A flawed Oil policy

Discussion in 'Economy' started by jreeves, Jun 6, 2008.

  1. jreeves
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    jreeves Senior Member

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    :wtf:Saudi Arabia, he said, "holds the key to reducing gasoline prices at home in the short term." Therefore arms sales to that kingdom should be blocked unless it "increases its oil production by one million barrels per day," which would cause the price of gasoline to fall "50 cents a gallon almost immediately."

    Can a senator, with so many things on his mind, know so precisely how the price of gasoline would respond to that increase in the oil supply? Schumer does know that if you increase the supply of something, the price of it probably will fall. That is why he and 96 other senators recently voted to increase the supply of oil on the market by stopping the flow of oil into the Strategic Petroleum Reserve, which protects against major physical interruptions. Seventy-one of the 97 senators who voted to stop filling the SPR also oppose drilling in the Arctic National Wildlife Refuge.
    Also disqualified from complaining are all voters who sent to Washington senators and representatives who have voted to keep ANWR's oil in the ground, and who voted to put 85 percent of America's offshore territory off-limits to drilling. The U.S. Minerals Management Service says that restricted area contains perhaps 86 billion barrels of oil and 420 trillion cubic feet of natural gas -- 10 times the oil and 20 times the natural gas Americans use in a year.
    Drilling is under way 60 miles off Florida. The drilling is being done by China, in cooperation with Cuba, which is drilling closer to South Florida than U.S. companies are.

    ANWR is larger than the combined areas of five states (Massachusetts, Connecticut, Rhode Island, New Jersey, Delaware) and drilling along its coastal plain would be confined to a space one-sixth the size of Washington's Dulles Airport. Offshore? Hurricanes Katrina and Rita destroyed or damaged hundreds of drilling rigs without causing a large spill. There has not been a significant spill from an offshore U.S. well since 1969. Of the more than 7 billion barrels of oil pumped offshore in the past 25 years, 0.001 percent -- that is one-thousandth of 1 percent -- has been spilled. Louisiana has more than 3,200 rigs offshore -- and a thriving commercial fishing industry.

    America says to foreign producers: We prefer not to pump our oil, so please pump more of yours, thereby lowering its value, for our benefit. Let it not be said that America has no energy policy.
     
  2. RetiredGySgt
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    RetiredGySgt Platinum Member

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    Already been posted that there is a million barrel surplus in the market. It is NOT supply that is the problem.
     
  3. jreeves
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    jreeves Senior Member

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    However pumping our own oil will help drive down the cost.
     
  4. RetiredGySgt
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    RetiredGySgt Platinum Member

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    Actually it won't. We do not have the capability to refine it so we would have to ship it out of country to make it into what we needed anyway. Further there is a reason Most oil pumped in the US is sold outside the US. Taxes, tariffs and ignorant laws make it to cost prohibitive to use our own oil.
     
  5. Toro
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    Toro Diamond Member

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    Actually, it is a supply problem. The amount in storage is only a small portion of total consumption. Storage is tighter than last year, and shipments from the Gulf to the East have skyrocketed while shipments to the West have plummeted. Morgan Stanley said this morning we could see $150 oil by July 4.
     
  6. Detmurds
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    Detmurds VIP Member

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    The flaw is the fact that our government (Fed., State, County, and local) on average taxes about 40-60 cents per gallon! Stop the taxing, and let's stop blaming the oil companies who employ Americans, since oil companies make about 9 cents to the gallon.
     
  7. AllieBaba
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    AllieBaba BANNED

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    Then it makes sense that we should use our own, methinks.
     
  8. Toro
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    Toro Diamond Member

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    It wouldn't matter.

    The demand curve for energy in the short-run is inelastic. What that means is that within a short period of time, prices would rise to almost where they were prior to the tax being instituted.
     
  9. AllieBaba
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    AllieBaba BANNED

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    Of course it would matter.
     
  10. Paulie
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    Paulie Platinum Member

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    Well I guess that closes THIS thread out.
     

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