China Is Reaping Biggest Benefits of Iraq Oil Boom

[ElNono]

Before the invasion, Iraq’s oil industry was sputtering, largely walled off from world markets by international sanctions against the government of Saddam Hussein, so his overthrow always carried the promise of renewed access to the country’s immense reserves. Chinese state-owned companies seized the opportunity, pouring more than $2 billion a year and hundreds of workers into Iraq, and just as important, showing a willingness to play by the new Iraqi government’s rules and to accept lower profits to win contracts.

“We lost out,” said Michael Makovsky, a former Defense Department official in the Bush administration who worked on Iraq oil policy. “The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply.”

http://www.nytimes.com/2013/06/03/world/middleeast/china-reaps-biggest-benefits-of-iraq-oil-boom.html?hp

[The Reckoning]

:lol Cheney

[Rogue]

chinks are being Jews on US. US lost an astronomical figure of $ as well as thousands of lives to liberate and open up that country, and the chinks sneaked in and stole the whole feast.

[Wild Cobra]

And you liberals thought we were in it for the oil.

If we were, we would have it!

[Wild Cobra]

chinks are being Jews on US. US lost an astronomical figure of $ as well as thousands of lives to liberate and open up that country, and the chinks sneaked in and stole the whole feast.
I see you don't have a hint of racism in you...

[TDMVPDPOY]

what u think they are doing in africa and australia

fkn buying up supply chains from oil energy, to food land and shit...

[Rogue]

And you liberals thought we were in it for the oil.

If we were, we would have it!

Bush got the majority of avenues from weapon contractors during both elections. dude was the representative of weapon makers in the House and he made every decision for the interest of those who funded his presidential campaign, at the expense of the country's

and you know how much of a conservative i am

did the war in Iraq make US safer? negative. did the US get anything from the war? negative again. cowboy lanuched the wars to divert out attention away from those domestic issues, and more importantly, the war brought those weapon makers lucrative contracts.

if you only went there to destroy WMD (Weapons of Mass Destruction) that the Iraqi government allegedly possessed, you could've just sent a squadron of jets or drones there to get the job done. but Bush's financial contributors don't make jets or drones, they make tanks and cannons that only the army uses, so they tried and managed to deceive the congress/house into buying their bullshit that we had to remove saddam from power, and the land troops were necessary to achieve that goal.

[boutons_deux]

And you liberals thought we were in it for the oil.

If we were, we would have it!

Intelligent people KNOW cheney/rummy/PNAC/neocons went into Iraq for oil, but they blew it. Americans' pain, China's gain.

In early 2003, dubya's inevitable urgency of invading Iraq for oil was caused by Iraq negotiating huge oil contracts with China, Russia, France, excluding specifically former imperial occupier UK and imminent imperial invade/occupier USA.

[Wild Cobra]

Intelligent people KNOW cheney/rummy/PNAC/neocons went into Iraq for oil, but they blew it. Americans' pain, China's gain.

In early 2003, dubya's inevitable urgency of invading Iraq for oil was caused by Iraq negotiating huge oil contracts with China, Russia, France, excluding specifically former imperial occupier UK and imminent imperial invade/occupier USA.
Excuses excuses.

You just can't admit you and other libtards were wrong about us being in it for oil.

[AaronY]

And you liberals thought we were in it for the oil.

If we were, we would have it!
Well wtf did we go there for then?..it certainly wasn't for WMD's..I guess W just wanted to get revenge for his Dad

[boutons_deux]

Iraq invasion was for oil exclusively, behind all the "bad man", WMD pretexts, but US/UK got snookered by France, Russia,China slipping in a getting lots of oil. dubya and his gang committed the largest geopolitical fuckup, and then botched their fucked, in many decades.

[Spurminator]

And you liberals thought we were in it for the oil.

If we were, we would have it!

I don't even think it was all about oil but this is still a really stupid argument.

[boutons_deux]

IT WAS ALL ABOUT OIL

[RandomGuy]

chinks are being Jews on US. US lost an astronomical figure of $ as well as thousands of lives to liberate and open up that country, and the chinks sneaked in and stole the whole feast.

You are assuming the Chinese investment is profitable.

Evidence?

[ElNono]

You are assuming the Chinese investment is profitable.

It's Chinese investment is state-owned... doesn't have to be profitable at all... that's one of the advantages mentioned on the article (that the Chinese will take slim profit-margin deals because they don't have to answer to shareholders and are only interested in the energy)...

[Jacob1983]

Obama, Cheney, and Bush love nation building because they get a cut of the profits. Plain and simple.

[RandomGuy]

It's Chinese investment is state-owned... doesn't have to be profitable at all... that's one of the advantages mentioned on the article (that the Chinese will take slim profit-margin deals because they don't have to answer to shareholders and are only interested in the energy)...

If it is unprofitable, that is fine. If the Chinese goverment wants to subsidize everybody else on the planet, which they would be doing, essentially, by a very unprofitable investment in oil production there, let them.

[RandomGuy]

Obama, Cheney, and Bush love nation building because they get a cut of the profits. Plain and simple.

(facepalm)

Okaaaaay.

[sjacquemotte]

What is the answer? Embargos? Incentives? Pay-offs? China's markets aren't getting better, so they'll keep buying our bonds which will keep Obama from cutting spending. So everyone wins in Socialists world, right?

[ElNono]

If it is unprofitable, that is fine. If the Chinese goverment wants to subsidize everybody else on the planet, which they would be doing, essentially, by a very unprofitable investment in oil production there, let them.

What do you mean? They win out the contracts to exploit the oil rigs and fetch the oil for themselves... they can simply do it without having to show any profits for it, since they're interested in getting the energy, not making a buck out of it.

Companies like Exxon, etc can't compete, since they respond to shareholders and they need to make a buck on it.

It's a biggie, because if they keep driving down the profit margin on those contracts, private companies like Exxon, etc will have to make up for it somewhere else, which normally is consumers.

[ElNono]

What is the answer? Embargos? Incentives? Pay-offs? China's markets aren't getting better, so they'll keep buying our bonds which will keep Obama from cutting spending. So everyone wins in Socialists world, right?

IMO, the answer is to keep improving in tech. Keep improving the oil shale extraction process, reducing it's cost, and also continue investing in deep oil extraction. The Chinese are far behind in those areas. They'll get oil from a regular rig, but if it goes too deep, they don't have the capability to extract (yet). With oil shale, it might not matter at all if they catch up.

[RandomGuy]

What is the answer? Embargos? Incentives? Pay-offs? China's markets aren't getting better, so they'll keep buying our bonds which will keep Obama from cutting spending. So everyone wins in Socialists world, right?

http://www.droidforums.net/forum/attachments/android-news/47077d1328734115t-google-chrome-android-beta-available-now-notsureifserious.png

[RandomGuy]

What do you mean? They win out the contracts to exploit the oil rigs and fetch the oil for themselves... they can simply do it without having to show any profits for it, since they're interested in getting the energy, not making a buck out of it.

Companies like Exxon, etc can't compete, since they respond to shareholders and they need to make a buck on it.

It's a biggie, because if they keep driving down the profit margin on those contracts, private companies like Exxon, etc will have to make up for it somewhere else, which normally is consumers.

You seem to be forgetting that oil is fungible.

Even if 100% of all the oil in Iraq gets poured for free into tanks in China, we still benefit.

Every barrel they get out of this arrangement is one barrel that they aren't bidding against us for.

Lower demand = lower price point

If they want to lose money on this because they think it benefits them somehow, they are subsidizing us.

QED

[RandomGuy]

IMO, the answer is to keep improving in tech. Keep improving the oil shale extraction process, reducing it's cost, and also continue investing in deep oil extraction. The Chinese are far behind in those areas. They'll get oil from a regular rig, but if it goes too deep, they don't have the capability to extract (yet). With oil shale, it might not matter at all if they catch up.


Meh, we can't produce our way out of oil dependence. The only way to reduce our dependency on the inherent volatility of global oil markets is to simply use less oil. We now have the luxury of letting the Chinese, who use more of it, spend their money subsidising world security.

[sjacquemotte]

IMO, the answer is to keep improving in tech. Keep improving the oil shale extraction process, reducing it's cost, and also continue investing in deep oil extraction. The Chinese are far behind in those areas. They'll get oil from a regular rig, but if it goes too deep, they don't have the capability to extract (yet). With oil shale, it might not matter at all if they catch up.
:toast but they'll probably hack the technology.

[sjacquemotte]

You seem to be forgetting that oil is fungible.

Even if 100% of all the oil in Iraq gets poured for free into tanks in China, we still benefit.

Every barrel they get out of this arrangement is one barrel that they aren't bidding against us for.

Lower demand = lower price point

If they want to lose money on this because they think it benefits them somehow, they are subsidizing us.

QED Not to mention, even though it was thought of as a negative when Iraq joined OPEC, they have a pretty big say in the cartel which is a win for us.

[ElNono]

You seem to be forgetting that oil is fungible.

Even if 100% of all the oil in Iraq gets poured for free into tanks in China, we still benefit.

Every barrel they get out of this arrangement is one barrel that they aren't bidding against us for.

I didn't forget anything, but you still seem to be completely missing the point: They compete with us for those contracts, and by accepting the very thin profit margin the Iraq government demands, and getting those contracts, they drive down our oil co's profit margins, which the oil co's will try to recover from somewhere else (ie: customers).


Lower demand = lower price point

If they want to lose money on this because they think it benefits them somehow, they are subsidizing us.

QED

China's oil demand doesn't change one iota. It's actually the exact opposite of subsidizing us, which is what would happen if they bought their oil from Exxon.

If they didn't pump their own gas, the money trail would look like this:

China government --> Exxon --> Iraq government

with Exxon making a profit, and us reaping the benefits (through taxation)

When you have this picture though:

China government --> Iraq government

they simply removed the middle man (us). Overall demand hasn't changed one bit. Exxon won't have excess oil because they simply don't have access to that oil field (which is the one they would've been exploiting in the previous arrangement).

[ElNono]

Meh, we can't produce our way out of oil dependence.

I don't agree with that. I think it's both using less oil and finding better and more effective ways to extract oil than conventional oil rigs.

[boutons_deux]

I don't agree with that. I think it's both using less oil and finding better and more effective ways to extract oil than conventional oil rigs.

A few of us have posted here about "flow rate" of oil and gas being a huge limitation in the future, no matter what the actual reserves are.

And there is the expense of exploration, extraction, eROI, and the external costs of pollution.

The best working assumption/prediction is that oil/gas will be much more expensive in the future, so alternative energy, esp for transport, must be aggressively developed now, but BigCarbon has bought enough Repugs and a few Dems to impede or kill development/deployment of alternatives to fossil energy. Repugs love to sow FUD and doubt about SS 75 years in the future, but deny any problem in near future of expensive carbon energy.

[RandomGuy]

I didn't forget anything, but you still seem to be completely missing the point: They compete with us for those contracts, and by accepting the very thin profit margin the Iraq government demands, and getting those contracts, they drive down our oil co's profit margins, which the oil co's will try to recover from somewhere else (ie: customers).

um, no.

IF the margins are that thin to begin with, then any company going in is going to have a hard time profiting, by definition.

What you are saying here is:

"Our oil companies are losing out on this really really unprofitable opportunity, and will have to make up the lost profits by charging US more."

That is a directly contradictory idea.

[RandomGuy]

China's oil demand doesn't change one iota. It's actually the exact opposite of subsidizing us, which is what would happen if they bought their oil from Exxon.


No, no, and no, Nono.

FUN-GI-BLE.
http://en.wikipedia.org/wiki/Fungibility

Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution, such as sweet crude oil, shares in a company, bonds, precious metals, or currencies.

It refers only to the equivalence of each unit of a commodity with other units of the same commodity. Fungibility does not describe or relate to any exchange of one commodity for some other, different commodity.

China oil consumption:
100 units.
Purchased imports: 80
Domestic production: 10
Iraqi plunder: 10

Amount required to purchase on open market from all non-domestic, non-iraqi sources: 80

Subtract Iraqi oil from the above, China's economy still demands 100 units of oil.

Domestic production: 10
Purchased globally: 90

China now is bidding with the US on a global scale for 90 units of oil, instead of 80 before, making the net demand on the oil markets 90.

More demanded units relative to supply = higher price point.

http://en.wikipedia.org/wiki/Supply_and_demand

[RandomGuy]

I don't agree with that. I think it's both using less oil and finding better and more effective ways to extract oil than conventional oil rigs.

FUNGIBLE.

FUNGIBLE.

FUNGIBLE.


Even if we produced 110% of all of our consuption, and exported the remainder, we would STILL be subject to price increases at home because of global supply/demand.

Do you understand why that is?

[ElNono]

um, no.

IF the margins are that thin to begin with, then any company going in is going to have a hard time profiting, by definition.

What you are saying here is:

"Our oil companies are losing out on this really really unprofitable opportunity, and will have to make up the lost profits by charging US more."

That is a directly contradictory idea.

FTA:

Notably, what the Chinese are not doing is complaining. Unlike the executives of Western oil giants like Exxon Mobil, the Chinese happily accept the strict terms of Iraq’s oil contracts, which yield only minimal profits. China is more interested in energy to fuel its economy than profits to enrich its oil giants.

If Iraq didn't have China accepting the shitty terms of the contracts they offer, they would need to sit down with us and negotiate better terms. But since China isn't looking to make a buck, they happily accept whatever shitty conditions. We can't compete with that, because companies like Exxon need to respond to their shareholders, which want to make a solid profit.

At the same time, Exxon needs to pump oil to meet their customer's demand. They can't just walk away from every contract bid. In time, they'll have to start accepting some of these shitty deals. In order to keep up with their profit margins, they're going to have to look for them somewhere else. Either that or they somehow force China to stop driving down the contract's profit margins.

[boutons_deux]

Exacty, China's 1% primarily needs oil, while the US/UK primary concern is profit.

[ElNono]

No, no, and no, Nono.

FUN-GI-BLE.
http://en.wikipedia.org/wiki/Fungibility


China oil consumption:
100 units.
Purchased imports: 80
Domestic production: 10
Iraqi plunder: 10

Amount required to purchase on open market from all non-domestic, non-iraqi sources: 80

Subtract Iraqi oil from the above, China's economy still demands 100 units of oil.

Domestic production: 10
Purchased globally: 90

China now is bidding with the US on a global scale for 90 units of oil, instead of 80 before, making the net demand on the oil markets 90.

More demanded units relative to supply = higher price point.

http://en.wikipedia.org/wiki/Supply_and_demand

So you're agreeing that external demand hasn't changed one iota :lol

In your example, it was 90 before signing an agreement with Iraq and it's 90 after signing an agreement with Iraq.

The difference is *who makes money* in the different arrangements.

- When they buy barrels, the guys pumping out the oil make a chunk (ie: Exxon[us]), and so does the country providing the goods (Iraq, Venezuela, Saudi Arabia, etc).
- When they pump their own, the only one making money is the country providing the goods (Iraq, Venezuela, Saudi Arabia, etc).

The second arrangement has many benefits for them. It's not only removing a middle-man, but also allows them to potentially negotiate in non-US currency for the goods.

There's simply no scenario with the second arrangement where we benefit at all. The closest you could argue is that it's neutral. It doesn't hurt us but it doesn't benefit us either.

[ElNono]

FUNGIBLE.

FUNGIBLE.

FUNGIBLE.

Even if we produced 110% of all of our consuption, and exported the remainder, we would STILL be subject to price increases at home because of global supply/demand.

Do you understand why that is?

I'm arguing we can get to the point (through technology) where there's excess supply (globally). Let me know what part you missed about that.

[RandomGuy]

FTA:

Notably, what the Chinese are not doing is complaining. Unlike the executives of Western oil giants like Exxon Mobil, the Chinese happily accept the strict terms of Iraq’s oil contracts, which yield only minimal profits. China is more interested in energy to fuel its economy than profits to enrich its oil giants.

If Iraq didn't have China accepting the shitty terms of the contracts they offer, they would need to sit down with us and negotiate better terms. But since China isn't looking to make a buck, they happily accept whatever shitty conditions. We can't compete with that, because companies like Exxon need to respond to their shareholders, which want to make a solid profit.

At the same time, Exxon needs to pump oil to meet their customer's demand. They can't just walk away from every contract bid. In time, they'll have to start accepting some of these shitty deals. In order to keep up with their profit margins, they're going to have to look for them somewhere else. Either that or they somehow force China to stop driving down the contract's profit margins.


If the United States invasion and occupation of Iraq ended up benefiting China, American energy experts say the unforeseen turn of events is not necessarily bad for United States interests. The increased Iraqi production, much of it pumped by Chinese workers, has also shielded the world economy from a spike in oil prices resulting from Western sanctions on Iranian oil exports. And with the boom in American domestic oil production in new shale fields surpassing all expectations over the last four years, dependence on Middle Eastern oil has declined, making access to the Iraqi fields less vital for the United States.

At the same time, China’s interest in Iraq could also help stabilize the country as it faces a growing sectarian conflict

Quite frankly, I think it is great the the Chinese are getting in there.

Now they have a direct interest in Middle East stability.

[RandomGuy]

I'm arguing we can get to the point (through technology) where there's excess supply (globally). Let me know what part you missed about that.

There is no such thing as excess supply in an economic sense.

Honestly, I'm going to stop here, because I am using an intellectual framework of formal economic education that you are obviuosly not, no offense.

The article doesn't quite say what you think it does, and the reasoning supporting your preferred policy solution is based on a flawed understanding of supply and demand as far as I can see.

Not sure how I can remedy or argue with that.

[RandomGuy]

Quite frankly, I think it is great the the Chinese are getting in there.

Now they have a direct interest in Middle East stability.


“Our interest is the oil gets produced and Iraq makes money, so this is a big plus,” said David Goldwyn, who was the State Department coordinator for international energy affairs in the first Obama administration. “Geopolitically it develops close links between China and Iraq, although China did not get into it for the politics. Now that they are there, they have a great stake in assuring the continuity of the regime that facilitates their investment.”

Guess I am not alone in that sentiment. :D

[RandomGuy]

So you're agreeing that external demand hasn't changed one iota :lol

In your example, it was 90 before signing an agreement with Iraq and it's 90 after signing an agreement with Iraq.

The difference is *who makes money* in the different arrangements.

- When they buy barrels, the guys pumping out the oil make a chunk (ie: Exxon[us]), and so does the country providing the goods (Iraq, Venezuela, Saudi Arabia, etc).
- When they pump their own, the only one making money is the country providing the goods (Iraq, Venezuela, Saudi Arabia, etc).

The second arrangement has many benefits for them. It's not only removing a middle-man, but also allows them to potentially negotiate in non-US currency for the goods.

There's simply no scenario with the second arrangement where we benefit at all. The closest you could argue is that it's neutral. It doesn't hurt us but it doesn't benefit us either.


Even if we produced 110% of all of our consuption, and exported the remainder, we would STILL be subject to price increases at home because of global supply/demand.



Can you explain why my bolded statement is true?

[RandomGuy]

FTA:

Notably, what the Chinese are not doing is complaining. Unlike the executives of Western oil giants like Exxon Mobil, the Chinese happily accept the strict terms of Iraq’s oil contracts, which yield only minimal profits. China is more interested in energy to fuel its economy than profits to enrich its oil giants.

If Iraq didn't have China accepting the shitty terms of the contracts they offer, they would need to sit down with us and negotiate better terms.

That is something of an unprovable assumption on your part, isn't it?

That is often not the case. Oil majors go in all the time into such places at really bad terms, or simply have their really expensive investments nationalized, ala BP's Russia venture.

Arguable, but not a very strong argument.

Again, I don't see the Chinese losing money on oil as a problem for the US in general, especially given that our oil majors are still solidly profitable.

Sorry. Not an issue that I care much about, other than a certain schadenfreude at China losing money subsidizing my gasoline.

[ElNono]

Quite frankly, I think it is great the the Chinese are getting in there.

Now they have a direct interest in Middle East stability.


Guess I am not alone in that sentiment. :D

That's a nice goal post move (we're discussing economics), but frankly, I don't even think they care. I don't think the Chinese particularly care about the stability in the region. Just my personal opinion.



There is no such thing as excess supply in an economic sense.

Honestly, I'm going to stop here, because I am using an intellectual framework of formal economic education that you are obviuosly not, no offense.

The article doesn't quite say what you think it does, and the reasoning supporting your preferred policy solution is based on a flawed understanding of supply and demand as far as I can see.

Not sure how I can remedy or argue with that.

This isn't really complicated. While under profit-motive economy (capitalism), excess supply is rare, the whole world doesn't necessarily operates under capitalism.

Both Marx (Das Kapital) and Keynes (General Theory) address/critique overproduction, Say's Law, etc, and offer their own takes on it. You can go back to economic classics of the 1800's (Augustus Kelley, Henry George, etc) addressing excess supply.


Can you explain why my bolded statement is true?

Because we operate under a profit-motive economy, where goods are priced based on what people can pay vs actual cost on supply-demand.

The part you're missing is that popular pressure when you actually are a net producer does bring prices down. Which is a huge reason why gas is much cheaper on net producing countries than anywhere else.


That is something of an unprovable assumption on your part, isn't it?

What do you mean? Iraq wants the money, there's zero doubt about that, seeing they're offering the contracts. What's an assumption about that?

The only question is: what terms can they get away with?


That is often not the case. Oil majors go in all the time into such places at really bad terms, or simply have their really expensive investments nationalized, ala BP's Russia venture.

Arguable, but not a very strong argument.

:lol so what you're saying is that the solution for these oil co's is pull a 'china'. In other words, lose the "profit-motive" by going state-owned.

That can be a solution. I do, however, think that should the US go that route, the shareholders will be severely screwed.


Again, I don't see the Chinese losing money on oil as a problem for the US in general, especially given that our oil majors are still solidly profitable.

Sorry. Not an issue that I care much about, other than a certain schadenfreude at China losing money subsidizing my gasoline.

Well, we'll see how it plays out. Having a former DoD official in charge of oil policy in Iraq stating “We lost out", certainly isn't reassuring, tbh.

[Nbadan]

Even if 100% of all the oil in Iraq gets poured for free into tanks in China, we still benefit.

We really need to shift our thinking on oil from being a oil dependent nation to being an oil independent nation...I hate fracking...but why shouldn't American consumers benefit from living in a oil rich nation? dig here, dig now means shit when oil companies are shipping our oil to Europe for higher profits and leave Amercans at the mercy of world markets...

[boutons_deux]

"leave Amercans at the mercy of world markets"

that's raw, unregulated, mostly cartelized capitalism: sell the least of the shittiest possible (commodity) product for the highest possible price to whomever offers the highest price.

Anybody know of any mega-corp's articles of incorporation where patriotism trumps profits?

[RandomGuy]

That's a nice goal post move (we're discussing economics).

That isn't what "moving the goalposts" means. "Moving the goalposts" is changing the standards of evidence for a particular assertion.

You have confused this with simply going off on a tangent, which happens a lot here.

[RandomGuy]

I don't think the Chinese particularly care about the stability in the region. Just my personal opinion.


They haven't until now, because we have taken care of it, and because they haven't needed to care. They were net oil exporters until the 90's so this whole thing is new to them.

They really really really care about energy security, and that means ME peace and stability. They are new to it, but I would willing to bet a great deal of money that it is starting to occupy conversations in and around Beijing.

[RandomGuy]

.

The part you're missing is that popular pressure when you actually are a net producer does bring prices down. Which is a huge reason why gas is much cheaper on net producing countries than anywhere else.

We may be getting a bit closer here.

Prove that assertion. Data, please.

Define "popular pressure".

[RandomGuy]

[a lot of non-answering]

"Even if we produced 110% of all of our consuption, and exported the remainder, we would STILL be subject to price increases at home because of global supply/demand."


Why is this true? Please explain it, or, if you don't understand why, just say so.

[boutons_deux]

The part you're missing is that popular pressure when you actually are a net producer does bring prices down. Which is a huge reason why gas is much cheaper on net producing countries than anywhere else.


huh? those countries' 1% hands out, sells cheap subsidized bread, food, gas to maintain the 1%'s power structure and keep the 99% in poverty and powerlessness. "popular pressure" is intimidated by the gun barrels of the military.

[ElNono]

That isn't what "moving the goalposts" means. "Moving the goalposts" is changing the standards of evidence for a particular assertion.

You have confused this with simply going off on a tangent, which happens a lot here.

Moving the goalposts is an informal logical fallacy in which previously agreed upon standards for deciding an argument are arbitrarily changed once they have been met. (link (http://rationalwiki.org/wiki/Moving_the_goalposts))

Moving the goalposts (or shifting the goalposts) is a metaphor meaning to change the criterion (goal) of a process or competition while still in progress, in such a way that the new goal offers one side an intentional advantage or disadvantage. (link (http://en.wikipedia.org/wiki/Moving_the_goalposts))

It's simply a metaphor for changing the subject. Which is exactly what you did.


We may be getting a bit closer here.

Prove that assertion. Data, please.

Define "popular pressure".

http://www.csmonitor.com/World/2012/0229/World-s-cheapest-gas-Top-10-countries/

The response of "popular pressure" is in the description of the entries themselves.


"Even if we produced 110% of all of our consuption, and exported the remainder, we would STILL be subject to price increases at home because of global supply/demand."

Why is this true? Please explain it, or, if you don't understand why, just say so.

Already answered. I think you're a pretty smart fella, but if my response was too complicated for you or you didn't understand it, just tell what what you didn't get and we'll go from there.

[ElNono]

huh? those countries' 1% hands out, sells cheap subsidized bread, food, gas to maintain the 1%'s power structure and keep the 99% in poverty and powerlessness. "popular pressure" is intimidated by the gun barrels of the military.

That's logical fallacy. If they didn't fear the people, what's the point of giving them "cheap subsidized bread, food, gas"?

It's a rhetorical question, BTW.

[RandomGuy]

Moving the goalposts is an informal logical fallacy in which previously agreed upon standards for deciding an argument are arbitrarily changed once they have been met. (link (http://rationalwiki.org/wiki/Moving_the_goalposts))

Moving the goalposts (or shifting the goalposts) is a metaphor meaning to change the criterion (goal) of a process or competition while still in progress, in such a way that the new goal offers one side an intentional advantage or disadvantage. (link (http://en.wikipedia.org/wiki/Moving_the_goalposts))

It's simply a metaphor for changing the subject. Which is exactly what you did.

(sighs) No it is not a metaphor for changing the subject. That is not what changing the goalposts means.


Quite frankly, I think it is great the the Chinese are getting in there.

Now they have a direct interest in Middle East stability.




[QUOTE=my observation]Guess I am not alone in that sentiment.

Exactly what standard or criterion did I change here? Be specific. If you have trouble spelling it out, that should tell you something.

[RandomGuy]

The response of "popular pressure" is in the description of the entries themselves.



That is not a definition of "popular pressure". Either you can define it in an accessable clear way, or you can't. This is not rocket science, and it forms the basis of your argument, so it is important.

Your assertion that "popular pressure... when you are a net producer brings prices down" is bullshit, especially when applied to the US, and that is pretty easy to show to a reasonable degree.

If you can't define it, just say so.

[RandomGuy]

Even if we produced 110% of all of our consuption, and exported the remainder, we would STILL be subject to price increases at home because of global supply/demand. [why is this true?]


Because we operate under a profit-motive economy, where goods are priced based on what people can pay vs actual cost on supply-demand.

So, even if we made all the oil we produced, and exported the excess, then we would still be subject to global fluctuations in the price of oil. It would seem we agree on that.

Do you agree with my bolded statement? Yes or no will do.

[TeyshaBlue]

I think, (and that's a generous description of my mental activity this morning) that EN is trying to fold the popular pressure argument into an oil discussion where, it simply does not apply.
Now, nat gas is another matter, and I think that's what has EN going down this path.

[ElNono]

(sighs) No it is not a metaphor for changing the subject. That is not what changing the goalposts means.

You don't get to say what *anything* means without substantiating it (something I did, but you did not). If you're going to tell anybody else to substantiate what they say, at least have a modicum of courtesy and do the same.


[quote from someone else mirroring that statement]

Exactly what standard or criterion did I change here? Be specific. If you have trouble spelling it out, that should tell you something.

You attempted to move the conversation to geopolitics, when we were having a discussion about economics.

That's not to say geopolitics isn't a valid (yet different) discussion topic, it just isn't what we're discussing.

Let me know if that's not specific enough for you. :rolleyes


That is not a definition of "popular pressure". Either you can define it in an accessable clear way, or you can't. This is not rocket science, and it forms the basis of your argument, so it is important.

pressure NOUN

persuasion/force
4 [uncountable] the act of trying to persuade or to force somebody to do something
pressure (for something) The pressure for change continued to mount.
pressure (on somebody) (to do something) There is a great deal of pressure on young people to conform.
The government eventually bowed to popular pressure (= they agreed to do what people were trying to get them to do).
Teenagers may find it difficult to resist peer pressure.


http://oald8.oxfordlearnersdictionaries.com/dictionary/pressure_1


Your assertion that "popular pressure... when you are a net producer brings prices down" is bullshit, especially when applied to the US, and that is pretty easy to show to a reasonable degree.

Well, that's probably where the confusion stems. The US isn't a net producer (it imports substantially more oil than it exports).

Perhaps I should have used "net exporter" instead of "net producer". If that's what caused the confusion, I apologize.

The evidence provided actually backs up that contention clearly.

What's not rocket science is to see that it's much easier to convince people to pay more for their gas when you are importing oil from overseas, and you have all the associated logistics costs (transportation, etc).


So, even if we made all the oil we produced, and exported the excess, then we would still be subject to global fluctuations in the price of oil. It would seem we agree on that.

Do you agree with my bolded statement? Yes or no will do.

I don't agree that global fluctuations in the price of oil are the sole determinant of consumer pricing in the US. As a matter of fact, it isn't, and it's very easy to prove.

What's more, it's irrelevant to this scenario, since you already agreed that china's external demand hasn't changed one bit under this arrangement, thus overall supply/demand hasn't changed at all.

Let me know if you still have any doubts.

[ElNono]

I think, (and that's a generous description of my mental activity this morning) that EN is trying to fold the popular pressure argument into an oil discussion where, it simply does not apply.
Now, nat gas is another matter, and I think that's what has EN going down this path.

How so?

[TDMVPDPOY]

using ur money to pump up t heir own SOE taking out the competition even if they run losses or just buy out the competitor for its supply lines...

[TeyshaBlue]

How so?

Your analysis is spot on for nat gas pricing....and I think the whole Net export vs. Net production confusion mussed the discussion up a bit. Now go to your room and think about what you've done.:p:

[ElNono]

Your analysis is spot on for nat gas pricing....and I think the whole Net export vs. Net production confusion mussed the discussion up a bit. Now go to your room and think about what you've done.:p:

FWIW, we're not discussing the current situation.

My argument was that if the US would be able to produce massive amounts of oil (ie: through ramped up oil shale extraction) and reduce consumption (through more efficient technology), to become an actual net-exporter of oil, consumer prices of oil byproducts such as gas would drop down. Now I don't think they would bottom out, because pricing strategies in the US vary wildly by location and company (ie: market-value pricing, penetration pricing, etc).

But as seen in other oil net-exporter nations (linked on that article), once the country doesn't rely on outside actors for supply and becomes self-suficient, there's basically a new tool in the political arsenal to quench popular demand for better gas pricing (which is always there, whether you're self-suficient or not), and politicians are never shy to use it. But make no mistake, that tool is there because of popular demand. If the people didn't bitch, then that wouldn't be there.

[RandomGuy]

I think, (and that's a generous description of my mental activity this morning) that EN is trying to fold the popular pressure argument into an oil discussion where, it simply does not apply.
Now, nat gas is another matter, and I think that's what has EN going down this path.

What he is tryign to argue, if I gather correctly, is that somehow the US goverment will suddenly decide to start subsidizing gasloline like all these other countries if we somehow end up a net oil exporter.

I'm not really sure, which is why I am trying to get things a bit clearer.

[RandomGuy]

You don't get to say what *anything* means without substantiating it (something I did, but you did not). If you're going to tell anybody else to substantiate what they say, at least have a modicum of courtesy and do the same.



You attempted to move the conversation to geopolitics, when we were having a discussion about economics.

That's not to say geopolitics isn't a valid (yet different) discussion topic, it just isn't what we're discussing.

Let me know if that's not specific enough for you. :rolleyes


That is not a criterion or any specific metric, and in case you didn't notice, I kept addressing the economics.

I didn't change the subject, I expressed an opinion about whether it was good or bad overall.

[RandomGuy]

Moving the goalposts, also known as raising the bar, is an informal logically fallacious argument in which evidence presented in response to a specific claim is dismissed and some other (often greater) evidence is demanded. In other words, after an attempt has been made to score a goal, the goalposts are moved to exclude the attempt."I think it is a good thing that..."

Does not dismiss any claim or demand any other evidence, you fucktard, and it does not constitute moving goalposts, merely noting something in passing.

I didn't ask your dumb ass for any greater evidence.

I didn't dismiss a goddamned fucking thing you said.

I expressed an opinion.

No more no less.

[RandomGuy]

What's more, it's irrelevant to this scenario, since you already agreed that china's external demand hasn't changed one bit under this arrangement, thus overall supply/demand hasn't changed at all.

No, actually I didn't. That was precisely the opposite point I was attempting to make.

[TeyshaBlue]

"I think it is a good thing that..."

Does not dismiss any claim or demand any other evidence, you fucktard, and it does not constitute moving goalposts, merely noting something in passing.



Ohhhhohhhhh...I know what this one is!!!!111 *Waves hand wildly*

[RandomGuy]

Let's expand it a bit. I will simplify a bit.

Chinese consumption of oil: 100 units
Iraq consumption of oil: 5

World production/consumption: 400 units
Non-Chinese units of oil consumed: 300 units.

Chinese production, domestic: 10 units.
Iraq production: 10 units.
Iraq exports to world: 5

China decides to unprofitably invest in Iraqi production, and gets to benefit from this, bying 100% of Iraqi exports, for the sake of argument.

New Iraq production: 20 units.
Net Iraq exports: 15 units.

Net world production: 410 units.
Net Chinese consumption is still 100 units.

Non-chinese oil production/consumption: 310.

10 more units are available to everybody, increasing supply beyond where it would be normally.

That means, all other things equal, that anybody, including the US, gets slightly cheaper oil, since there is now more supply relative to demand.

Basically what has happened is that the Chinese have lost money producing oil that would not have been produced otherwise, and because they are not bidding against us for the oil that is produced, we benefit.

FUNGIBLE.

China's external demand does not change, but they have added new capacity that could not profitably be produced otherwise, which amounts to a subsidy of everybody else's oil.

[RandomGuy]

Ohhhhohhhhh...I know what this one is!!!!111 *Waves hand wildly*

It is only ad hominem if I say El Nono is wrong because he is a fucktard.

He isn't. He is just a fucktard. He is wrong, because he can't support his assertion ( that the US government will suddenly decide to subsidize gasoline for everybody if we become a net exporter of oil).

How much would the Republican party support taxes on oil exporters/producers for gasoline subsidies for the poor? More taxes, more nanny state giveaways?

That is what he is going with.

He is wrong, because his argument is more than a little bit implausible. Well that and not understanding what the phrase moving the goalposts means, despite reading the definition more than once.

That is not ad hominem. That is just someone being an idiot.
Name calling, yes. Logical fallacy... no.

[TeyshaBlue]

EN is not an idiot, nor is he a fucktard (whatever the hell that is). He is a stubborn fucker tho! :p:
Ad Hominem. I get a star!

[TeyshaBlue]

He is a stubborn fucker tho! :p:


So are you, btw.:lol

[ElNono]

What he is tryign to argue, if I gather correctly, is that somehow the US goverment will suddenly decide to start subsidizing gasloline like all these other countries if we somehow end up a net oil exporter.

I'm not really sure, which is why I am trying to get things a bit clearer.

Doesn't have to be a subsidy. It can simply be pricing regulation, much like in the case of private-run public utilities.


That is not a criterion or any specific metric

Let me repeat it one more time in case I wasn't clear the first time: you don't get to referee absolutely anything in this conversation.

Furthermore, that was concise and to the point (which is exactly what you asked, specificity). As a matter of fact, you understood it very clearly, considering the rest of your response...


and in case you didn't notice, I kept addressing the economics.

I didn't change the subject, I expressed an opinion about whether it was good or bad overall.

You actually replied to one of my posts that centered entirely on the economic issue, with a response on geopolitics.


No, actually I didn't. That was precisely the opposite point I was attempting to make.

So start explaining how China's external demand has changed under this new agreement. Be specific

[ElNono]

Let's expand it a bit. I will simplify a bit.

Chinese consumption of oil: 100 units
Iraq consumption of oil: 5

World production/consumption: 400 units
Non-Chinese units of oil consumed: 300 units.

Chinese production, domestic: 10 units.
Iraq production: 10 units.
Iraq exports to world: 5

China decides to unprofitably invest in Iraqi production, and gets to benefit from this, bying 100% of Iraqi exports, for the sake of argument.

New Iraq production: 20 units.
Net Iraq exports: 15 units.

Net world production: 410 units.
Net Chinese consumption is still 100 units.

Non-chinese oil production/consumption: 310.

10 more units are available to everybody, increasing supply beyond where it would be normally.

That means, all other things equal, that anybody, including the US, gets slightly cheaper oil, since there is now more supply relative to demand.

Basically what has happened is that the Chinese have lost money producing oil that would not have been produced otherwise, and because they are not bidding against us for the oil that is produced, we benefit.

FUNGIBLE.

China's external demand does not change, but they have added new capacity that could not profitably be produced otherwise, which amounts to a subsidy of everybody else's oil.

:lmao it's still going over your head

The *contract* for those 10 extra units is out there for *everybody*. The extra 10 units of production are going to be added to the Net world production whether it's China, Exxon or any other Oil company.

As a matter of fact, Exxon and every other oil company have as much desire to exploit those extra 10 units as the Chinese.

The extra 10 units added to the Net world production are inevitable, and have nothing to do with the Chinese, it has everything to do with Iraq extending a contract.

China isn't even taking a loss. They're simply accepting terms on a contract that are not *as profitable* as Exxon or other Oil extraction company want it to be.

Let me know when you actually wrap your head around what's actually happening.

[ElNono]

Actually, I was out of line by calling RG a fucking idiot. I apologize to RG (edited the post now, but the apology stands). I don't hate him or anything. I just think he doesn't really understand what is happening in this arrangement.

This isn't China trying to exploit some previously undiscovered oil rig somewhere else. These are oil fields that go to China, Exxon or whoever Iraq decides gives the better offer.

[ElNono]

EN is not an idiot, nor is he a fucktard (whatever the hell that is). He is a stubborn fucker tho! :p:
Ad Hominem. I get a star!

Italian gene, IMO

[ElNono]

He isn't. He is just a fucktard. He is wrong, because he can't support his assertion ( that the US government will suddenly decide to subsidize gasoline for everybody if we become a net exporter of oil).


It was simply an opinion based on ample evidence from other net-exporter countries. Evidence presented actually supports the notion that net-exporters do fall for that trap.

I also don't buy the 'Republicans won't stand for this' angle. Republicans are very happy to hand out subsidies, including farm and oil. This is a fact.

I wouldn't even be surprised if the Republicans would propose such a thing, and the Democrats would oppose it. That's just how politics work in this country.

[clambake]

as wc would say..........i think you all are a bunch of teachers.

[RandomGuy]

EN is not an idiot, nor is he a fucktard (whatever the hell that is). He is a stubborn fucker tho! :p:
Ad Hominem. I get a star!

Technically it isn't ad hominem. Insulting, but not a logical fallacy.

He isn't wrong because he is an idiot. He is an idiot because he is wrong. Or stubborn.

[RandomGuy]

:lmao it's still going over your head

The *contract* for those 10 extra units is out there for *everybody*. The extra 10 units of production are going to be added to the Net world production whether it's China, Exxon or any other Oil company.

As a matter of fact, Exxon and every other oil company have as much desire to exploit those extra 10 units as the Chinese.

The extra 10 units added to the Net world production are inevitable, and have nothing to do with the Chinese, it has everything to do with Iraq extending a contract.

China isn't even taking a loss. They're simply accepting terms on a contract that are not *as profitable* as Exxon or other Oil extraction company want it to be.

Let me know when you actually wrap your head around what's actually happening.

Honestly, this is beginnig to remind me of an argument I once witnessed two coworkers having.

They were both arguing saying the same thing, but slightly differently. Neither one of them seemed to grasp that they were both making the same argument.

The Chinese are actually happy to lose money on resource extraction as they are willing to lose money on the resources to be able to keep up exporting manufactured goods.

Whether they are doing so here... is still not really all that evident. Their companies are notoriously opaque.

[RandomGuy]

Actually, I was out of line by calling RG a fucking idiot. I apologize to RG (edited the post now, but the apology stands). I don't hate him or anything. I just think he doesn't really understand what is happening in this arrangement.

This isn't China trying to exploit some previously undiscovered oil rig somewhere else. These are oil fields that go to China, Exxon or whoever Iraq decides gives the better offer.

Meh, I can be a fucktard too, at times. I am most definitely a stubborn son of a bitch. Just read the "moon landings were faked in a studio" thread if you need any proof.

IN this case, I do get it.

I just don't see it as a problem. If the Chinese want to accept slim to negative margins, let them.

Welcome to the new millenia.

[RandomGuy]

as wc would say..........i think you all are a bunch of teachers.

Indeed.

[RandomGuy]

It was simply an opinion based on ample evidence from other net-exporter countries. Evidence presented actually supports the notion that net-exporters do fall for that trap.

I also don't buy the 'Republicans won't stand for this' angle. Republicans are very happy to hand out subsidies, including farm and oil. This is a fact.

I wouldn't even be surprised if the Republicans would propose such a thing, and the Democrats would oppose it. That's just how politics work in this country.

Republicans are happy to subsidize businesses, yes. Farm is one of the things they very hypocritically subsidize.

I just don't see enough of a poltical push for subsidies on gasoline in the US. Tea party doo-dahs and green dems would align against that to kill it dead. Odd, but my take on what would happen to such a thing.

[FuzzyLumpkins]

The only thing that I would say is that the world oil market does not strike me as a true free market where typical supply and demand notions are sovereign.

It's one giant price fix.