Oil Prices Falling - Still Drill?

[Sifu]

It makes sense to produce as much of our oil domestically as we can.

It insulates us from fluctuations in the world supply.

It improves our balance of payments so less of our money goes overseas which will strengthen our economy.

It will keep money out of te hands of people who hate us. Venezuela is in a real precarious position right now because the US is their only cash paying customer who can take unimproved oil at market prices. If we could cut off their exports to us Chavez is done.

The Venezuelans and Iranians both need oil to be at $80 a barrel to meet their budjet projections this year.

Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete.

Also once we have wells drilled we can always cap them off and have them ready in case there is a crisis.

We should also do what we can to help the Canadians and Mexicans maximize their production. That way if we do have to buy from foreign sources it will be from our neighbors.

[LIFTICVSMAXIMVS]

[quote]Sifu wrote:
It makes sense to produce as much of our oil domestically as we can. [/quote]

Only if it is profitable.

[quote]
It insulates us from fluctuations in the world supply. [/quote]

It will still be sold on a world market. If an American producer sells it too expensive oil consumers will buy it somewhere else. Everyone is beholden to the laws of supply and demand. Of course this assumes that government does not try to intervene in the market.

[quote]
It improves our balance of payments so less of our money goes overseas which will strengthen our economy. [/quote]

Our money does not go overseas. Only our debt. Why would a Chinese businessman trade dollars if he cannot spend them in his own country? Goods are traded…not cash.

[quote]
It will keep money out of te hands of people who hate us. Venezuela is in a real precarious position right now because the US is their only cash paying customer who can take unimproved oil at market prices. If we could cut off their exports to us Chavez is done. [/quote]

It hurts them as much as it hurts the consumers who rely on them as a producer nation.

[quote]
The Venezuelans and Iranians both need oil to be at $80 a barrel to meet their budjet projections this year. [/quote]

They also rely on the market and cannot fix the price.

[quote]
Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete. [/quote]
This is true though people will still prefer cheaply made and reliable foreign cars.

[quote]
Also once we have wells drilled we can always cap them off and have them ready in case there is a crisis. [/quote]

You speak as if they have already been nationalized and that the American people have any say in the matter. Consumer purse strings and wallets always have the last word.

[quote]
We should also do what we can to help the Canadians and Mexicans maximize their production. That way if we do have to buy from foreign sources it will be from our neighbors. [/quote]

Let some businessman figure that out. Again, no oil consumer is going to buy oil from a neighbor just to be neighborly if he can buy it cheaper elsewhere. He would find himself quickly out of business.

[Sifu]

[quote]LIFTICVSMAXIMVS wrote:
Sifu wrote:
It makes sense to produce as much of our oil domestically as we can.

Only if it is profitable. [/quote]

There are geopolitical considerations that go beyond profitability. Also once a field is discovered and wells are dug if it is not profitable to use them we can cap them and have them ready to go.

[quote]
It insulates us from fluctuations in the world supply.

It will still be sold on a world market. If an American producer sells it too expensive oil consumers will buy it somewhere else. Everyone is beholden to the laws of supply and demand. Of course this assumes that government does not try to intervene in the market. [/quote]

So when the supply gets cut back and the price goes up we will have our own. There will be a point where a particular supply will become profitable and we bring that online.

[quote]
It improves our balance of payments so less of our money goes overseas which will strengthen our economy.

Our money does not go overseas. Only our debt. Why would a Chinese businessman trade dollars if he cannot spend them in his own country? Goods are traded…not cash. [/quote]

We are paying mostly cash for oil. There isn’t that much barter going on. The Chinese are holding over a trillion dollars in US currency. Our money does go over seas. The type of finacial instrument used to pay for oil does not change the fact that when it is bought overseas it affects our balance of trade.

[quote]
It will keep money out of te hands of people who hate us. Venezuela is in a real precarious position right now because the US is their only cash paying customer who can take unimproved oil at market prices. If we could cut off their exports to us Chavez is done.

It hurts them as much as it hurts the consumers who rely on them as a producer nation. [/quote]

We need to do everything we can to hasten Chavez departure from office. Wrecking the economy of Venezuela will do that. Once he is gone we can normalize relations.

[quote]
The Venezuelans and Iranians both need oil to be at $80 a barrel to meet their budjet projections this year.

They also rely on the market and cannot fix the price. [/quote]

You are kidding right? The Iranians can do a lot to affect price. The tensions over their nuclear program was the reason why speculators drove oil over $140 a barrel. All they have to do is ratchet up tensions, threaten to close off the straight of Hormuz and the price goes up. [quote]

Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete.
This is true though people will still prefer cheaply made and reliable foreign cars. [/quote]

Detroit can make quality cars American like but they tend to be heavy. Look at the Mustang and the new Camaro they are almost 4000 pounds. The sixties models were 3000.

[quote]
Also once we have wells drilled we can always cap them off and have them ready in case there is a crisis.

You speak as if they have already been nationalized and that the American people have any say in the matter. Consumer purse strings and wallets always have the last word. [/quote]

The oil fields don’t have to be nationalised to do that. There are ways to encourage the oil companies to explore.

[quote]
We should also do what we can to help the Canadians and Mexicans maximize their production. That way if we do have to buy from foreign sources it will be from our neighbors.

Let some businessman figure that out. Again, no oil consumer is going to buy oil from a neighbor just to be neighborly if he can buy it cheaper elsewhere. He would find himself quickly out of business. [/quote]

There are things we can do to help the Canadians produce a lot more and cheaper. They need a heat source to extract oil from tar sands. What they are considering doing is using a nuclear reactor, we should be supportive of it.

[msd0060]

So… we wait till its $150 a barrel again and THEN start drilling to see returns in a few years from THEN?

[rainjack]

[quote]LIFTICVSMAXIMVS wrote:
Sifu wrote:
It makes sense to produce as much of our oil domestically as we can.

Only if it is profitable.

It insulates us from fluctuations in the world supply.

It will still be sold on a world market. If an American producer sells it too expensive oil consumers will buy it somewhere else. Everyone is beholden to the laws of supply and demand. Of course this assumes that government does not try to intervene in the market.

It improves our balance of payments so less of our money goes overseas which will strengthen our economy.

Our money does not go overseas. Only our debt. Why would a Chinese businessman trade dollars if he cannot spend them in his own country? Goods are traded…not cash.

It will keep money out of te hands of people who hate us. Venezuela is in a real precarious position right now because the US is their only cash paying customer who can take unimproved oil at market prices. If we could cut off their exports to us Chavez is done.

It hurts them as much as it hurts the consumers who rely on them as a producer nation.

The Venezuelans and Iranians both need oil to be at $80 a barrel to meet their budjet projections this year.

They also rely on the market and cannot fix the price.

Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete.
This is true though people will still prefer cheaply made and reliable foreign cars.

Also once we have wells drilled we can always cap them off and have them ready in case there is a crisis.

You speak as if they have already been nationalized and that the American people have any say in the matter. Consumer purse strings and wallets always have the last word.

We should also do what we can to help the Canadians and Mexicans maximize their production. That way if we do have to buy from foreign sources it will be from our neighbors.

Let some businessman figure that out. Again, no oil consumer is going to buy oil from a neighbor just to be neighborly if he can buy it cheaper elsewhere. He would find himself quickly out of business.[/quote]

Every single time you post you get more stupid.

Dollars are exchanged for oil - not goods. Any fucking idiot would know that the oil companies PAY for oil. They are a little beyond the barter system, you stupid fucknut.

GO back to reading your theory books. You have proved time and again you don’t have a fucking clue about the oil business.

[rainjack]

[quote]msd0060 wrote:
So… we wait till its $150 a barrel again and THEN start drilling to see returns in a few years from THEN?[/quote]

No. We should give incentives to the oil companies for developing domestic and offshore oil fields. They should be the same types of incentives given for alternative energy development.

It will create jobs and break OPEC.

Oil is still way high enough to make domestic exploration cost effective.

[JamFly]

[quote]rainjack wrote:
Beowolf wrote:
BabyBuster wrote:
With oil prices steadily falling, I’m curious if the proponents of increased domestic drilling are still as steadfast on this issue.

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

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. [/quote]

I have to say I recall RJ calling the current price drop off of a barrel to between $60-$70 pretty spot on (you cunt) where I and others expected it to rebound to around the $90 mark, whilst I still believe this probable (although I have a vested interest so perhaps I am just hoping this happens).

I would make a couple of points here, OPEC and the rest of the world need a stable and fair oil price (what is fair?) and they will cut or increase demands to achieve this. I believe stability in the market to be a good thing especially considering the roller coaster financial markets at the moment.

The other point I would make and have made before is that governement needs to make provision for protecting the government needs to start hedging against fluctuation oil prices by retaining a stake in all new development licenses it grants.

[BabyBuster]

I don’t understand how this will effect OPEC. If America injects more supply, they’ll lessen theirs. I appreciate American companies will be making more money, but that’s not going to trickle down to me.

There is no way we will ever produce enough to affect the market in a significant way. Even if we could, if oil shot up again, why would American companies sell it at any less than market value?

[BabyBuster]

Don’t get me wrong, I like money staying in the hands of American companies. But I don’t kid myself into thinking it will trickle down to me.

[rainjack]

[quote]BabyBuster wrote:
I don’t understand how this will effect OPEC. If America injects more supply, they’ll lessen theirs. I appreciate American companies will be making more money, but that’s not going to trickle down to me.

There is no way we will ever produce enough to affect the market in a significant way. Even if we could, if oil shot up again, why would American companies sell it at any less than market value?[/quote]

If we increase our production - we are decreasing our need for foreign oil.

We import only 13% of our oil from the ME. If we replaced that oil with our own, we would no longer be giving money to countries that hate us. Our 13% could break OPEC.

Incentivise domestic exploration, open up every possible nook and cranny for drilling to include offshore, create n infrastructure for getting all new domestic oil to the refineries, and we create hundreds of thousands of jobs - even if it is only a short term increase (2-3 years).

If the world price crashes - we buy the shit out of it. When it goes up, we use our own oil.

My main reasons for wanting this is to break OPEC, end our dependence on ME oil, and actually develop the reserves we have inside our own borders.

[BabyBuster]

I can understand what you’re saying, and your reasons. I don’t think that we can just replace the 13% with our oil, unless we prevented American companies from selling oil on a world market until after we’d reserved what we need domestically.

Otherwise, we’d just sell it on the world market to whoever wants in, and end up buying from who ever has some to sell. And some of it would likely still come from OPEC.

Fundamentally though I agree with you that an ideal situation would be for us to stop packaging money in a bow and ribbon and sending it to people that hate us.

[rainjack]

[quote]BabyBuster wrote:
I can understand what you’re saying, and your reasons. I don’t think that we can just replace the 13% with our oil, unless we prevented American companies from selling oil on a world market until after we’d reserved what we need domestically.

Otherwise, we’d just sell it on the world market to whoever wants in, and end up buying from who ever has some to sell. And some of it would likely still come from OPEC.

Fundamentally though I agree with you that an ideal situation would be for us to stop packaging money in a bow and ribbon and sending it to people that hate us.[/quote]

Why would the worlds largest consumer of oil want to float their own oil out on the open market, if domestic oil companies are going to be buying oil at the world price?

Do you have any idea how much cheaper it is to run crude through a pipeline than putting it on a ship and hauling halfway across the globe? That savings alone will more than pay for the increase in production costs at the well head.

Nothing is stopping american oil producers from selling their oil on the international market, but when the US is the biggest oil guzzler on the planet, odds are it would wind up here in the US anyhow.

[Sifu]

[quote]msd0060 wrote:
So… we wait till its $150 a barrel again and THEN start drilling to see returns in a few years from THEN?[/quote]

Besides something that gets lost in the debate is there is a science to drilling. They do extensive geological surveys before they drill any holes, because it costs money to drill. This is why the already leased oil fields the Democrats keep whining about haven’t been drilled yet, they’re still doing the preliminary planning.

This is a long term industry and we aren’t even doing the time consuming preliminary planning that needs to take place before drilling, so we can know where promising areas are.

[JamFly]

[quote]rainjack wrote:
"Why would the worlds largest consumer of oil want to float their own oil out on the open market, if domestic oil companies are going to be buying oil at the world price?

Do you have any idea how much cheaper it is to run crude through a pipeline than putting it on a ship and hauling halfway across the globe? That savings alone will more than pay for the increase in production costs at the well head.

Nothing is stopping american oil producers from selling their oil on the international market, but when the US is the biggest oil guzzler on the planet, odds are it would wind up here in the US anyhow." [/quote]

Currently there is no US state owned oil company as you know, so even thought the US consumes alot of oil it’s always going to be paying world market prices for it unless the government changes it’s strategy.

Yes it is generally preferable/cheaper to use existing infrastructure/pipelines to export oil, however when none exists as is the case off the atlantic and pacific coast then you have to put them in and the cost for this is phenomenal, it is a much more cost effective solution to put in place a floating storage and offloading system for tankers.

[rainjack]

[quote]JamFly wrote:
rainjack wrote:
"Why would the worlds largest consumer of oil want to float their own oil out on the open market, if domestic oil companies are going to be buying oil at the world price?

Do you have any idea how much cheaper it is to run crude through a pipeline than putting it on a ship and hauling halfway across the globe? That savings alone will more than pay for the increase in production costs at the well head.

Nothing is stopping american oil producers from selling their oil on the international market, but when the US is the biggest oil guzzler on the planet, odds are it would wind up here in the US anyhow."

Currently there is no US state owned oil company as you know, so even thought the US consumes alot of oil it’s always going to be paying world market prices for it unless the government changes it’s strategy.

Yes it is generally preferable/cheaper to use existing infrastructure/pipelines to export oil, however when none exists as is the case off the atlantic and pacific coast then you have to put them in and the cost for this is phenomenal, it is a much more cost effective solution to put in place a floating storage and offloading system for tankers.[/quote]

Who is arguing against allowing the US producers to sell their oil on the world market?

What relevance does it have wrt increasing our own domestic oil production (obviously assuming we don’t go back to $8/barrel)?

[LIFTICVSMAXIMVS]

[quote]BabyBuster wrote:
Don’t get me wrong, I like money staying in the hands of American companies. But I don’t kid myself into thinking it will trickle down to me.[/quote]

Money does not go overseas. It has to stay here because it cannot be spent overseas. This means that fewer export goods will leave the country if we are not trading. This hurts American producers as much as it hurts consumers of oil, for example.

People who argue to not trade with certain countries are arguing for isolationism.

[LIFTICVSMAXIMVS]

[quote]rainjack wrote:
Who is arguing against allowing the US producers to sell their oil on the world market?

What relevance does it have wrt increasing our own domestic oil production (obviously assuming we don’t go back to $8/barrel)?
[/quote]
Any oil that is produced here DOES NOT belong to us. It can be sold anywhere a producer finds the most profit.

[Tiribulus]

[quote]Sifu wrote:
<<< Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete. >>>[/quote]

I worked for 4 years in Ford’s product development center (PDC to the natives) and have witnessed first hand the state of complete bureaucratic disarray their engineering operation is in. People I know at GM say the same goes there.

Detroit doesn’t have it’s shit together period. The big 3 are destroying themselves from the inside out just like this country is and with basically the same formula.

It would make most people’s hair stand on end if they had any idea what is involved in producing that car sitting in their driveway.

Don’t pass up an opportunity to see the inside of a body design studio if you get a chance though. That shit is really cool.

[rainjack]

[quote]LIFTICVSMAXIMVS wrote:
BabyBuster wrote:
Don’t get me wrong, I like money staying in the hands of American companies. But I don’t kid myself into thinking it will trickle down to me.

Money does not go overseas. It has to stay here because it cannot be spent overseas. This means that fewer export goods will leave the country if we are not trading. This hurts American producers as much as it hurts consumers of oil, for example.

People who argue to not trade with certain countries are arguing for isolationism.[/quote]

I know for a fact money will go overseas, I do it all the time.

Go back to your books and your theories. You have no knowledge of the real world.

[dhickey]

[quote]LIFTICVSMAXIMVS wrote:
Sifu wrote:
It makes sense to produce as much of our oil domestically as we can.

Only if it is profitable.

It insulates us from fluctuations in the world supply.

It will still be sold on a world market. If an American producer sells it too expensive oil consumers will buy it somewhere else. Everyone is beholden to the laws of supply and demand. Of course this assumes that government does not try to intervene in the market.

It improves our balance of payments so less of our money goes overseas which will strengthen our economy.

Our money does not go overseas. Only our debt. Why would a Chinese businessman trade dollars if he cannot spend them in his own country? Goods are traded…not cash.

It will keep money out of te hands of people who hate us. Venezuela is in a real precarious position right now because the US is their only cash paying customer who can take unimproved oil at market prices. If we could cut off their exports to us Chavez is done.

It hurts them as much as it hurts the consumers who rely on them as a producer nation.

The Venezuelans and Iranians both need oil to be at $80 a barrel to meet their budjet projections this year.

They also rely on the market and cannot fix the price.

Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete.
This is true though people will still prefer cheaply made and reliable foreign cars.

Also once we have wells drilled we can always cap them off and have them ready in case there is a crisis.

You speak as if they have already been nationalized and that the American people have any say in the matter. Consumer purse strings and wallets always have the last word.

We should also do what we can to help the Canadians and Mexicans maximize their production. That way if we do have to buy from foreign sources it will be from our neighbors.

Let some businessman figure that out. Again, no oil consumer is going to buy oil from a neighbor just to be neighborly if he can buy it cheaper elsewhere. He would find himself quickly out of business.[/quote]

What exactly is yor point here? I know that you know enough about economics to know that us extracting oil here will have possitive effects on exchange rates. You seem to posses common sense as well, so I assume that you also agree that it would possitive impacts on domestic wealth in general.