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Still waiting on the reply there Cowboy.
Let's flesh out this idea with some actual facts, because that usually helps get a better perspective.
US % of Global oil production, please.
Heh, I am probably older than you are.
You also seem to not be in possession of some facts needed to really consider this properly.
So, since you seem to want to take up the challenge of trying to support this stupid idea, let's begin, and see where it leads. I give you kudos for at least having the stones to try.
Riddle me this:
Currently the US produces what % of yearly global oil production?
Still waiting on the reply there Cowboy.
Let's flesh out this idea with some actual facts, because that usually helps get a better perspective.
US % of Global oil production, please.
I'm not sure why you expect someone else to supply you with something you should be able to look up. Perhaps he's waiting for you to address the ass-whipping you received at the bottom of the previous page.
I really didn't think your post was really worth responding to, but if you insist...
This is a rather perfect example of bad logic. The technical term for your particular mistake is "post hoc". "It rained after I washed my car, therefore washing my car caused it to rain".
"Prices dropped after Bush allowed for greater US oil exploration/drilling, therefore when Bush allowed for greater US oil exploration/drilling it caused the price of oil to drop."
Further evidence of fail is that the price of oil futures which is the price of oil you see in the news, IS ONLY FOR DELIVERIES WITHIN THE NEXT 30 DAYS.
People who trade oil for a living know that it takes YEARS to fully develop a field and bring it online.
For you to be able to prove that Bush's decision actually caused the price drop and that it simply wasn't a coincidence, you would have to show two things:
1) You would have to give actual statements from traders, producers, and buyers that stated something to the effect of "We started selling down the futures because of Bush's decision".
and
2) That people who buy/sell/produce/refine oil don't know that any decision affecting production 5 to 10 years from now doesn't affect crude oil prices next month.
-------------
Since we all know that you can't do the first thing because you are talking out your ass, I won't even bother asking you to produce something that doesn't exist and since you are in the second part assuming that people who trade/produce/consume oil don't know how oil production works, we can reasonably assume that it is much more likely that YOU don't know how oil production works than the people who do it for a living.
Last edited by RandomGuy; 03-20-2009 at 08:04 AM.
http://www.photius.com/rankings/econ...on_2008_0.htmlOriginally Posted by RandomGuy
As I said before: If we produced enough oil to supply 100% of our oil needs TODAY, we would still be vulnerable price-wise to potential dispruptions in the middle east, or venezuala.
US oil consumption 20m bbl per day
Global oil consumption 80m bbl per day.
http://www.photius.com/rankings/econ...on_2008_0.html
Global oil production 80m bbl per day
US oil production 8.3m bbl per day
75% of all oil consumption takes place outside the US.
86% of all oil production takes place outside of the US.
In a free market system, a US oil producer can either sell oil to a US refinery OR sell oil to say, a European or Chinese refinery.
If Saudi Arabia decends into a civil war, and that removes 15%+ of world supply, that would mean a shortfall of production that would raise prices globally as demand exceeded supply at the price point that it was at before the disruption.
Riddle me this:
If prices in the rest of the world double, and you are a US producer of oil, would you sell oil at $50 per bbl to a US refiner, or $100 per bbl to a European/Chinese refiner?
If you answer, "I would make some bank by selling to the Europeans/Chinese" then you have a free market answer to why you would still be vulnerable to foreign instability.
The only way you can truly insulate yourself from this is to forbid US producers from selling oil to anybody else, thereby prohibiting a free market, and eliminating the incentive for US producers to develop domestic reserves that can only be sold for half of what it could get on a true free market.
Prices are set by the intersection of the GLOBAL supply and demand curves, not the US in isolation. That is why you fail.
Last edited by RandomGuy; 03-20-2009 at 08:37 AM.
I am an accountant, and am about 3 classes shy of a masters in accounting.
I have taken micro and macro economics as an undergraduate, and about 20+ hours of finance and economics at the graduate level. All of my electives for my masters degree have gone into finance and economics (including international economics) because I really like the topics, and I have gotten very solid A's in all of those classes.
On a daily basis, I read up on energy topics, business, finance, and economics news.
I tend to evaluate environmantal laws from a truly economic perspective, and have found that, more often than many on the right realize, those laws tend to have rather beneficial effects on the economy that are completely overlooked.
Take the restrictions on close-in oil production for example.
They were put in place partly as a reaction to the Exxon Valdez disaster, which is STILL being cleaned up over a decade after the spill.
Oil spills tend to damage a lot more than just a few birds on the beaches. They destroy coastal property values, destroy fishing industries, destroy tourism industries in coastal areas. True economic damage from a catastrophic large oil spill can easily run into the hundreds of millions to billions when all the real economic impacts are tallied up.
I am not against oil production. Oil will be produced and consumed and that is how any free-market system works.
Personally, I wish we would develop ANWAR just to shut the "drill here, drill now" idiots up about it, mostly because I would then be able to point to the fact that there wasn't any real drop in the price of oil/gas afterwards.
Step up and write a response to my previous 3 or 4 posts whenever.
The invitation for you to explain to young ignorant me why I am wrong about how economics and oil markets work is open to you too.
Don't we still get most of our oil from Canada and Mexico?
That makes a of a lot of sense. Good thing that the oil we import from South America and the Middle East magically teleports itself to storage tanks at the refineries and doesn't have to come in by tanker.I tend to evaluate environmantal laws from a truly economic perspective, and have found that, more often than many on the right realize, those laws tend to have rather beneficial effects on the economy that are completely overlooked.
Take the restrictions on close-in oil production for example.
They were put in place partly as a reaction to the Exxon Valdez disaster, which is STILL being cleaned up over a decade after the spill.
Oil spills tend to damage a lot more than just a few birds on the beaches. They destroy coastal property values, destroy fishing industries, destroy tourism industries in coastal areas. True economic damage from a catastrophic large oil spill can easily run into the hundreds of millions to billions when all the real economic impacts are tallied up.
Go back to class junior.
Last edited by CosmicCowboy; 03-20-2009 at 10:38 AM.
Yup. A good chunk from Venezuala too. Only a rather relatively small percentage of our oil actually comes directly from the Middle East.
As I have outlined above, we still take whatever global price there is for oil, so the specific percentages from any given source don't matter quite so much as overall consumption.
If you want to free yourself from having to worry about oil supply disruptions in the Middle East, the ONLY way to do that is to reduce oil consumption.
I don't pretend to know alot about this, but isn't this example even slightly analogous?
If I were buying water from SAWS, but I could drill my own well, wouldn't it make sense to do so? Even if it took me some time to get the return on my investment?
Not sure exactly what your point is here. I assume you are attempting to be a smart ass, but your actual point isn't made well enough for me to determine exactly what you are implying, and yes, I understand you are attempting sarcasm.
Using the principles of supply/demand economics, please explain how your statement in any way disproves anything I have outlined.
Otherwise, your statement is little more than a non-sequitur.
If you can't back up your statement with those principles, and using specific economics terms, then you are simply proving *MY* point that people like you make noises about being for "free markets" but don't really know much about actual economics.
As I said, step up or shut up. Sarcasm may make you feel better about looking like an idiot, but it won't change the fact that you still look like an idiot.
That analogy doesn't really work though.
It would work if the US government actually owned and produced all the oil, which it doesn't.
A better analogy might be if you were to try and sell that water to other people. If the costs of your water on a per gallon basis were higher than what SAWS could sell it for, you would NEVER get a return on that, because no one would really buy from you if they could at all get SAWS water cheaper.
If you are talking about your own personal usage, you might get some satisfaction (the economic term is "utility") from not having to buy water from SAWS, even if your well water cost more than SAWS water. The difference in your cost from SAWS cost is how that utility would be measured in economic terms.
Sure you would eventually recoup your investment in not having to have had to buy water from SAWS, depending on how expensive SAWS water is.
You could also have simply purchased cheaper SAWS water and invested the difference in something else that paid money, like bonds.
You must be doing your degree at one of those on line paper diploma mills.
I quote you again:
Your economic justification for prohibiting off shore drilling is that it would increase the chances of oil tanker spills which cost a lot to clean up.I tend to evaluate environmantal laws from a truly economic perspective, and have found that, more often than many on the right realize, those laws tend to have rather beneficial effects on the economy that are completely overlooked.
Take the restrictions on close-in oil production for example.
They were put in place partly as a reaction to the Exxon Valdez disaster, which is STILL being cleaned up over a decade after the spill.
What i guess you don't know is that oil and natural gas produced offshore is not transported by tanker. It is transported by pipeline.
It is imported oil that is transported by tanker.
Your "economic" argument made absolutely no sense and in fact was based on erroneous facts and circular logic.
RG, you should just start a website dedicated to your rants. You can have graphs, photo's and links all over the place to make your point. I mean, that's basically what you've turned this forum into.
I didn't say that the prohibition against offshore drilling was entirely rationally based only on tanker spills.
It was enacted as part of a rather emotional, gut reaction to the Exxon Valdez spill.
The specter of such spills from offshore oil drilling, where you have dozens/hundreds of platforms vulnerable to hurricaines (as we saw rather clearly in the Katrian/Rita storms) allowed such bans to be lumped in. This is not altogether unreasonable in my opinion though.
More directly most single hulled tankers were prohibited from US ports, if memory serves, as well as from most European ports. That is a bit more of a rational response.
Aside from this, there are still ships involved in transport of deep water drilling to my understanding.
Perhaps I shoud. Most of these arguments are done to death anyways. One good bit copied and pasted would do for most things.
Further, I never attempted to use such reasoning as an economic basis for any such ban. If you think that you are mistaken, and if you claim that is what I think/imply then you are distorting what I think/believe.
I merely noted that the true costs of any legislation should be considered.
The ONLY economic point I have made here is that even if we drilled all the oil we needed, we would still be vulnerable to outside disruption, in a true free-market system.
Can you dispute that statement?
And the fact that there were no spills from Katrina and Rita is a good argument that offshore drilling and production can be done safely.The specter of such spills from offshore oil drilling, where you have dozens/hundreds of platforms vulnerable to hurricaines (as we saw rather clearly in the Katrian/Rita storms) allowed such bans to be lumped in. This is not altogether unreasonable in my opinion though.
Besides, the drilling bans are on the East and West coasts. Where is the logic in allowing drilling in the most hurricane prone US coastline, and denying drilling off coastlines that NEVER get hurricanes?
OV called out RG; he basically egged on the rant and deserves your annoyance too. I laughed upstream because I saw the rant coming, and suspected OV would have no substantive reply to it.
Isn't there an ignore function on the user CP? Why do you prefer to hang around and , when you can just ignore the poster?
BTW, only an idiot would dispute that oil is a commodity and we live in a global economy where commodity prices are set by global supply and demand mechanisms.
The point you seem to be missing is that if the USA allows 100% of supply to be determined by countries that do not have our best interests at heart then this is not only economically foolish but politically and strategically foolish.
Wasn't there an accusation that China was stockpiling reserves to create a shortage and drive up prices?
That bit has been debunked, and it does not surprise me that you would believe something like that. I think the proper term is "cool-aid".
It is provably false.
We can start here:
http://www.katrinadestruction.com/im...gy+facilities/
Or even better:
http://blog.skytruth.org/2007/12/hur...exico-oil.html
Here is an interesting summary with a quote from the "U.S. Minerals Management Service [who] commissioned a study of this very issue,"
http://www.outsidethebeltway.com/arc...-from-katrina/
I think it is fairly safe to assume that increased offshore drilling MUST equal increased risk of spills of all kinds. Is this a fair statement?
(note I didn't ask whether they are likely or not, so don't try that dodge)
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