Outsorce Oil Co's?

With all the outsourcing to foreign countries of the good jobs that can provide for a family. You know the labor and Industry jobs, Information Technology jobs. I was thinking in an attempt to lower our cost of products we outsource Oil Refineries.

The Cost of Oil effects how much just about Everything costs.

Costs

Crude accounts for 49% of the Costs
Refining accounts for 9% of the Costs
Distributing and Marketing accounts for 18% of the Costs
Taxes account for 24% of the Costs

We currently are outgrowing the US's ability to keep up with production.
More Refineries Needed

Other countries have looked into outsourcing production
Outsourcing

I propose that instead of importing in crude oil and refining it here at extremely high costs. We import the oil and petroleum products after they are refined in foriegn countries at tremendous savings. I believe that this will have a huge impact on lowering the cost of just about every single product. Petroleum products, oil and gas should all drop drastically.

Another benefit would be No operating Refineries here polluting the place up.

Possible? I think it could be done.

Practical? Big Oil Companies would lose tons though, so I see this being blocked and shot down by big oil companies and their supporters though.

So what do ya'll think?

Phae

I dont think the high costs are due to labor but a refinery shortage.

Originally posted by NuTroll
I dont think the high costs are due to labor but a refinery shortage.

Are you sugesting we build more refineries here in the US?

There hasn’t been a major new refinery in the United States since 1976, and experts say none is on the horizon. Refineries are expensive, and nobody likes having a big, smelly refinery near his or her back yard. But another reason you won’t see any refineries springing up soon is that oil companies like things the way they are: Their refineries are operating near capacity, so they sell practically every drop of fuel they make.
....
Insufficient inventories of domestically refined gasoline contribute to high prices and spark fears about gas shortages, as they did last month
....
Because demand for gasoline is greater than what the refineries can produce in many cases, refineries can charge more for gasoline.

So basically If we did outsorce the refining of oil to the countries we get the oil from, they can do it ALOT cheaper than we can, Practically every products price will drop. Petroleum products and Gas will be cheaper, so shipping of products across the US will go down and the consumer price can drop and still cover the profit margin the companies are looking for.

Phae

Originally posted by Phaethor
So basically If we did outsorce the refining of oil to the countries we get the oil from, they can do it ALOT cheaper than we can,

Why? Because they can pay their labour less? Do they even have the refinery capacity to do this?

Also, outsourcing is not somethign done at the national level. Its something a corporation does with its own services. So why would a company that makes money from refining it do this? Outsourcing isn't about lowering prices, its about lowering operating costs. I think that if they could save money doing what you suggest, that they'd want to do it, and have done it.

Maybe the term Outsourcing was the wrong word.

What I am suggesting is rather than Operating expensive, pollutting oil refineries here in the US, we force Oil Companies to have that process done prior to importing into the US.

Is it possible to get the level of capacity we need from the source? I do not know. But there are companies out ther that offer this service. Allowing the oil companies to focus on field development, exploration and acquisition. Let the originating country absorb the refining costs, at a level lower than would be here. Their profits would still be in place as the costs would be passed on to the oil companies, who are now saving money by not operating refineries here in the US. The oil companies will still make a profit because they too would pass that on to the Customer. And the end product would be cheaper overall, increasing sales.

So in essence the Operating Costs here in the US would drop to $0. The cost of the petrolleum products would increase from the source but at a lower level than the crude + the refining process here.

Its a win win situation without gouging the pockets of US Citizens.

Phae

Your proposal would in effect give foregn countries another weapon to harm the US with. Why would we give another portion of our nessisary energy infrastructure to someone who might one day use it against us by restricting access to the facility, closing it down, or leaving it unsecured?

Bad, bad idea, IMO.

Originally posted by Phaethor
Maybe the term Outsourcing was the wrong word.

What I am suggesting is rather than Operating expensive, pollutting oil refineries here in the US, we force Oil Companies to have that process done prior to importing into the US.

To bring down oil costs? Why not just loosen up the taxes on oil?

Let the originating country absorb the refining costs, at a level lower than would be here.

This would also increase the US's foreign dependance, not only for the crude, but for the refined product itself.

Originally posted by Ambient Sound
Your proposal would in effect give foregn countries another weapon to harm the US with. Why would we give another portion of our nessisary energy infrastructure to someone who might one day use it against us by restricting access to the facility, closing it down, or leaving it unsecured?

Bad, bad idea, IMO.

Isn't this very possible now? The Oil Producing facilites are no more or less different than the Refineries, Those countries still have to Refine their own oil as well. If a country really wanted to harm the US with refusing oil they could very well do it now.

Besides those countries rely on the oil we buy. They profit too much from the US to jeapordize the flow of $$.

Phae

Originally posted by Nygdan
To bring down oil costs? Why not just loosen up the taxes on oil?

That too would lower end user costs.

Originally posted by Nygdan
This would also increase the US's foreign dependance, not only for the crude, but for the refined product itself.

That is true.

I guess it would be a descision of trade offs. Your probably right though. The US would never give up its Polluting, and would never want to rely on other countries more than they already do.

Phae