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 06/27/2008 12:42:15 PM · #126
The short term solution is conservation. That leads to savings immediately. We just don't like doing it because we are used to our ultracomfy ways.
 06/27/2008 12:48:40 PM · #127
Originally posted by DrAchoo:
The short term solution is conservation. That leads to savings immediately. We just don't like doing it because we are used to our ultracomfy ways.

I agree with you 100% on your statement!
06/27/2008 02:05:14 PM · #128
Originally posted by signal2noise:
Originally posted by Spazmo99:
Drilling for domestic oil, offshore, in ANWR or otherwise is not a short term solution. People seem to have this idea that it's simply a matter of a few weeks to set up an oil rig, anywhere, drill down and start sucking out oil. The reality is that if the oil companies were given the green light today it would be a decade or more before that oil would be gasoline for your car. Even then, the volume of oil produced by tapping into those areas is, by most reliable accounts, hardly enough to make even the smallest dent in the global market.


7-10 years from discovery to production is just about right, so it is not a short-term solution. You are also correct about making a dent in the global market, but it would make significant changes in US supply, which would then have ramifications to OPEC. I have no doubt that most, if not all of discoveries in OCS and ANWR would be provisioned to remain in the US market.

But still, we're going to need energy from every source we can develop, including fossils, unconventionals and renewables.


OK, why do you think that the oil produced by global oil companies like Shell, Exxon-Mobil, BP etc. by drilling offshore or in ANWR would be sold in the US for less than it would sell globally or would somehow not be placed on the global market? If the oil company can get $100/barrel on the global market, why do you think they would sell it to the US for $50? The oil companies will sell their oil at the highest possible price. To think that the US market is not a part of the global market or that somehow the US can segregate its oil market is naive.

I'm not saying that such things should or shouldn't be done, but to believe that such a course will lead to US independence from "foreign" oil is folly.
 06/27/2008 02:46:22 PM · #129
Originally posted by Spazmo99:
I'm not saying that such things should or shouldn't be done, but to believe that such a course will lead to US independence from "foreign" oil is folly.


Not completely true. The theory would be that political instability would be less of a factor in the global market and thus prices would be lower. If the middle east or nigeria or other politically unstable sources of oil represent a smaller overall percent of the global supply then their political factors will affect the price of oil less. OPEC has also played supply games in the past by cutting production. They aren't currently doing this, but prices would be less sensitive to any single cartel.

EDIT: The real question in my mind would be whether the production from ANWR would actually represent enough to make a difference in the above matters. I do not believe it is large enough to do so.

Message edited by author 2008-06-27 14:47:55.
 06/27/2008 02:50:12 PM · #130
Originally posted by Spazmo99:
... but to believe that such a course will lead to US independence from "foreign" oil is folly.


Please correct me if I am wrong, but I was under the impression that the vast majority of fuel products consumed in the USA was produced in North America.

Ray
 06/27/2008 02:58:51 PM · #131
Originally posted by Spazmo99:
OK, why do you think that the oil produced by global oil companies like Shell, Exxon-Mobil, BP etc. by drilling offshore or in ANWR would be sold in the US for less than it would sell globally or would somehow not be placed on the global market? If the oil company can get $100/barrel on the global market, why do you think they would sell it to the US for $50? The oil companies will sell their oil at the highest possible price. To think that the US market is not a part of the global market or that somehow the US can segregate its oil market is naive.


I respectfully disagree. Since both ANWR and the "U.S. continental shelf" are owned by the U.S. Government, the U.S. Government can ( and should ) dictate the terms of any leases granted to the companies that would drill and extract crude oil and/or natural gas from those areas. If the conditions of the leases require that the leaseholders sell ONLY to domestic refineries, and prohibit the resale of the crude oil or any of its derived fuels to non-domestic markets, then the price per barrel within the U.S. could and would be lower than the price per barrel on the international market.
 06/27/2008 03:00:46 PM · #132
Originally posted by RayEthier:
Originally posted by Spazmo99:
... but to believe that such a course will lead to US independence from "foreign" oil is folly.


Please correct me if I am wrong, but I was under the impression that the vast majority of fuel products consumed in the USA was produced in North America.

Ray


Wrong. I could find 2004 and according to the World Factbook the US imported 13 million barrels a day in the face of using about 19 million barrels a day. That represents 68% being imported.
 06/27/2008 03:07:07 PM · #133
Here are some government stats on this topic. Canada and Mexico combined currently account for about 35% of US crude oil imports if I'm reading this right.

ETA: I guess it's actually about 35% of the top 89%.

Originally posted by DrAchoo:
Originally posted by RayEthier:
Originally posted by Spazmo99:
... but to believe that such a course will lead to US independence from "foreign" oil is folly.


Please correct me if I am wrong, but I was under the impression that the vast majority of fuel products consumed in the USA was produced in North America.

Ray


Wrong. I could find 2004 and according to the World Factbook the US imported 13 million barrels a day in the face of using about 19 million barrels a day. That represents 68% being imported.


Message edited by author 2008-06-27 15:08:20.
 06/27/2008 03:23:31 PM · #134
Originally posted by eqsite:
Here are some government stats on this topic. Canada and Mexico combined currently account for about 35% of US crude oil imports if I'm reading this right.


Ooh good call. I neglected Mexico and Canada. If my calculations are correct then, North America accounts for about 33% of imports and the US accounts itself for 33% of total. Let's see, carry the one, drop the remainder...I come up with about 55% then coming from North America in total.
 06/28/2008 07:43:00 PM · #135
Originally posted by RonB:
Originally posted by Spazmo99:
OK, why do you think that the oil produced by global oil companies like Shell, Exxon-Mobil, BP etc. by drilling offshore or in ANWR would be sold in the US for less than it would sell globally or would somehow not be placed on the global market? If the oil company can get $100/barrel on the global market, why do you think they would sell it to the US for $50? The oil companies will sell their oil at the highest possible price. To think that the US market is not a part of the global market or that somehow the US can segregate its oil market is naive.


I respectfully disagree. Since both ANWR and the "U.S. continental shelf" are owned by the U.S. Government, the U.S. Government can ( and should ) dictate the terms of any leases granted to the companies that would drill and extract crude oil and/or natural gas from those areas. If the conditions of the leases require that the leaseholders sell ONLY to domestic refineries, and prohibit the resale of the crude oil or any of its derived fuels to non-domestic markets, then the price per barrel within the U.S. could and would be lower than the price per barrel on the international market.


So, if the US government dictates terms that eliminate or significantly reduce the profitability of such risky endeavors, why would the oil companies pursue them in light of such restrictions? Why wouldn't they simply go elsewhere to explore for oil? Oil that they could sell on the global market for full price, perhaps even from the same reserves that the US would place restrictions on.

Also, such trade restrictions, assuming they're feasible and legal, represent exactly the same kind of lopsided trade restrictions that the US is so quick to condemn when they come from trade partners such as China.

Message edited by author 2008-06-29 04:18:05.
 06/30/2008 03:53:44 PM · #136
Originally posted by Spazmo99:
So, if the US government dictates terms that eliminate or significantly reduce the profitability of such risky endeavors, why would the oil companies pursue them in light of such restrictions?

If the dictated terms DID eliminate or significantly reduce the profitability of such endeavors, then I don't believe that the oil companies WOULD pursue them. But what makes you think that the government would dictate such restrictions?

For example: If you were currently running a platinum mining operation in Africa that cost you $1,800 to produce one ounce of platinum, and the global market price was $2,000 an ounce, then you would be making a profit of $200 per ounce ( a 11.1% profit margin ).
Now suppose that you could obtain a lease on a government-owned Montana tract from which you could produce one ounce of platinum at a cost of $1,400 INCLUDING the lease fees, but were bound by the lease to ONLY sell it domestically.
Well, it's not difficult to see that you could sell the platinum for just $1,600 an ounce and make the same amount of profit dollar-wise that you were making before, while actually increasing your profit margin from 11.1% to 14.3%
AND SIMULTANEOUSLY, you would be lowering the price to domestic consumers by $400 an ounce - that's a 20% reduction.

So, why would you want to continue importing platinum from Africa for sale to the global market?
 07/01/2008 09:03:16 PM · #137
Originally posted by RonB:
Originally posted by Spazmo99:
So, if the US government dictates terms that eliminate or significantly reduce the profitability of such risky endeavors, why would the oil companies pursue them in light of such restrictions?

If the dictated terms DID eliminate or significantly reduce the profitability of such endeavors, then I don't believe that the oil companies WOULD pursue them. But what makes you think that the government would dictate such restrictions?

For example: If you were currently running a platinum mining operation in Africa that cost you $1,800 to produce one ounce of platinum, and the global market price was $2,000 an ounce, then you would be making a profit of $200 per ounce ( a 11.1% profit margin ).
Now suppose that you could obtain a lease on a government-owned Montana tract from which you could produce one ounce of platinum at a cost of $1,400 INCLUDING the lease fees, but were bound by the lease to ONLY sell it domestically.
Well, it's not difficult to see that you could sell the platinum for just $1,600 an ounce and make the same amount of profit dollar-wise that you were making before, while actually increasing your profit margin from 11.1% to 14.3%
AND SIMULTANEOUSLY, you would be lowering the price to domestic consumers by $400 an ounce - that's a 20% reduction.

So, why would you want to continue importing platinum from Africa for sale to the global market?


I don't give a crap about platinum.

Is this thread about platinum or other precious metals? No.

Please stop tossing out your trademark red herrings and stick to the subject. Next thing you'll be arguing that Billy Bob's Stop 'n Shop out by the interstate is a major player in the international beef jerky market
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