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Domestic Drilling

Additional domestic drilling will reduce oil prices

  • Total voters
    57
OhIsee.Then said:
Today the capacity for the world’s oil ‘production’ far exceeds its use. The Saudi’s alone can easily make up for the lost Libyan oil. Global demand isn’t the first order driver for the price of oil. Controlling the supply, which the Saudi’s and others do, and speculation are the first and second order drivers. To stop this there would need to be a benevolent supplier (One that is not trying to maximize profit.) of oil with the capacity on the order of the Saudi’s. None of North America’s wells are run by benevolent suppliers.
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I spent a lot of years in commerce and don't recall a benevolent supplier of anything. I do disagree with your definition of supply control and speculation being the drivers of any product. Product demand, sales, is always the primary focus with supply control and inventory being normal business functions to maximize profitability with commodity speculation a secondary, associated market. Without demand there would be no supply/inventory or speculation.
 
The purpose of this "drilling" must NOT be to reduce gas prices.
What is important, that if there is energy(gas,oil) there we must go after it !
We cannot live in fear, we must be brave !
Hyperbole ? you say ?
Male bovine fecal matter say I.
 
croniccynic said:
I spent a lot of years in commerce and don't recall a benevolent supplier of anything. I do disagree with your definition of supply control and speculation being the drivers of any product. Product demand, sales, is always the primary focus with supply control and inventory being normal business functions to maximize profitability with commodity speculation a secondary, associated market. Without demand there would be no supply/inventory or speculation.
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Yes, that is the obvious point, no benevolent suppliers, now or in the future.

World oil demand remains relatively constant in a wide price range. Maybe gas at $6/gal might slow the drivers around here, but $4.40 gas isn’t. At $2/gal I don’t think drivers would go much faster than the 79 mph that is now nominal here. There are many other examples too. Price isn’t adjusting demand much. So the suppliers should be competing for market share, but it’s not happening since there is a very large, essentially family run, supplier that is willing to adjust its supply to control price and therefore the effect on their investments. Aramco has invested its money in other economies, so it important to them to have their income from their investments not hurt by oil prices that are too high. Aramco isn’t the only organization with complex motivations when it comes to pricing its product. There may also be a functioning cartel of suppliers. Therefore it more complicated than your formula’s limited inputs.
 
croniccynic said:
I spent a lot of years in commerce and don't recall a benevolent supplier of anything. Well, we have our Ebenezer Scrooges and we have many kind decent people in business, and I think the benevolent outnumber the misers/misanthropes.I do disagree with your definition of supply control and speculation being the drivers of any product. Product demand, sales, is always the primary focus with supply control and inventory being normal business functions to maximize profitability with commodity speculation a secondary, associated market. Without demand there would be no supply/inventory or speculation.
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Interesting, I see your point. Of course, a businessman must balance kindness with profitability - no easy task..
I just think that ones heart should be warmer - there is more to life than just money..
I suspect that speculation is too fear driven.
 
OhIsee.Then said:
Yes, that is the obvious point, no benevolent suppliers, now or in the future.

World oil demand remains relatively constant in a wide price range. Maybe gas at $6/gal might slow the drivers around here, but $4.40 gas isn’t. At $2/gal I don’t think drivers would go much faster than the 79 mph that is now nominal here. There are many other examples too. Price isn’t adjusting demand much. So the suppliers should be competing for market share, but it’s not happening since there is a very large, essentially family run, supplier that is willing to adjust its supply to control price and therefore the effect on their investments. Aramco has invested its money in other economies, so it important to them to have their income from their investments not hurt by oil prices that are too high. Aramco isn’t the only organization with complex motivations when it comes to pricing its product. There may also be a functioning cartel of suppliers. Therefore it more complicated than your formula’s limited inputs.
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I quoted the basic formula. Of course there are other factors, but without demand no commodity market would develop complex circumstances influencing pricing. The idea of increased US oil drilling/production lowering fuel prices at the pump is so laughable I never fail to be amazed at what a general public will swallow.
 
earthworm said:
Interesting, I see your point. Of course, a businessman must balance kindness with profitability - no easy task..
I just think that ones heart should be warmer - there is more to life than just money..
I suspect that speculation is too fear driven.
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Kindness balanced with profitability? Speculation driven by fear? I have no familiarity with those terms being used in the world of commerce.
 
cpwill said:
well yeah. we're stupid enough not to take advantage of our own supply to reduce our dependence on theirs'.
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We have no adequate supplies of cheap oil to take advantage of, despite those that stupidly claim that we do. And we were stupid not to pursue alternatives to oil once we passed peak oil in this country 40 years ago! :sun
 
I think domestic drilling is a good step but, we need more (HR 4004 is a good read). For example, suspend the federal gas tax. We also need to reexamine our foreign policy; stopping the war in Iraq and become diplomatic with Iran. I think we must also understand that oil prices have a lot to do with inflation.
 
peepnklown said:
I think domestic drilling is a good step but, we need more (HR 4004 is a good read). For example, suspend the federal gas tax. We also need to reexamine our foreign policy; stopping the war in Iraq and become diplomatic with Iran. I think we must also understand that oil prices have a lot to do with inflation.
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I agree with stopping the war in Iraq and becoming diplomatic with Iran, but all the other suggestions seem like placing a band aid on the real problem, our lack of effort in developing alternatives to declining fossil fuels.
 
@Catawba
You can develop alternative fuels in parallel with reducing oil prices for America. Now, suspending the federal gas tax might seem minimal to you but, in conjunction with other suggestions it can make a difference.
 
peepnklown said:
@Catawba
You can develop alternative fuels in parallel with reducing oil prices for America. Now, suspending the federal gas tax might seem minimal to you but, in conjunction with other suggestions it can make a difference.
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A 15% reduction in pump price won't have any noticeable economic impact and raises the obvious question of how to replace that tax revenue stream.
 
peepnklown said:
@Catawba
You can develop alternative fuels in parallel with reducing oil prices for America. Now, suspending the federal gas tax might seem minimal to you but, in conjunction with other suggestions it can make a difference.
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How would you propose we make up for that lack of revenue?
 
obvious Child said:
Hyperbole much? My point (which you seem content to ignore) is that we cannot bring prices down with domestic drilling. The 10 year argument is merely to contrast additional supply with additional demand to point out you are wrong. The corollary argument is that we should be getting OFF oil not getting more attached. Additional drilling is fine. That will slow prices. But it cannot reduce prices.
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Filled up my tank today for $1.78.
 
cpwill said:
Filled up my tank today for $1.78.
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Heard something on BBC news last night while driving home.

About Saudi Arabia intentionally keeping their production levels up - apparently they can produce oil cheaper, and they are using that capability to drive sources that are harder (and thus more expensive) to produce from out of the market.

OR so the guy BBC talked too says.
 
Are the people who voted no doing so because they'd prefer a shift to alternative energies or because they think it wouldn't reduce prices?
 
The Mark said:
Heard something on BBC news last night while driving home.

About Saudi Arabia intentionally keeping their production levels up - apparently they can produce oil cheaper, and they are using that capability to drive sources that are harder (and thus more expensive) to produce from out of the market.

OR so the guy BBC talked too says.
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It's almost like market forces work.
 
Mayor Snorkum said:
Saudi Arabia cannot export SUNLIGHT.

So, when their oil runs out, they're in deep camel poo.
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But with enough renewable energy, they could support some kind of industry, perhaps?
 
obvious Child said:
Hyperbole much? My point (which you seem content to ignore) is that we cannot bring prices down with domestic drilling. The 10 year argument is merely to contrast additional supply with additional demand to point out you are wrong. The corollary argument is that we should be getting OFF oil not getting more attached. Additional drilling is fine. That will slow prices. But it cannot reduce prices.
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Just to point out - I filled up for $2.02 earlier this week.
 
It LIVES AGAIN!!!
 
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