JimofPennsylvan
Platinum Member
- Jun 6, 2007
- 869
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In light of the dramatic drop in oil prices President Barack Obama should do a reassessment about the Keystone Pipeline and support it. This drop has highlighted that the world has an oil supply problem, that is, there is too much supply relative to demand which is driving down price. The really unfortunate thing is that this problem isn't going away unless the worlds three key producers cut a deal to control production; Russia and Saudi Arabia which produce around nine million barrels of oil a day and Iraq which produces around four million but has reserves to produce around nine million barrels a day need to agree that if need be to raise prices to a good level Russia and Saudi Arabia will each take up to three million barrels of oil a day off the market and Iraq will max out their production at six million barrels a day. Such a deal has an extremely low probability of occurring to the point where it is not a foreseeable outcome because all three countries desperately need oil revenue.
The problem this presents for America is that low oil prices will reduce shale oil production throughout America because the cost to do such production is so high that low oil prices don't leave a good enough profit margin for shale producers so they need to cut back production. The problem this presents for the President and his party is that this will lead to spot spikes in gasoline prices for consumers throughout America as their local refiners lose their normal sources of oil supply and have to pay much higher prices in the open market. This will leave consumers in these affected spot markets mad because they have to pay higher prices and believing the Democrat Party doesn't have a good energy policy. Approving the Keystone Pipeline will bring more oil supply into America thus lessening the possibility where oil refineries in various spots throughout the country are paying extraordinary high prices for oil or can't get it at all and it will increase the supply of gasoline and processed petroleum products from the Gulf coast refineries for large swaths of the American people that can be served from those refineries. Democrats also should keep in mind that shale producers have cut their capital spending for 2015, many of their production price hedges expire at the end of 2015 - so come 2016 shale producers will have more incentive to let oil shale production fall during this period the U.S. economy will continue healing so oil demand will pick-up very possible resulting in the three to four months preceding the 2016 Presidential elections the American people seeing spot gasoline price spikes throughout the country not very helpful for the Democrat Presidential candidate.
One prior criticism President Obama has mentioned for not approving the Keystone pipeline line is that this pipeline is about bringing Canadian oil to American refineries it is not about moving American oil to American refineries; his attitude is like keep you're garbage in Canada you Canadians don't send it over here to America. Mr. President you really need to rethink that criticism because in 2014 American doubled the amount of garbage I mean oil it sent to Canada from 2013 in 2014 America sent over one-hundred million barrels of oil to Canada. Moreover, to America's good fortune Canada doesn't take the parochial perspective about oil consumption that the White House does the Canadian company TransaCanada is pursuing building the Upland Pipeline project which is a project to build a 200 mile pipeline from North Dakota into Canada which could move up to 300 thousand barrels of American oil a day into Canada providing a nice market for North Dakota oil producers.
The problem this presents for America is that low oil prices will reduce shale oil production throughout America because the cost to do such production is so high that low oil prices don't leave a good enough profit margin for shale producers so they need to cut back production. The problem this presents for the President and his party is that this will lead to spot spikes in gasoline prices for consumers throughout America as their local refiners lose their normal sources of oil supply and have to pay much higher prices in the open market. This will leave consumers in these affected spot markets mad because they have to pay higher prices and believing the Democrat Party doesn't have a good energy policy. Approving the Keystone Pipeline will bring more oil supply into America thus lessening the possibility where oil refineries in various spots throughout the country are paying extraordinary high prices for oil or can't get it at all and it will increase the supply of gasoline and processed petroleum products from the Gulf coast refineries for large swaths of the American people that can be served from those refineries. Democrats also should keep in mind that shale producers have cut their capital spending for 2015, many of their production price hedges expire at the end of 2015 - so come 2016 shale producers will have more incentive to let oil shale production fall during this period the U.S. economy will continue healing so oil demand will pick-up very possible resulting in the three to four months preceding the 2016 Presidential elections the American people seeing spot gasoline price spikes throughout the country not very helpful for the Democrat Presidential candidate.
One prior criticism President Obama has mentioned for not approving the Keystone pipeline line is that this pipeline is about bringing Canadian oil to American refineries it is not about moving American oil to American refineries; his attitude is like keep you're garbage in Canada you Canadians don't send it over here to America. Mr. President you really need to rethink that criticism because in 2014 American doubled the amount of garbage I mean oil it sent to Canada from 2013 in 2014 America sent over one-hundred million barrels of oil to Canada. Moreover, to America's good fortune Canada doesn't take the parochial perspective about oil consumption that the White House does the Canadian company TransaCanada is pursuing building the Upland Pipeline project which is a project to build a 200 mile pipeline from North Dakota into Canada which could move up to 300 thousand barrels of American oil a day into Canada providing a nice market for North Dakota oil producers.