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  #1  
Old 03-01-2012, 09:23 PM
cutman74 cutman74 is offline
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U.S. Oil exports

First of all I am a long time lurker on this message board. Never posted before. Please excuse me if I'm a little bit awkward. I'm not sure where to put this, seeing that I'm somewhat angry about it, it might belong in the pit, but I'll start here. This morning on my way to work, I heard the radio mention that we exported more "oil products" than we imported ( for the first time since 1949.) This leads me to believe that the "drill baby drill" crowd is sorely misguided, if not outright disengenuous. It seems to me that the companies that profit from oil production are manipulating the price, similar to the DeBeers with diamonds. I have not figured out how to post a link, but the article I read was on Bloomberg.com. All I'm saying is that the way i read it, the rising costs of fuel in this country are not due to demand, but greed.

You people seem to be some of the most educated and reasonable people on the web(if not pleasantly biased) , and I was just curious if I was overreacting to this particular bit of news, or if any of youall had heard it and how you feel about it

Last edited by cutman74; 03-01-2012 at 09:28 PM..
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  #2  
Old 03-01-2012, 09:28 PM
Linden Arden Linden Arden is offline
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We exported 439,000 barrels of petroleum product per day in 2011.

http://www.bloomberg.com/news/2012-0...r-in-2011.html

ETA - that is NET, by the way.

Last edited by Linden Arden; 03-01-2012 at 09:31 PM..
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  #3  
Old 03-01-2012, 09:35 PM
XT XT is offline
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Quote:
This leads me to believe that the "drill baby drill" crowd is sorely misguided, if not outright disengenuous.
Well, it might be, but not for the reasons you seem to think. You are confusing oil based products with oil. We import far more raw petroleum than we export, but we have a huge investment in refinery infrastructure, which not many countries do, so we are able to export more refined product than we import (afaik, we don't actually import much refined product, except in very specific circumstances, though I might be wrong about that).

Basically, the 'drill baby drill' thingy is wrong because no matter how much we drill we will still have to import raw petroleum, at least until we switch to some other personal transport fuel or technology. The 'drill baby drill' crowd is right that it's still worth while to do, because it injects capital, taxes and jobs into the US that wouldn't be there if we didn't drill. Whether that balances out to being a positive is debatable.

Quote:
You people seem to be some of the most educated and reasonable people on the web(if not pleasantly biased) , and I was just curious if I was overreacting to this particular bit of news, or if any of youall had heard it and how you feel about it
Flattery will get you everywhere, though I'm not one of the educated OR reasonable 'dopers, so MMV.

-XT
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Old 03-01-2012, 09:57 PM
Askance Askance is offline
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Originally Posted by xtisme View Post
Basically, the 'drill baby drill' thingy is wrong because no matter how much we drill we will still have to import raw petroleum, at least until we switch to some other personal transport fuel or technology. The 'drill baby drill' crowd is right that it's still worth while to do, because it injects capital, taxes and jobs into the US that wouldn't be there if we didn't drill. Whether that balances out to being a positive is debatable.
More than that: if you can import crude for less than it costs you to drill it you are deranged to drill. What's more, you are then preserving what crude you have in the ground for later, when it will be more valuable.
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Old 03-01-2012, 10:05 PM
XT XT is offline
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Originally Posted by Askance
More than that: if you can import crude for less than it costs you to drill it you are deranged to drill.
The thing is, oil is a global commodity. So, I could drill oil and sell it on the world market (and make lots of that money stuff, plus provide folks with jobs and pay taxes), while you could import crude for less, perhaps, and make your own money. So, it's not deranged to drill for oil.

It's not an either or proposition just because of the nature of the oil commodities market. Well, or any global commodities market for that matter.

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What's more, you are then preserving what crude you have in the ground for later, when it will be more valuable.
Maybe. It depends on the future. Maybe oil will keep going up, in which case you could trade less capital injected into our system today, less jobs and less taxes for some future benefit. If the oil market keeps going up. Commodities markets can crash though, and there is nothing to say that 5 years from now, or 10 (or whatever), a breakthrough in technology might not render oil moot by supplanting it with some new technology. It's unclear where the price point is going to be for some of the alternative technologies waiting in the wings right now, and assuming a threshold is reached, it might render that oil in the ground worthless...or not worth the costs of getting it out.

-XT
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Old 03-01-2012, 11:01 PM
cutman74 cutman74 is offline
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Thank you for replying, although I guess that's what is done. (otherwise this would be boring). Xtimse, that is why I used quotes when I used "Oil Products". Otherwise, I would have just sail Oil. I understand the jobs created by domestic drilling would be beneficial, but it still seems that the "demand" for for "oil products" has been exaggerated, causing inflated value for said oil. This is my issue.
I hope I didn't miss the edit window. Hockey is on. I'm out for the evening. GO BLUES!

Last edited by cutman74; 03-01-2012 at 11:03 PM..
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  #7  
Old 03-01-2012, 11:29 PM
Simplicio Simplicio is online now
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In the OP's defense, I think this is the third thread we've had with the same misunderstanding.

Apparently the journalists of the world need to stress the difference between refined products and crude oil a little more clearly.
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Old 03-01-2012, 11:38 PM
Koxinga Koxinga is offline
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Last time I checked, Saudi Arabia was a net importer for a substantial portion of its gasoline consumption (just to highlight the difference between crude oil and refined product).

Last edited by Koxinga; 03-01-2012 at 11:39 PM..
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  #9  
Old 03-01-2012, 11:51 PM
dzero dzero is offline
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There are a bunch of things going on here. First, as already mentioned, we have a lot of refineries. Since they are most profitable when run at capacity, it makes more economic sense to produce a surplus of refined products and sell that surplus overseas.

But beyond that, we are still a major oil producer, we just consume most of what we produce. Add to that the fact that we buy a lot of what was going to be carried by the Keystone pipeline - Canadian oil produced from tar sands. As a result, WTI (west texas intermediate crude) sells for about $10/barrel less than Brent crude. This makes it especially profitable for refiners to sell their surplus to whomever wants to buy it - domestic or foreign.

Also there is the technology factor. This plays a huge but largely unrecognized role. A well that 20 years ago would have been tapped out after only 30 or 40% of its reserves had been pumped, can now produce 60 or 70% (my figures might be a little off). That's because the technology for getting at the oil still in the ground keeps improving - from steam injection to more exotic techniques.

In addition to that, we may well become self sufficient regarding energy production without any drilling. Fracking can also be used to get at oil trapped in shale deposits - it's not just for nat. gas. However this is a trend that has just barely gotten underway but is being aggressively developed. However this part is going a bit off topic.
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Old 03-02-2012, 10:56 AM
XT XT is offline
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Quote:
Originally Posted by cutman74
Xtimse, that is why I used quotes when I used "Oil Products". Otherwise, I would have just sail Oil.
It's talking about two different things. Oil imports and refined exports. The folks who want to drill want to do so in an attempt to balance the equation between US oil production and US oil importation. The fact that we export some refined product really isn't a big factor in that. We export refined product because we have the extra refining capability.

Quote:
I understand the jobs created by domestic drilling would be beneficial, but it still seems that the "demand" for for "oil products" has been exaggerated, causing inflated value for said oil.
We (the aggregate US/domestic oil producing companies) produce something like 5-6 million barrels per day, of which we export 1 million barrels (these numbers aren't exactly what you'd call 'precise'...just ball parks). We import an additional 10-11 million barrels per day.

Demand in the US has been pretty flat for the last (IIRC) 10 years, and has actually declined in the US due in part to the nasty recession we've been in. However, demand outside of the US has pretty much exploded, which drives up prices for everyone. This isn't some fix that Big Oil or Big Refiner is playing on the public to squeeze more profits out of them...and the Drill Baby Drill folks aren't creating some sort of illusion of demand where one doesn't exist. They aren't inflating the value of oil, because the value of oil is set on the world commodities market, and the US isn't the only buyer of oil...nor are we the only one that sets demand. Nor is it just demand that impacts the price of oil on the world market...certainly not just demand in the US.

The problem with DbD isn't the underlying logic of wanting to explore and exploit domestic resources in an attempt to re-balance the trade equation....that makes perfect sense, though I'm hard pressed to see why it would drop the price at the pump. The flaw, IMHO (and grain of salt, since I'm no more an expert on the commodities market than I am on the oil industry, or economics for that matter) is that there simply is no way to ramp up and sustain over double the current amount of domestic oil production.

-XT
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  #11  
Old 03-02-2012, 12:14 PM
puddleglum puddleglum is offline
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Blaming rising prices on greed is like blaming plane crashes on gravity. Greed was not invented in the last couple of years, everyone in the world is trying to make as much money as they can and the reason prices move is not greed but changes in supply and demand. The point some people miss about Drill Baby Drill is that while it would only make a small difference in the price of oil, we use so much that even small differences in price can add up to huge amounts of money.
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Old 03-02-2012, 12:24 PM
John Mace John Mace is offline
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Quote:
Originally Posted by Simplicio View Post
In the OP's defense, I think this is the third thread we've had with the same misunderstanding.

Apparently the journalists of the world need to stress the difference between refined products and crude oil a little more clearly.
Yes, the articles are generally too crude in their description of the situation.
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  #13  
Old 03-02-2012, 02:56 PM
LonghornDave LonghornDave is offline
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This sort of information is very easily found in the EIA website.

Last week we had imports of 9,187,000 barrels per day of crude oil and 1,692,000 barrels of other petroleum products such as gasoline, kerosene, propane, etc.

We had exports of 37,000 barrels of crude oil and 3,119,000 of products.

Therefore, we have a net import of 9,150,000 of crude oil and a net export of 1,427,000 of products.

The OP is clearly not thinking this through though. This is a good thing that we export more products than we import.
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  #14  
Old 03-02-2012, 03:16 PM
LonghornDave LonghornDave is offline
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Originally Posted by cutman74 View Post
It seems to me that the companies that profit from oil production are manipulating the price, similar to the DeBeers with diamonds.
Not really. If you are considering the companies that profit from oil production entities like Exxon, Shell, Chevron, Total, Conoco, BP etc, then they are not manipulating prices. If you are considering the companies that profit from oil production entities like Aramco, PDVSA, NIOC, then yes they are manipulating oil prices. They do this explicitly and out in the open, and to varying degrees of success. They also usually produce more than they say they will limit themselves to (cheat on quotas they set for themselves), which should result in lower prices, not higher. The biggest mover of oil prices would be Aramco, and they coordinate a lot of their actions with the U.S. government.
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