Bloomberg Article: Listening to European Electricity Traders Is Very, Very Scary

[4WD]

Nope. You don't understand oil markets. Oil is a global commodity so the price paid is the global price not the domestic vs international price.

US oil production is still near all time highs. What has changed in the crack spread. The crack spread is the profit refineries earn when they refine oil into gas/diesel. It's ~3x higher than historical norms for Gas/Diesel. A lot of this fuel is being shipped to the EU.

Another thing is that oil drilling is capital intensive and domestic producers need higher prices to make it profitable.

The hydraulic stimulation phase (aka frack) is more expensive than the drilling phase …
Advantage ME where the completed wells don’t need stimulation …

 

[mk378]

The foreign market is driving the price. As long as refineries are able to maintain full capacity with exports, they have no reason to cut the price to domestic customers.

The oil industry doesn't want there to be too many refineries, either here or abroad. And they have been able to keep it that way.

 

[4WD]

ESG & climate activism is coming for us all. I don’t care what BMWTurboDzl thinks about “moving your investments elsewhere”, institutional investors and politicians getting fat at our expense have more weight in the market than all the rest of us combined. With governments picking winners and losers (read: subsidies & handouts) they will simply run the companies who don’t play ball right out of business. See: Covid lockdowns of all small biz, while Walmart & Amazon reap record profits.

The ONLY way to fight this is for people to wake TF up and stop purchasing by most convenient & start spending a majority of their money with LOCAL businesses. And even then it’s a losing battle. Hasn’t everyone played Monopoly?

I quit Amazon 5 years ago … it appears to have done little

 

[4WD]

The foreign market is driving the price. As long as refineries are able to maintain full capacity with exports, they have no reason to cut the price to domestic customers.

The oil industry doesn't want there to be too many refineries, either here or abroad. And they have been able to keep it that way.

Try to get a permit - I’ll wait …

 

[mk378]

Try to get a permit - I’ll wait …

If an oil company wants something from the government, they'll get it. They don't want excess refinery capacity. The price of gasoline has always been fixed at the refinery level. It is only recently become extravagantly obvious.

 

[OVERKILL]

This same sort of situation that happened in the 70's is what brought rise to the Messmer Plan in France, which decoupled them from the volatile fossil fuel market for electricity. Unfortunately, "Green" politicians, with heavy influence from their anti-nuke neighbour in Germany have been actively working to reduce the nuclear share of generation in France to below 50%, making them dependant on gas-backed VRE like Germany. This has resulted in a poorly maintained fleet, with considerable capacity offline for maintenance and refuelling outages this summer. The plan is of course to have that capacity back for the winter, but these outages could, and should, have been phased, to lessen the impact.

Macron has of course scuttled this arrangement and is taking EDF back to being completely public to build new nuclear, but this ship will take a long time to turn around and it is going to hurt while that happens.

 

[4WD]

This same sort of situation that happened in the 70's is what brought rise to the Messmer Plan in France, which decoupled them from the volatile fossil fuel market for electricity. Unfortunately, "Green" politicians, with heavy influence from their anti-nuke neighbour in Germany have been actively working to reduce the nuclear share of generation in France to below 50%, making them dependant on gas-backed VRE like Germany. This has resulted in a poorly maintained fleet, with considerable capacity offline for maintenance and refuelling outages this summer. The plan is of course to have that capacity back for the winter, but these outages could, and should, have been phased, to lessen the impact.

Macron has of course scuttled this arrangement and re-privatizing EDF to build new nuclear, but this ship will take a long time to turn around and it is going to hurt while that happens.

True - and I’m pro nuke but it’s also always one vote away as well … These countries need engineers in the middle of policy decisions - but they are happy enough to use Twitter for policy decisions …

BTW: We are nowhere near being able to fly most planes on alternatives either - but can’t even resolve more basic things …

 

[OVERKILL]

BTW: We are nowhere near being able to fly most planes on alternatives either - but can’t even resolve more basic things …

Yes, pipe dreams about any sort of long distance electric flight are just that. The "best" arrangement will be existing jet turbines run on synfuels, and that's going to be expensive. There are many challenges that people don't understand the scale or complexity of and just toss out nonsense like "we'll do it with batteries". No buddy, you won't.

 

[BMWTurboDzl]

Oil, even domestically produced is only a global commodity because that’s how it was made, and every country that tried selling their oil in currency other than US Dollar paid dearly for it.

There is absolutely no reason for us to be paying the global prices.

The only way to not pay the global prices is for a govt to subsidize the difference in price. This is what a lot of oil producing nations do but there's no such thing as a free lunch.

 

[4WD]

Yes, pipe dreams about any sort of long distance electric flight are just that. The "best" arrangement will be existing jet turbines run on synfuels, and that's going to be expensive. There are many challenges that people don't understand the scale or complexity of and just toss out nonsense like "we'll do it with batteries". No buddy, you won't.

True - and IMO fixed batteries are just a waste of limited resources - nuke for fixed power (augment heating with NG) …
EV’s need the resources …

 

[BMWTurboDzl]

The foreign market is driving the price. As long as refineries are able to maintain full capacity with exports, they have no reason to cut the price to domestic customers.

The oil industry doesn't want there to be too many refineries, either here or abroad. And they have been able to keep it that way.

First it was NIMBY for decades now it's the uncertain regulatory climate with regards to expected future demand of gas/diesel for transportation which is rapidly moving toward EV and hybrid. Supply shocks due to wars are something of a black swan event.

 

[Rmay635703]

Try to get a permit - I’ll wait …

A teen could make diesel or gasoline at home using a simple set of aluminum cake insulators, nicrome wire, 55 gallon metal drum and a propane tank with an air tight flange and hinge.

Heat plastic in the container and vent through a radiator or a column like a sill to condense the fuel.

For $0.99 a gallon at over 90% effiency you can convert #2,4,5,6 and specific #7 plastics into fuel, emits less pollution than a refinery and in Japan you could do it at home using a blest machine (small countertop appliance )

We have always had the proper solution to plastic waste and there is no reason environmental or otherwise not to.

I was going to build one using simple plans during my diesel days but sadly I wasn’t allowed to source bricks of waste #2 plastic

 

[4WD]

First it was NIMBY for decades now it's the uncertain regulatory climate with regards to expected future demand of gas/diesel for transportation which is rapidly moving toward EV and hybrid. Supply shocks due to wars are something of a black swan event.

Yep - a petrochemical plant is a safer bet for some right now …
(New XOM plant at Portland TX is natural gas based) …

 

[BMWTurboDzl]

Yep - a petrochemical plant is a safer bet for some right now …
(New XOM plant at Portland TX is natural gas based) …

I occasionally did some work at Dow in Freeport. I have no idea if it's still in operation today some 25 yrs later. Most of my short stint in petrochemical industry was spent in Pasadena/Texas City.

 

[4WD]

I occasionally did some work at Dow in Freeport. I have no idea if it's still in operation today some 25 yrs later. Most of my short stint in petrochemical industry was spent in Pasadena/Texas City.

My BiL was power plant manager there - and he kept it a profit center making more power than the plant consumed - except during turbine shut downs … (selling excess to the grid) …
I need to wander down to Surfside beach - have not been that way in a good while …
(I’m about 1.5 hours from there) …

 

[Dave Hess]

I occasionally did some work at Dow in Freeport. I have no idea if it's still in operation today some 25 yrs later. Most of my short stint in petrochemical industry was spent in Pasadena/Texas City.

Do you trade energy / oil stocks ?

 

[BMWTurboDzl]

Do you trade energy / oil stocks ?

Not individually. They may be present in various index/mutual funds.

 

[PandaBear]

It's scary...Here's Oz wholesale prices, $/MWh...$50 is 5c/Kwh, retail is 30c/Kwh, which is the maximum price that a new retail contract can be offered, but if you accepted a discount the retailer can charge more than that.
If you look up Australian energy market intrvention, you'll see the couple of weeks that the market operator took control of the grid, at sustained above retail wholesale prices.

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We have PG&E Smart Day plan for that. Basically 15 days a year they can go out of their regular "plan" rate and charge you "market" on those. They will give you 1 day heads up so you can make plans (not charging EV, leave the house instead of turning on AC, etc), for the time between 3pm to 9am.

It saves some money if you sign that up on average, but most people prefer the certainty.

 

[FZ1]

Coming to a neighborhood near you.

This^^^^^^^^^^^^^^^^^^^^^^^!

 

[OVERKILL]

We have PG&E Smart Day plan for that. Basically 15 days a year they can go out of their regular "plan" rate and charge you "market" on those. They will give you 1 day heads up so you can make plans (not charging EV, leave the house instead of turning on AC, etc), for the time between 3pm to 9am.

It saves some money if you sign that up on average, but most people prefer the certainty.

Wow, that's nuts. I can sign up for a fixed-rate at $0.12/kWh if I want and consume with impunity.