Question on future oil drilling....

[g8terh8ter_eric]

How long would it take to get the laws correct, and how much money would it cost to get this country in the position to actually be a net exporter, like we really should be in the first place??

 

[GAVol]

Pretty sure we're just barely a net exporter as of 2011.

 

[g8terh8ter_eric]

Pretty sure we're just barely a net exporter as of 2011.

Interesting, considering where prices are.

 

[gsvol]

We could be a huge exporter within five years imo.

 

[Weezy]

I thought the whole net exporter stuff was just refining, not production.

 

[gsvol]

Harvard Biologist Accuses Al Gore of 'Environmental Slave Profiteering' - Christian Newswire

Critical of Obama's green energy policies, Harvard Biologist and Blogger, Jonathan L. Gal accuses Al Gore and other green energy venture capitalists of trying to profit from biased energy policies that leave average Americans enslaved by high pump prices for gasoline and other transportation fuels. He advocates for Newt Gingrich and the "$2.50 Gas" policy that will open up domestic oil resources, increase supplies, and lower pump prices to $2.50, or less.
------------------------

New oil and gas fracking technology can safely open up new US oil reserves in North Dakota, which are 25X larger than Saudi Arabian reserves and can save the US economy from an economic disaster like Greece, according to Mr. Gal.

"With 49 Million Americans in poverty and high unemployment rates, the high energy price policies of this administration are unconscionable, not to mention unnecessary," said Mr. Gal. "It appears that Mr. Gore, and his colleagues, have lost their moral compass in pursuit of profits on their green energy ventures."

For Mr. Gal's complete essay on this topic, please click here.

 

[gsvol]

I thought the whole net exporter stuff was just refining, not production.

That is also hard to believe.

To the best of my knowledge we havn't built a new refinery in the USA in forty years.



America

President Obama says his energy policy is a great success. In support, Democratic-party stalwart John Podesta trumpets the claim that the United States is now producing more oil than it imports. A recent article in the Bloomberg News goes even further, saying that the U.S. is now a net oil exporter. New York Times columnist Tom Friedman instructs us to rejoice: High oil prices are now good for the United States.

Unfortunately, none of this is true.

For the record, according to the Department of Energy/Energy Information Agency February 2012 Monthly Energy Review, the United States currently consumes (November 2011 figures, p.52) 12.93 million barrels of oil per day (mpd) in its transportation sector, 4.55 mpd in its industrial sector, 1.159 mpd in its residential and commercial sectors, and 0.096 mpd in electrical-power generation, for a total consumption of 18.735 mpd. In contrast, (page 37) in 2011, the United States averaged a production rate of 5.671 mpd of crude oil, or 30 percent of its total consumption, for a net deficit of 13.064 mpd, or 4.77 billion barrels per year. At today’s oil price of $105 per barrel, the bill for these imports runs to $500 billion per year, a tax on our economy equal to 20 percent of what Americans pay the IRS, and a reduction in the nation’s GDP sufficient to account for a loss of 5 million jobs at an average salary of $100,000 per year each.

So the administration’s claims about having made meaningful progress towards fixing America’s oil catastrophe are completely false.

 

[VolsNSkinsFan]

we export gasoline because we can refine it cheaper here than anywhere else in the world

 

[rjd970]

Given speculation, and it's effect on current pricing, if we were to announce a couple of new drilling sites, with added product on the market in future, we should see an immediate drop in price?

Current supply and demand doesn't seem to have an effect on current pricing. I'm pretty sure supply is up and everything I have read is demand is way down. It is this business of somebody farting in the ME and speculators run wild.

Also interesting that we are a net exporter of gas because of how cheap it can be refined here, yet its profit margin is so low. Doesn't seem right.

 

[Weezy]

Given speculation, and it's effect on current pricing, if we were to announce a couple of new drilling sites, with added product on the market in future, we should see an immediate drop in price?

Current supply and demand doesn't seem to have an effect on current pricing. I'm pretty sure supply is up and everything I have read is demand is way down. It is this business of somebody farting in the ME and speculators run wild.

Also interesting that we are a net exporter of gas because of how cheap it can be refined here, yet its profit margin is so low. Doesn't seem right.

It's more complicated than that. Demand is down here, but up in Asian and Indian markets. The value of the dollar is down. Refining costs. And while production has a long term window, speculation helps prevent against sharp adjustments that would come from loss of supply, i.e. Iran (it's a global market).

I still think speculation is probably way too active than it needs to be. And I would like to see what would happen if we coupled speculation restrictions on oil speculation with announcing more drilling and exploration domestically. Just to see what movement there is. It happened in 2008 and prices went down, but there were other factors at play there (GDP fell, Euro went down). There's a healthy amount of speculation to help keep the price less volatile, but I think there's too much right now (70% of oil futures activity, up from 30% pre-2000s).

 

[rjd970]

It's more complicated than that. Demand is down here, but up in Asian and Indian markets. The value of the dollar is down. Refining costs. And while production has a long term window, speculation helps prevent against sharp adjustments that would come from loss of supply, i.e. Iran (it's a global market).

I still think speculation is probably way too active than it needs to be. And I would like to see what would happen if we coupled speculation restrictions on oil speculation with announcing more drilling and exploration domestically. Just to see what movement there is. It happened in 2008 and prices went down, but there were other factors at play there (GDP fell, Euro went down). There's a healthy amount of speculation to help keep the price less volatile, but I think there's too much right now (70% of oil futures activity, up from 30% pre-2000s).

I guess I am confused on what a "sharp adjustment" is. If Iran announced tomorrow they are cutting off all supply, who knows what oil and gas prices would do. My bet is it would be a substantial increase in to what it is now. If oil is up now based just on speculation, then actual reality is going to be much worse.

 

[rjd970]

US Gas & Oil Prices and Price History

U.S. Crude Oil Price per Barrel

These are today's dollars. Gas is currently averaging around $3.75/gallon, with potential unreast in the ME being a contributing factor. At the onset of both Iraq wars it never reached above $2.50/gallon....with actual unrest and supply disruption from Iraq. Domestic supply and demand is currently more favorable now to lower prices then it was then too....so unless a weak dollar, demand from Asia, and refining cost is adding the every bit of that difference, then it is easy to believe there is significant overspeculation right now.

 

[Weezy]

I guess I am confused on what a "sharp adjustment" is. If Iran announced tomorrow they are cutting off all supply, who knows what oil and gas prices would do. My bet is it would be a substantial increase in to what it is now. If oil is up now based just on speculation, then actual reality is going to be much worse.

Right now, if the price of oil increases due to speculation predicting that they will go higher due to loss supply. That encourages producers to ramp up exploration or production because it's either now profitable or more profitable at the higher prices. The Saudis might be more encouraged to sell more offsetting the reudction by Iran. By setting future oil prices, speculation can help reduce volatility in an inelastic market.

The downside with having 70% of oil futures done by pure speculators who have no intention of receiving said oil, is that it encourages prices to go higher than it should. Or fall lower than it should.

That's my most basic example. Hell it might not even be right since I know very little on oil futures. But I do think anybody who tells you one single thing is driving oil prices, doesn't know what he's talking about, as it is a very complex market.

 

[Weezy]

And to clarify my official position is that I don't think either opinion on speculators is right or wrong. I know analysis has been done to show that it affects it little, and is a strawman argument. But my intuition says there is way too much activity.

 

[rjd970]

Interesting.

 

[g8terh8ter_eric]

So, my question is, why can't we convert to natural gas, and tell the ME to go F-off?? I don't understand why we don't do that, and it would be much cleaner.

 

[gsvol]

So, my question is, why can't we convert to natural gas, and tell the ME to go F-off?? I don't understand why we don't do that, and it would be much cleaner.

Are we going to convert all cars, trucks, train engines and tow boat engines that push barges to natural gas also?

NG can help replace coal but we are killing the coal industry needlessly and it will bring American economy back to the 1930s level.

Let's hope the EPA doesn't kill fracking. Fracking has been in use since 1949 and there isn't even one documented case of the practice contaminating ground water.

Besides that we get thousands of other products from petroleum that are important for an industrial society, from asphalt to cleaning solvents.

One of our biggest problems, other than preventing our recovery of our own known reserves of oil for dubious reasons, is that regulations have caused the closing of countless domestic oil refineries and not building new ones.

The last time anyone tried to do anything about that was during the Bush I presidency when he proposed easing draconian regulations but the democrat congress wouldn't even discuss it.

Even a small oil company drilling on private land can generate a positive cash flow within one year of setting up to drill.

To restart an unused refinery takes about two years, to build a new one from scratch takes about seven years.

That doesn't take into account dealing with the government red tape which may just amount to wasted money if they don't grant the permit, which is increasingly prevelent.

 

[gsvol]

So, my question is, why can't we convert to natural gas, and tell the ME to go F-off?? I don't understand why we don't do that, and it would be much cleaner.

How about airliners, is natural gas the answer?

Most any plastic product uses petroleum products also.

BTW, we also have the capability to gasify coal.