I was trying to decide which forum to place this thread in. I decided on great debates, since it involves the economy, the environment, and politics. But I am still a bit uncertain. So if it seems it should be moved, by all means, place it where you think it should go.
I have to admit to a very limited knowledge on the subject, and would love to become more informed. So, at the risk of sounding like a total idiot, here goes.
If we are suffering from a lack of production of oil here in the US, why in the world do we still sell to other nations? It seems to me, with my simplifed economic knowledge, that if we didnt sell what we have, we would have more for us, thus making things perhaps a bit easier for the folks in California. So tell me folks, what am I missing?
Well, more people know more about this than me, but I will take a stab, so here goes…
Its a free world and the producers can sell to pretty much whoever they want. That being said, as far as I know, the US doesn’t actually sell that much oil (on the global scale) as you are by far an oil importer, the largest in the world.
I don’t have a globe handy, but Alaska may very well be comparably distanced between, say, California and Japan. If Japan wanted to buy oil from us at, say $25 a barrel, when we could get the same amount from Mexico or Venezuela at $24.50, that would be ok with me.
My understanding is that oil drilled in different areas has different properties (eg sulphur content). Some international trade may therefore be mutually beneficial, depending on the requirements at different refineries.
California’s problem isn’t a lack of oil, it’s wildly fluctuating market conditions following a badly handled deregulation of the power market for a state that can’t generate enough electricity on its own.
Okay…I know we do import more than we export. Does anyone know how much we do export? And is it cheaper for us to sell and then buy back? Generally that just shouldnt be the case, but global economics are not my forte…
I don’t have the data for crude oil, but I can provide 1995 data on “Petroleum, Petroleum Products and Related Distallates”. That includes refinery output.
Exports: $5.9 Billion
Imports: $52.6 Billion
Just to put those figures in perspective, total exports that year were $583 billion and total imports were $743.
I don’t have the data for crude oil, but I can provide 1995 data on “Petroleum, Petroleum Products and Related Distallates”. That includes refinery output.
Exports: $5.9 Billion
Imports: $52.6 Billion
Just to put those figures in perspective, total exports that year were $583 billion and total imports were $743.
Just in case I wasn’t clear above, it is possible that it might be cheaper to ship Alaskan oil to Japan than to Los Angeles, depending upon transportation costs. LA would then buy its oil from Mexico (and Texas, etc.) Still, given the above figures, I’m not sure that happens all that often.
