T Nation

Oil Prices Falling - Still Drill?


#1

With oil prices steadily falling, I'm curious if the proponents of increased domestic drilling are still as steadfast on this issue.


#2

Maybe because we won't see returns from drilling for years, and they are thinking about the future.

Edit: plus I heard opec was about to start squeezing the market again.


#3

Yes.

It doesn't make any sense for Cuba to drill off the Fla. coast and we can't.

Well to some it does but not most.


#4

Why shouldn't oil prices be lower? It will ultimately be the producers who decide when drilling is or is not profitable. Consumers will help relay this information to them by consuming or not consuming. Everyone would be better off with cheaper energy provided by more drilling but this is not to say there is no cost; for example, to the environment or development of alternatives.

Let the market decide.


#5

I've always wondered why people consider it safer to import oil on a tanker than to drill locally. It's not like tankers have never had oil spills. I'd be interested to see statistics on it though.


#6

Who's to say that if America starts increasing production, OPEC won't decrease theirs? I understand this still even more money for America, but it doesn't neccessarily translate to cheaper gas at the pumps.


#7

I like this. This might be the most common sense approach to drilling I've heard yet.


#8

I'm not saying our opinions on the matter should decide whether or not drilling increases. I'm just wondering if the main desire was for cheaper gas, or to lighten our need for foreign energy. Because this didn't really become the issue it is now until gas prices shot up.


#9

As long as we get most of our oil from assholes who hate us we are at risk of getting squeezed in danger of getting cut off. Do you really want to trust out future to the likes of Iran, Venezuela, Saudi Arabia, Oman, Jordan, UAE, Kuwait, Russia, etc. Do you want them to hold the country by the balls?

OPEC is trying to cut production to drive to drive the price up. If we are drilling our own oil we can give them the finger. When imports count less we have more control over our energy. I don't care where you are in the political spectrum, this makes sense. It's just plain fucking stupid not to get our own energy resources if we have them.


#10

Not really. Your oil would still be sold at market prices. Canada produces more oil than it can consume (we're the USA's biggest oil provider) and we still don't get it cheaper than you do. In fact, even with taxes taken out of the equation, we pay more for it than you do. (Thanks to some brain-dead unprosecutable "no price collusion" laws.)

Unless you're proposing to do like Venezuela and nationalize all your oil production. I'd rate that highly unlikely since Big Oil "owns" most of your (and our) governments.


#11

The argument over whether the oil we use is foreign produced or not is nonsensical. Why should we not get oil from wherever it is cheapest? Consumers of oil do not buy it directly from producer nations. It is bought off the world oil market at the best possible price.

It may be that US companies cannot produce oil as cheap as foreign producers can in which case it would not make any sense to produce it if it meant that those companies would expose themselves to a loss. No rational producer would even think about drilling unless he knew he could make a profit. It would be better that investors only allocate resources to produce goods that have a higher profit ratio that waste them being less productive.

One can imagine that it might be cheaper to produce oil domestically than transport it around the world which requires military protectionism to support it; but as long as domestic producers have to compete with taxpayer supported merchantilism it may not be a viable option for them.

I am not an entrepreneur so I cannot answer what is the best option other than I know having more of something is better for consumers than having less of it.


#12

And you don't know a fucking thing about oil. Sit down, shut the fuck up, and read your theory books.

Seriously - you are a fucking moron when it comes to discussing the real world.


#13

Doesn't really matter. Mother nature spills more oil into the ocean than we ever will.


#14

Yes, so "fucking moronic" that you cannot give a valid argument to refute what I say.


#15

Doesn't matter. it will reduce the price of any foreign goods relative to the dollar. Overall quality of life will improve.


#16

You have not said anything. That's why you need to shut the fuck up.

Any time there is an oil thread, I have schooled you every way someone who knows about the oil industry can school an ignorant mouthy fuck like you.

Have you ever so much as seen a pumpjack in real life?

Go read some more theory books fuckwad.


#17

In any case it still gives us more control, we are less at the mercy of OPEC. And we could by will take our oil off the market if we wish.


#18

I was going to say the same thing to you but then I remembered you neither possess the mental faculties nor a 10th grade reading ability...


#19

It was never about decreasing the price, IMO. It's about not sending money to terrorist supporting nations... and Canada. Fuck Canada <_<


#20

As long as prices float above $45 - $50, there will still be an incentive for oil companies to drill off shore. It makes some of the other technologies - like reserves in the Dakotas - a little less cost effective, though.

I think there should be incentives given to the oil companies to explore every where they can possibly poke a hole.

But - the lower the oil price, the less the politicians give a shit about opening up domestic exploration.