Biodiesel Prices and Expected Retail Markups - Page 6 - PeachParts Mercedes-Benz Forum

aklim · #76 01-04-2007, 03:31 PM

Quote:

Originally Posted by retx

its funny you say these two things in the same forum. im not being mean, but do you have any idea how or why those "dry" wells from the 60's and 70's are pumping again? what about how much they are producing? well i do. it just so happens to be the work that my girlfriend is doing now. its called co2 flooding and water injection. take an old well. remove the rig, fill it with co2 or water, concrete cap it and sit on it for a few years. the injection helps the oil loosen up from the rock, sand or shale that made it nearly impossible to extract. those wells went "dry" because they were too expensive to run for the amount of energy they produced. and thats what we are seeing today. wells that are just 10 years old becoming to expensive to operate. again....one day it will not be cost effective to explore, drill, pump, ship and refine oil. those wells didnt magically start filling up again. it has taken new techniques to gain access to that oil deep within the earth. and its a very expensive one. we are seeing the price increase from such procedures. only 2 companies are doing this. one in texas, and one based in norway.

and its odd you think that no company would want to purchase something and sit on it for any length of time before selling it. thats exactly what these companies are doing. it takes years for these "dry" wells to start pumping again. and at very little per day output too. its a game of who has the last bit of oil. if you believe there is no shortage of oil, then why would a company spend millions of dollars on the research and development of such technology, just to obtain a very minute amount of oil when they could spend a lot less and get it elsewhere. and why is offshore drilling, which happens to be THE most expensive, becoming the status quo? because we are running out of oil, both domestic and globally. sorry to sound like the boy who cried wolf...but.

Bottom line is that it was too expensive yesterday. However with today's technology, price and what not, it is economical again, right? That was the point I was making. Further to that, it is taking new and expensive techniques in TODAY's light. In YESTERDAY's light it was unprofitable and even unfeasible. Oil is there. It is just hard to get to with TODAY's technology, is my point. I priceda digital watch with time, month and date when they first came out. They were way too expensive foir me to own AT THAT TIME. Today we are buying them for $10 or less at Wal*Mart and they can do more.

I am not saying that NO company would. However it takes a certain type of comapany to do it. For the major oil companies, it is an investment. How much does a "dry" well go for? Probably not as much as a producing one, just based on a guess. They have enough capital and can write off things like these so it makes it worthwhile to buy and keep. However, for smaller shops, it would be harder to get them to tie up a bunch of money to do that. Exxon Mobil can invest in more things than we can. Let me ask you this, would you buy a product that you can sell one of every month and tie up inventory or would you rather buy a product you can sell 5 of every day? I don't KNOW if there is a shortage of oil. I read an article that mentioned that even BEFORE the first well was sunk, it was predicted to run out after X years. At the rate we use it, will it run out? Yes. When? Who knows? I don't. So far I have seen a lot of SWAGs. Yes, these companies are hedging their bets but it is feasible for them. Smaller companies may not be able to because of the capital.

retx · #77 01-04-2007, 03:44 PM

Aklim, I completely understand what you are saying, but i think we are on two different trains of thought about it. It is important to know and understand that the technology and equipment will one day be too expensive to obtain. Why? Because energy will cost too much to make it so. The very same petroleum we are using in our cars is also refined for use to create the electricity that we use to create, build and use that equipment. Oil is there and yes it is expensive to get, and in coming decades it will still be there but may be TOO expensive to get out. Too expensive for companies to turn a profit.
Which is why i answer your question with this...I would purchase a product that I could sell one of every month, if it is more valuable and profitable than one I could sell 5 of every day. Which is what at least this one oil company is doing, knowing that when those wells start pumping again, that oil is gonna be profitable. Otherwise they wouldnt be doing it.

aklim · #78 01-04-2007, 03:51 PM

Quote:

Originally Posted by retx

Aklim, I completely understand what you are saying, but i think we are on two different trains of thought about it. It is important to know and understand that the technology and equipment will one day be too expensive to obtain. Why? Because energy will cost too much to make it so. The very same petroleum we are using in our cars is also refined for use to create the electricity that we use to create, build and use that equipment. Oil is there and yes it is expensive to get, and in coming decades it will still be there but may be TOO expensive to get out. Too expensive for companies to turn a profit.
Which is why i answer your question with this...I would purchase a product that I could sell one of every month, if it is more valuable and profitable than one I could sell 5 of every day. Which is what at least this one oil company is doing, knowing that when those wells start pumping again, that oil is gonna be profitable. Otherwise they wouldnt be doing it.

Yes, but the question is "WHEN", isn't it? I can see what the major oil companies are doing and I agree it is a good stragtegy. The company you are talking about can wait it out. Yes, it is about the bottom line so while today, those wells sit untouched, tomorrow, when the price is right, they will pump again. However, the question is whether you can ride it out till that day. If you can, more power to you. Can the average pump station owner do that? Maybe, maybe not. They can sit on Biodiesel and try wait till it gets really profitable but if they can tough it out, they are golden. If not, they are broke. Large companies can afford to run for a few years with oil wells that are not producing. I am not sure a retailer can do that. If they could, it would be great tho.

retx · #79 01-04-2007, 04:07 PM

well its absolutely impossible to say when we will run out. with sketchy reporting of actual amounts in reserves from nearly every holding company, its pretty unlikely we will ever know how much is actually usuable. its not so much a matter of when we will as it is that we WILL run out. those who are running wvo will be able to ride it out longer than the rest of us. which is why we need more biodiesel pumps around the country. and one's that arent necessarily marking it up so much that people get disenchanted and stop buying it.

aklim · #80 01-04-2007, 04:19 PM

Quote:

Originally Posted by retx

well its absolutely impossible to say when we will run out. with sketchy reporting of actual amounts in reserves from nearly every holding company, its pretty unlikely we will ever know how much is actually usuable. its not so much a matter of when we will as it is that we WILL run out.

which is why we need more biodiesel pumps around the country. and one's that arent necessarily marking it up so much that people get disenchanted and stop buying it.

Agreed. However, when you cannot peg a date to it reliably, it becomes a harder sell. We all know it will run out. However, when you have reports that say 10 years and 30 has passed and now you have more and more saying this, that or the other, it becomes hard to believe which one is the right one. Hence, it is still the little boy crying wolf.

The problem is that they are not forced to compete, really. Look at Prairiefire Biofuels in Madison. During thye summer, I would have to pay $150 a year for the privilege of buying B100 at a price of over $0.55 a gal more than D2. As a non member, I would have to pay over $0.75 a gal. Look at their prices today. I can get D2 for $2.59. Why would I pay $150 for the privilege of buying it for $2.77? Why would I, as a non member want to buy it for $3.12? How are they in business? Well, there are enough nuts that will pay for it. Like you said, you'd take a slow selling but more profitable product over a faster selling product. Some will and some won't. They will and did. As long as there are nuts out there that will pay thru the nose, they will sell it at those prices. I would. As they say, a fool and his money are soon parted. They claim to want to promote B100. At the rate they are going, all that will buy it are the nuts that are already convinced and not Joe Public

Shorebilly · #81 01-04-2007, 06:50 PM

Quote:

Originally Posted by retx

i agree. i dont think they have ruined the scenery there in tucker county. maybe its because i know how good they are for us in the long run. i see them as beacons maybe? i dont know. probably the same people who didnt want hwy33 to continue on into canaan valley because it would disrupt the valley, are the same people who didnt want the windmills. and the same types that didnt want them in massachusetts. its funny, parsons, wv didnt think twice when a natural gas company wanted to come into the area (downtown at that) and crack for some gas. poor little town saw the measly $10,000 check and gave it two thumbs up. cant wait to go back for christmas and see an ugly well, mud pit, and dirty truck tracks all over town. i guess its, true, he who has the money, has the say.

They are drillin' all over the place for Natural Gas......I was just considering complaining to the Sheriff....to see if he would enforce the law and make the Gas Company (Dominion Resources) clean up the roadway....like they are supposed to.....

Oh, and to those of y'all who are unfamiliar with West Virginia.....the natural resources of this state were stolen quite some time back.....we even have a carpetbagger Senator named Rockefeller .....anybody remember who owned the original Standard Oil Co.??

SB

retx · #82 01-04-2007, 07:17 PM

Quote:

Originally Posted by Shorebilly

Oh, and to those of y'all who are unfamiliar with West Virginia.....the natural resources of this state were stolen quite some time back.....

not true Shorebilly, WV still has the second most beautiful mountains in the US. Now thats a real resource.

patbob · #83 01-04-2007, 09:01 PM

Quote:

Originally Posted by retx

.. we have an infrastucture in place for a depleting resource. its going to be a long and expensive road, but we have to work on replacing/augmenting that infrastructure before we can claim energy independence.

I agree. Which is one of the reasons I'm willing to support bioD even at the extra ~$1/gal it costs me. First off, I don't drive enough miles per week for it to cost me more than lunch for that same week. Second, the existing distribution system could easily switch to supplying bioD, either pure or as a mixture. A much better short term option than liquid Hydrogen in my opinion. Buying it overpriced helps convince them to keep the pump there and going, which is the first step in solving the chicken-and-egg problem alternative energy has (it has others, but that's one of them).

Quote:

Originally Posted by Shorebilly

I am willing to bet that you will find all sorts of exclusionary clauses in the majority of retail fuel stations fuel contracts, that prevent them from selling any fuel type product other than what is supplied by the distributor.....or on basic terms....if they sell you bio-fuel, it is as if it were a competitor's product...and will cause the station to lose it's secured fuel supply....thus effectively taking that station out of the business....

In my opinion there will not be any bio-fuel sold to the general public from main stream retail fuel locations......until the major oil companies begin to sell the stuff.....and it is not in their interest to do so....

I buy my commercially produced bioD from this retail location:
http://www.sqbiofuels.com/p_portland-linnton.htm

It's a Shell station with a biodiesel pump off to the side. I don't know why they can sell bioD and Shell-branded fuels from the same piece of property, but they can. If they can, and are not violating contracts to do so, then others could too -- its all about the profit at that point.

Most business owners weight profit very heavily. They won't start pumping bioD until they have to. The government can mandate that they must, or customers can make it worth their while. I prefer to see the customer carrot rather than the government pointy stick at work here.

If everybody who owned a diesel spent just an extra $5/week by buying some of their D as bioD, the pull would be tremendous. I think it would even be enough to convince more stations to take the trouble to carry the stuff.

retx · #84 01-04-2007, 09:30 PM

In Durham, NC, on Roxboro Rd. is the only B20 pump i know of in the area, although Im told there are a few more. Its at a BP station. Its been there for 4 years. Im confused as to why people think that these distributor ran stations can not sell a product that is no more different than offering Coke and Pepsi in the same store.

aklim · #85 01-04-2007, 10:29 PM

Quote:

Originally Posted by patbob

I agree. Which is one of the reasons I'm willing to support bioD even at the extra ~$1/gal it costs me. First off, I don't drive enough miles per week for it to cost me more than lunch for that same week. Second, the existing distribution system could easily switch to supplying bioD, either pure or as a mixture. A much better short term option than liquid Hydrogen in my opinion. Buying it overpriced helps convince them to keep the pump there and going, which is the first step in solving the chicken-and-egg problem alternative energy has (it has others, but that's one of them).

I buy my commercially produced bioD from this retail location:
http://www.sqbiofuels.com/p_portland-linnton.htm

It's a Shell station with a biodiesel pump off to the side. I don't know why they can sell bioD and Shell-branded fuels from the same piece of property, but they can. If they can, and are not violating contracts to do so, then others could too -- its all about the profit at that point.

Most business owners weight profit very heavily. They won't start pumping bioD until they have to. The government can mandate that they must, or customers can make it worth their while. I prefer to see the customer carrot rather than the government pointy stick at work here.

If everybody who owned a diesel spent just an extra $5/week by buying some of their D as bioD, the pull would be tremendous. I think it would even be enough to convince more stations to take the trouble to carry the stuff.

Buyint it overpriced also tells them that they can stick you for what they want and you will pay for it. Why should we do that? So they get to stick us more?

Shorebilly · #86 01-05-2007, 08:01 AM

Quote:

Originally Posted by retx

not true Shorebilly, WV still has the second most beautiful mountains in the US. Now thats a real resource.

Very true, and one of the main reasons that I live here.....but unfortunately most of those beautiful mountains are owned by Timber companies, and the mineral rights are owned by the coal and/or natural gas companies, with a tad owned by the oil companies......and now we have wind turbines on clear cut mountain tops that supply electricity to New Jersey.....like they would make a noticeable difference in Hoboken or Newark......

SB

Shorebilly · #87 01-05-2007, 08:12 AM

Quote:

Originally Posted by patbob

I agree. Which is one of the reasons I'm willing to support bioD even at the extra ~$1/gal it costs me. First off, I don't drive enough miles per week for it to cost me more than lunch for that same week. Second, the existing distribution system could easily switch to supplying bioD, either pure or as a mixture. A much better short term option than liquid Hydrogen in my opinion. Buying it overpriced helps convince them to keep the pump there and going, which is the first step in solving the chicken-and-egg problem alternative energy has (it has others, but that's one of them).

I buy my commercially produced bioD from this retail location:
http://www.sqbiofuels.com/p_portland-linnton.htm

There is only 1, one, retail bio-diesel location in the entire state of West Virginia.....over in the Eastern Panhandle (more like a suburb of DC), and it's about 200 miles from me.....

I get mine from an outlet up near Pittsburgh, only about 100 miles from me, second closest is in Chillicothe, Ohio......

This is why.....although perhaps not the best idea.....that I think that the Government needs to require some stations to carry the stuff......heck, I would like to see more Petro-Diesel outlets near here.....there are 4 in a 25 mile radius of me........those few filling stations that do sell Diesel have little competition, and their prices are generally 10 to 15 cents per gallon higher than elsewhere......

aklim · #88 01-05-2007, 09:05 AM

Quote:

Originally Posted by Shorebilly

This is why.....although perhaps not the best idea.....that I think that the Government needs to require some stations to carry the stuff......

heck, I would like to see more Petro-Diesel outlets near here.....there are 4 in a 25 mile radius of me........those few filling stations that do sell Diesel have little competition, and their prices are generally 10 to 15 cents per gallon higher than elsewhere......

People tend to want the govt involved because it makes their goal easier to achieve. The kids in the movie also summon the devil because they want their goal. Both tend to get what they deserve. Have you ever seen a bill go thru as just one simple idea? It goes thru, they tack on all sorts of stuff to it and pervert it. In the end, we tend to get it right in the end and without KY either. We take it like a man.

Back to the Chicken and Egg, aren't we? To get diesels more popular, part of it is to get more filling stations. To get more filling stations, you have to get diesel more popular. I mentioned this before but people seemed not to believe that there were places outside Madison, WI that had few filling stations that carried diesel

Shorebilly · #89 01-05-2007, 09:19 AM

Quote:

Originally Posted by aklim

Back to the Chicken and Egg, aren't we? To get diesels more popular, part of it is to get more filling stations. To get more filling stations, you have to get diesel more popular. I mentioned this before but people seemed not to believe that there were places outside Madison, WI that had few filling stations that carried diesel

But.....that 10 to 15 cent increase, primarily due to a lack of competition in the Petro Diesel market.....has made it just that much cheaper for me to use Bio Diesel......I will be making my own here shortly.....and will just wave at those stations as I pass them by......

So if your customers decide to pass you by....because you took what the traffic would bear, rather than being fair and interested in an alternative that would be good for us all.....please don't whine too loudly!!!

SB

BTW.....I drive my 100 miles (one way) to Pittsburgh, once every other month or so....and get my B100....and blend it with Petro, here on the farm for use in my tractor and car......

aklim · #90 01-05-2007, 09:36 AM

Quote:

Originally Posted by Shorebilly

But.....that 10 to 15 cent increase, primarily due to a lack of competition in the Petro Diesel market.....has made it just that much cheaper for me to use Bio Diesel......I will be making my own here shortly.....and will just wave at those stations as I pass them by......

So if your customers decide to pass you by....because you took what the traffic would bear, rather than being fair and interested in an alternative that would be good for us all.....please don't whine too loudly!!!

So far, what I have seen more markups of are in the Biodiesel sellers because they can. I have seen higher costs by that much but that is because the station I frequent has a good location by the interstate whereas most of the other diesel stations are in town and there are only a few of them and their product moves very slowly. I get diesel for $2.59 today. Look at this price. Well, if you can make it work, time wise and all that, go for it. Don't bother to wave to the gas stations since they will be too busy filling up others to notice you or care.

I wouldn't. You cannot expect a station to cover everything. My fav (read cheapest) station has Pepsi products. I am a Coke person. It would be nice if they carried Coke too but the problem is the traffic dictated what they should carry if there was a choice. I'd like to carry every product known to man just to cover all bases but reality bites. They have 3 tanks for the 3 grades of gas. 1 for diesel and you want them to stock one more diesel? One that doesn't move as much? And oh, don't charge too much either. You want fries with that? My warehouse is limited in space. I cannot buy everything and stock it just in case someone wants this. Man's wants are many however his resources are limited. Sometimes you have to make a choice. Business is about making money. That means I have to make choices that might be unpopular to some but popular to most, in general.