the government is supposed to watch the private sector but in a socialist country- there is no-one to watch the watchers.

  8. Leif says:

    Also missing from your analysis Pat Moffitt, #7 is what we are doing to the life support systems of earth with our current life choices.

    I offer up this 18 minute video to give you a sense of scale and timing. This was posted by another commentator on CP but I have lost the thread, but thank you.

    I challenge you to watch and then tell me if money is the only bench mark, or even the primary bench mark.

  9. Stephen Watson says:

    Pat, I think you should go and reread your history books – not that any of the talk of Stalin or Mao was germane to my point about the statutory profit maximisation requirements of public corporations.

    You seem to be implying that because people “try to sneak into capitalist countries” there is little need to assess, critique or analyse what goes on inside those countries. And one could perhaps conclude that if indeed “In capitalist countries the government is supposed to watch the private sector …” then this oil disaster shows that it’s not watching very closely. As JR’s guest poster Dr Beamish suggested on the 6th: “Another reason [for safety lapses] is the voluntary, “trust us,” self-regulatory regime that BP and Big Oil demanded and received under the Cheney-Bush administration”.

  10. Pat Moffitt says:

    Stephen- It was not Bush Cheney that signed the drilling permit and the exclusion of the EIS requirement! The permit was signed by this administration that was well compensated by BP campaign contributions. MMS has been a disaster for years– and government has done little to clean up its own mess. I think we need to understand why this happened and how we can reduce future risks. There is plenty of blame to go around. However, as we have seen with the financial collapse of a few years ago– government never quite gets around to investigating its own failures. MMS, Fannie and Freddies get a free pass.