The facts about drilling our way to cheap gas

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the last time we were in this predicament lifting the domestic drilling ban caused oil prices to drop from $145 a barrel to $60 a barrel.....that's more than 10%.......
 
Any increase in American oil supply will not affect any price at any pump in America. The oil goes to a global market where it will simply be like a snowflake in an ocean. Nothing will happen except maybe the speculators will figure out even more ways to profit at the unfair and unknown costs to the consumers.
 
Gatorman said:
Any increase in American oil supply will not affect any price at any pump in America. The oil goes to a global market where it will simply be like a snowflake in an ocean. Nothing will happen except maybe the speculators will figure out even more ways to profit at the unfair and unknown costs to the consumers.
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You have a dangerously simplistic view of how oil is distributed and produced, as well as how gasoline prices are determined. I can't believe you want to take yet another swing at speculators. We see what happens when you try to punish and regulate speculation, it stops happening and your economy goes stagnant, then people lose their jobs and we have massive unemployment. Right now, we are in desperate need to have speculators speculating on things, so the economy can grow and thrive... but let's not get off the topic here. Gas prices are certainly determined by the speculators.

Whenever something happens over in the middle east, a war or turmoil... the speculators speculate there may be a disruption in oil supply, and the price on the market begins to rise, and speculators buy shares. There's not a way to stop this from happening, it's natural reaction to turmoil in the middle east. Just as speculators can drive the price of oil up, they can also drive the price down by selling shares off. If you are relatively clear on this, try to comprehend... if we simply announced a bold aggressive domestic drilling policy or initiative, that alone, would cause the same speculators to speculate the supply would soon be plentiful, therefore, the best time to sell is now! In other words, within DAYS... the price of gas at the pumps would decrease, before the first drill bit hit the ground.

Now, generally speaking, speculators are not influenced by political double-speak, so when Obama goes around telling everyone about how he's already drilling more than we've ever drilled before, and it won't make any difference if we drill more... blah blah blah... well, the speculators are not inclined to believe his shit, and they continue to speculate oil prices will rise. If we aren't going to drill for more, I predict the same... it's really a no-brainer.
 
PostmodernProphet said:
lol....read the other threads, it saves time.....
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I did, PiMP. Admit you have no evidence to support your accusation that Obama caused gas prices to go up, it'll save time.

Presidents can't control the markets for oil and gasoline.

They have several tools for influencing prices in the future, but all take years to have an effect - and the effect isn't guaranteed.


http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/02/29/BUN71NDJQG.DTL#ixzz1pqFhbksR
 
Gatorman said:
Any increase in American oil supply will not affect any price at any pump in America. The oil goes to a global market where it will simply be like a snowflake in an ocean. Nothing will happen except maybe the speculators will figure out even more ways to profit at the unfair and unknown costs to the consumers.
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it will be a "snowflake" in an ocean if the government refuses to let more than a snowflake be produced......any one with any comprehension of supply and demand could not logically say that increasing supply will have no effect on price......
 
\\(())// said:
I did, PiMP. Admit you have no evidence to support your accusation that Obama caused gas prices to go up, it'll save time.
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sure, it's sheer coincidence that when a president lifted the federal restrictions on domestic production the prices came down.....and when another president put them back, it went up......move along folks....this is NOT the solution you're looking for.....
 
PostmodernProphet said:
I don't believe that for a minute.....
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Well it really doesn't depend on whether you believe it or not, so it doesn't really matter. Anytime you take capitalist trade, or ANYTHING for that matter, and you impose more regulation or taxation on it, the result is... you get LESS OF IT! Now, think about "speculation" for a moment, isn't EVERY investment, a speculation? Don't we invest in stocks and bonds, etc., speculating that we will make a profit? So why is this a "bad" thing we don't want to happen? When we try to remove this 'advantage' from investment by restriction or regulation, the result is an anemic economy, like we have now!
 
\\(())// said:
I did, PiMP. Admit you have no evidence to support your accusation that Obama caused gas prices to go up, it'll save time.

Presidents can't control the markets for oil and gasoline.

They have several tools for influencing prices in the future, but all take years to have an effect - and the effect isn't guaranteed.


http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/02/29/BUN71NDJQG.DTL#ixzz1pqFhbksR
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So Obama releasing oil from the strategic reserves will not have any immediate effect on the price of oil? Thanks for being honest!!

The president can (and often does) take action to influence the oil market. While it is true, the president doesn't set the price, he does control policy, and at the current time, we have a very restrictive drilling policy, along with a middle east that is on fire... ergo; high gas prices.

GUARANTEED: If we drill for more domestic oil, we will have more domestic oil available.
GUARANTEED: If we had more oil available, the price would go down.

It's not complicated or hard to understand, these are the facts of life when it comes to oil and gas prices.
 
Gatorman said:
Any increase in American oil supply will not affect any price at any pump in America. The oil goes to a global market where it will simply be like a snowflake in an ocean. Nothing will happen except maybe the speculators will figure out even more ways to profit at the unfair and unknown costs to the consumers.
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You're partially right. If increased domestic production leads to reduced domestic prices then domestic producers would only sell abroad where prices are higher.

Be that as it may, increased domestic production alone is not the answer.
 
Dixie said:
So Obama releasing oil from the strategic reserves will not have any immediate effect on the price of oil? Thanks for being honest!!

The president can (and often does) take action to influence the oil market. While it is true, the president doesn't set the price, he does control policy, and at the current time, we have a very restrictive drilling policy, along with a middle east that is on fire... ergo; high gas prices.

GUARANTEED: If we drill for more domestic oil, we will have more domestic oil available.
GUARANTEED: If we had more oil available, the price would go down.

It's not complicated or hard to understand, these are the facts of life when it comes to oil and gas prices.
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That's not quarenteed. Oil is a commodity. Domestic producers of that commodity will sell it where they can get the highest prices. If that means selling it abroad, they will. So increased domestic production alone will not quarentee lower prices.

To see significant lowering in prices you will need to see increased worldwide production and a worldwide decrease in demand. Otherwise domestic producers will just sell abroad to obtain higher prices for their commodities which in turn would increase domestic demand resulting in higher domestic prices.

I'm not saying that this should be an argument to not increase domestic production I'm just pointing out the fact that increased domestic production alone is not enough.
 
Derp Derp said:
That's not quarenteed. Oil is a commodity. Domestic producers of that commodity will sell it where they can get the highest prices. If that means selling it abroad, they will. So increased domestic production alone will not quarentee lower prices.

To see significant lowering in prices you will need to see increased worldwide production and a worldwide decrease in demand. Otherwise domestic producers will just sell abroad to obtain higher prices for their commodities which in turn would increase domestic demand resulting in higher domestic prices.

I'm not saying that this should be an argument to not increase domestic production I'm just pointing out the fact that increased domestic production alone is not enough.
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Domestic producers sell oil for profit, like everyone else. Increasing domestic production doesn't guarantee lower prices, it only guarantees more supply. When supply is abundant, speculation on higher oil prices decline, therefore, the market prices tend to decline as well... supply and demand. You see, in your scenario, whenever the domestic producers started selling this abundance of new oil in the markets, the other producers would have to lower prices to compete. This is the component you are missing in your figuring, you assume that a great influx of oil on the market, wouldn't have any effect on non-domestic oil producers and their price, and that is just not supportable in theory.

I believe you are partially correct, in that it won't be enough to increase domestic drilling, not with a liberal democrat congress who has to be dragged kicking and screaming to authorize ANY new drilling.... it's just not reasonable to presume we could ever increase it enough to effect a significant change. Of course, if we didn't have liberal democrats in Congress, and we could pass some bold expansive initiative to drill, and we didn't have to appease liberals and environmentalists, we could have $2 a gallon gas by the end of the year.

Now I want you to go take a look at the population growth rate of emerging countries, and the increased rate of oil consumption over the past 50 years, and tell me where you see a way we can decrease demand? The fact of the matter is, third world emerging nations can't buy electric roller skates for $100k a pop... they don't have the wealth we do, so it's not an option for them. These nations are growing in industry, which means even MORE oil is needed on a daily basis, and this rate of increase is markedly higher than any reasonable plan to decrease dependence globally. In other words, you won't ever conserve enough oil to compensate for the growth rate worldwide. Does this mean we should just give up and not worry about conservation? Not at all, it just means that conservation is not a solution, and never will be, and the longer we pussy-foot around and refuse to drill for more oil, the worse our situation becomes.
 
Dixie said:
Now, think about "speculation" for a moment, isn't EVERY investment, a speculation?
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not in the same context we use it here, no....here "speculation" is referring to a seperate level of investment that is disassociated from either the supply or the demand....it's a "middle-middle" man who's sole purpose is to profit from manipulating the supply/demand structure.......
 
PostmodernProphet said:
not in the same context we use it here, no....here "speculation" is referring to a seperate level of investment that is disassociated from either the supply or the demand....it's a "middle-middle" man who's sole purpose is to profit from manipulating the supply/demand structure.......
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But wait... When you go out and buy stock in Apple or Microsoft... are you not 'disassociated' with supply and demand as well? Aren't you a "middle man" who is speculating these stocks will increase in value and make a profit for you, ultimately? Isn't that the sole purpose of ANY investment?

I fear you have fallen into the rhetoric trap of the left, which is a bad thing for a conservative to do! Speculators are not EVIL! Speculation is not BAD! They have become demonized by the left, because the left always needs someone to blame when their idiotic ideas fail, as they have with oil! Think about it... I know it's hard to remember, but try to recall the time when gas prices weren't a problem... did you hear ANYTHING about speculators? They didn't just suddenly start this practice when oil prices went up, there have been speculators for years and years. Liberals made them an "issue" over the past decade, and some people are so uninformed and ignorant of how this all works, they simply buy into the rhetoric because it sounds good.
 
Dixie said:
But wait... When you go out and buy stock in Apple or Microsoft... are you not 'disassociated' with supply and demand as well? Aren't you a "middle man" who is speculating these stocks will increase in value and make a profit for you, ultimately? Isn't that the sole purpose of ANY investment?

I fear you have fallen into the rhetoric trap of the left, which is a bad thing for a conservative to do! Speculators are not EVIL! Speculation is not BAD! They have become demonized by the left, because the left always needs someone to blame when their idiotic ideas fail, as they have with oil! Think about it... I know it's hard to remember, but try to recall the time when gas prices weren't a problem... did you hear ANYTHING about speculators? They didn't just suddenly start this practice when oil prices went up, there have been speculators for years and years. Liberals made them an "issue" over the past decade, and some people are so uninformed and ignorant of how this all works, they simply buy into the rhetoric because it sounds good.
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again, a person who buys stock on the stock market is not a speculator in the sense we are talking about here......a person who buys oil on the commodities market because he needs oil in his refinery is not a speculator.......a person who buys oil on the commodities market because he hopes to profit from a shortage when the guy with the refinery needs it, is......we don't need the speculator to make the system work....all we need is someone who produces oil and someone who uses it.....

compare it to this....do we need a guy in the grocery store who shows up in the morning and buys all the bread, hoping that near the end of the day people will be hungry enough to pay him a nickel more a loaf than he bought it for in the morning?....
 
PostmodernProphet said:
again, a person who buys stock on the stock market is not a speculator in the sense we are talking about here......a person who buys oil on the commodities market because he needs oil in his refinery is not a speculator.......a person who buys oil on the commodities market because he hopes to profit from a shortage when the guy with the refinery needs it, is......we don't need the speculator to make the system work....all we need is someone who produces oil and someone who uses it.....

compare it to this....do we need a guy in the grocery store who shows up in the morning and buys all the bread, hoping that near the end of the day people will be hungry enough to pay him a nickel more a loaf than he bought it for in the morning?....
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Again, yes... a person who buys a stock with the speculation that it might grow in value, is a "speculator" in EVERY SENSE of the word. People buy things everyday on the commodities market, with the hope and expectation of making a profit, and yes... they SPECULATE they will make a profit. There is no way to eliminate speculation without eliminating free market capitalism, because that is exactly what happens when you prohibit speculation.

Let's take your analogy with the bread and consider, the grocery has a limited supply of bread (our current oil situation), versus a grocer who employs a bread maker, who can replenish whatever the 'speculators' buy (increased domestic production), and satisfy the market demand for the day... what happens to the 'speculator' then? Increased domestic drilling does more to discourage profiteering from speculators than anything we could do! Suddenly, there is no profit to be made in gobbling up all the cheap oil, because there is too much of it, and the price is now DROPPING not rising. So the speculators begin to sell off the futures they have... and the price continues to drop... the last time we announced massive increases in domestic drilling (under Bush), the price of crude went from over $100 a barrel to around $40, in a matter of two weeks. This was largely due to speculators unloading all the oil futures.

There is also ANOTHER aspect to domestic drilling that everyone wants to completely ignore here, and the is number of jobs and economic activity it would create. Thousands... maybe millions of jobs, good paying Big Oil jobs... hundreds of support industries which service the oil industry... hundreds of trucking and transport companies moving gas and oil around... more gas refining, meaning more jobs there as well. All of these jobs paying taxes, all of these companies making profits and paying taxes... as opposed to clinging to some idiocy that doesn't even make rational sense, of NOT drilling more?
 
PostmodernProphet said:
sure, it's sheer coincidence that when a president lifted the federal restrictions on domestic production the prices came down.....and when another president put them back, it went up......move along folks....this is NOT the solution you're looking for.....
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Unless you can present some cause and effect evidence, PiMP coincidence works...

BTW, did gas prices go up during any Republican administrations?
 
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