No, really. Story here:
I’m confused. Isn’t Mexico a major oil producer?
Anyway, this is about gasoline, not crude. Presumably we have a lot of refining capacity here, perhaps more than the countries in question. But wouldn’t reserving it for domestic consumption go a long way toward holding down the price?
No, not really. Oil as a commodity is founded on the fact that all oil is identical (well, at a given grade). Because of this, it makes a lot of sense to export oil even if you are also importing, because transportation costs differ for different regions. It’s surprisingly cheap to ship oil by supertanker. But going overland is tougher, which is why refineries usually exist at ports. You either need a lot of tanker trucks, or a big expensive pipeline.
What this all means is that we either export the oil or it becomes even more expensive to use. And the money we spend on that oil won’t be spent on importing opil. So prices go up, our consumption stays roughly the same, and Mexico will then import the oil we would have. Their prices rise, too. And everyone is actually worse off.
I don’t even begin to understand the logic of this. “Reserving it” for who? Is Exxon going to sell it in the USA for a lower price because they’ve “reserved” it?
Gasoline is fungible. It’s all more or less the same. If you export one more gallon, that’s one more gallon that isn’t used in Mexico or Canada or Malaysia or whatever, and instead is sold back to the USA.
This assumption is based on the inaccurate impression that the oil market is broken up by countries. Oil is a global commodity. There is a global market for it. If you start prohibiting the export of gasoline you are only going to raise the global price of oil and cause prices to rise even more.
So let me see if I’ve got this straight: here’s a quote from a poll thread about whether you (the royal “you”) favored more drilling for oil:
I thought that last point was one of the stronger ones he had there. Are the people who’ve replied so far in this thread saying that “selling to China” would actually be a good thing for us, oil price-wise?
Joel Stein (humor/commentary for the LA Times) discusses this today in his column, “What’s So Bad About Foreign Oil?”
Now, we are talking gasoline vs. oil I admit - but it is a fungible substance. Drilling in America will increase the WORLDWIDE supply of oil (and therefore gas), not just America. This stuff flows everywhere:
The question really makes no sense. Oil is oil and it’s sold on a world market. If you drill for oil wherever you increase the supply. All things being equal, that would likely reduce the price. It’s not like oil prices are just going up in the U.S. They are going up worldwide. There is no U.S. oil market. U.S. consumers buy their oil on the world market. If you start prohibiting U.S. companies from selling oil overseas that really screws up the market as well as setting a very bad precedent. As a net importer, do we really want other companies to take the view that selling oil to foreigners is a bad idea?
I think it is fair to note that you often hear politicians talking about reducing our dependency on foreign oil. The markets are global. However, since the US does not produce enough for its own use we simply must buy from overseas. This makes the US vulnerable to machinations beyond its control (for instance OPEC can try to manipulate prices because we simply must buy some oil from them).
If the US was theoretically self-sufficient we’d still export oil and still buy from overseas. However, with theoretical oil independence the US is far less susceptible to the vagaries of international upsets. Even then it could not totally ignore them since an OPEC could still go for price manipulation but they’d be far less able to put the screws on since at some point the US could just tell them to piss off and sustain itself.
The international oil companies will sell it wherever they feel like. Corporations have no national loyalty. That is why ANWR is dumb. That will be sold wherever they feel like.
ANWR is dumb ehe? Out of curiosity, do you mean exploiting the ANWR region oil reserves is dumb, or are you as clueless as you sound by saying a region is ‘dumb’?
Further, again out of a morbid curiosity (I can’t resist), how exactly SHOULD ‘international oil companies’ sell oil? Should each country keep all it’s oil to itself? Should national governments decide when, how much and to who oil should be sold? I’m truly curious how you think things SHOULD work…though I suspect your post is just the same old knee jerk anti-corporation rant as usual.
Why would it? Again, you are thinking in terms of a country trying to hold on to resources (by gods know what means) of an international commodity. If the local domestic market is better (because of price, logistics, whatever) then that’s where the refined fuel will go…if other countries need refined fuels (which, if they don’t have refineries for, or if their refineries are older and less efficient technology) then why exactly shouldn’t they be able to buy it on the world market?
Again, this gets into the concept that nation states should some how control commodities and attempt to monopolize them for domestic consumption. What do you expect the effect on prices (not to mention trade) would be if every country attempted to do something like this?
-XT
XT you are incapable of learning. You guys still think supply and demand determines oil price. Yet the barrel price has dropped nearly 25 percent in the last month. There is no concomitant drop in demand. You guys have already argued that demand because of China and India can not go down. You have argued that speculation is not a factor in the price.
You are being suckered again. ANWR is a drop in the bucket. It will have no impact for years ,perhaps never. The only short term impact is making oil company value go up. Get ANWR on the books and it will increase the oil company net worth, There are 40 million acres of oil land on the books. They will drill it when they feel damn good and ready.
ANWR will not go into a special supply for America. It will just go into the huge world oil supply. A literal drop in the bucket. We do not have the authority to tell them where to sell it. It will go where they make the most money.
How would it do that?
We do not have the right to tell them where to sell.
You and BrainGlutton and many Americans seem to be under the odd impression that the US is some kind of socialist people’s democratic republic where soldiers return from Iraq with canteens full of stolen oil which they dump directly into your gas tanks. It makes it easier to understand why you voted Bush into office twice.
What does it matter to you, the average American, whether your oil comes from ARAMCO or Exxon Mobile? Is Exxon Mobile going to give you a discount and a hot dog just for being American?
Let’s suppose that the US is a net exporter of oil. Wehn oil prices go up, the American oil companies and the American government (who are ultimately the owners of the oil) become richer. This is good for you if you’re an oil company executive, but even the oil company executive is going to be paying the same price for gas as anyone else.
I live in Canada. We export oil. We pay more for gas than you do (or more precisely, we pay more in taxes the same for the gas). Some of us are richer because we are either involved in the oil industry or own shares in oil companies but the true cost of oil to us is the same as it is to anyone in any other country - if they were willing to pay more, our oil would be sold to them and not us. The government can force them to do so, a la Hugo Chavez, but since the owners of the oil companies are no less Canadian than anyone else, ultimately that’s just robbing Peter to pay Paul and distorting the country’s development path towards greater dependence on a finite resource.
Since even Social Democratic Canada is not willing to commit to such a path, what makes you believe Bush/Cheney and their corporate backers will?
I’m confused. America is a big corn producer. If you live in corn country and it’s in season, you can get 10 ears of corn for a dollar. If it’s off season and you don’t live in corn country, it’s $1 per ear.
We don’t more or less pay the world corn price year 'round for corn.
I’ve heard here on the Dope that if you live in Saudi Arabia gas is dirt cheap.
Why is American gas tied to the world price, but Saudi Arabia’s isn’t?
We don’t more or less pay the world corn price year 'round for corn.
Because, as so many here have pointed out so many times, oil is a fungible product, more so than corn. In addition to being somewhat more difficult to store and transport, farm produce in general is not easily traded across borders. Most agriculture in the developed world is almost completely subsidized by the government anyway.
It IS. Why would the Saudis sell gas to other Saudis for dirt cheap when they can sell it to Americans for a much higher price? Mostly because the rulers of Saudi Arabia own the oil and it is in their interests to throw the Saudi public a bone in return for letting them stay in power. That doesn’t make the country of Saudi Arabia as a whole any better off. Lots of other countries, China and India in particular, do this, and many (India in particular, China not as much) contribute significant portions of their GDP towards subsidizing their populace’s oil consumption.
No, it’s you that is incapable of learning. You’ve been told over and over and over (and over, over, over, etc etc) again that supply and demand only form part of the equation…and that speculation is a complex process that most certainly DOES impact the equation as well. Simply put there is no reason to respond to you on this subject anymore as I’ve explained this to you in several thread (and others have done so much better than I have), as well as pointed out repeatedly that this is YOUR strawman…no one else that I’m aware of things that speculation has nothing to do with it.
I don’t know why it’s so difficult for you to understand but obviously it is beyond your ability to absorb this.
What the fuck are you talking about? Did I say ANWR would solve all our problems? Did I say there was enough oil there to make us energy independent? Do you know what ‘strawman’ means?
All I said is that you calling a region ‘dumb’ sort of suggests that you many not have a clue what ‘ANWR’ actually means or is.
No shit. ALL oil goes into the ‘huge world oil supply’ Sherlock. You are preaching to the choir by pointing that out…tell BG and then send the message to yourself.
As for making money…well, duh! Of COURSE it will. That’s the point. IMHO ANWR should be left in reserve for now (well, the parts not already being exploited). However, IF it were to be opened up the point would be to make money…which is always the point. While you seem to think this is somehow evil or something I have no problem with it. The influx of capital to US flag companies (who would be developing and exploiting the resource) would be substantial…billions of dollars. While I’m sure it’s escaped you, those dollars are taxable, which means more money for the government (as well as more capital to the companies developing and exploiting the resource).
There is no way that all of ANWR AND all of the off shore oil would somehow magically make the US energy independent, because that’s not how the oil market works. However, what it WOULD do is increase the potential supply (in a small way, to be sure, but measurably)…and make a lot of money as well. I’m still on the fence myself about the offshore thingy (namely because it’s not as easy as just opening it up and seeing the oil flow out), but I doubt anyone thinks it will have no effect at all. Well, almost no one…
-XT
Moderator’s Note: Both of you knock if off with the ad hominems.
Where the hell did this come from? Where in anything I said lends credence to your rant?
You are WAY off base holding me to account for any of this or the rest of your diatribe. If you have an axe to grind fine but this is bullshit.
That’s fine. I’ll leave it to any interested readers to go back over the threads in question and determine for themselves the question of speculation and how it impacts the commodities market…and who can and can’t learn through repeated explainations. I think th evidence is pretty clear that in fact I was NOT using an ad hominem in this case but I respect that things have gotten overly heated here.
-XT