77% Want Increased Domestic Oil...

CollegeDoog said:

Demand curve determines equilibrium.

Demand curve is elastic.

Price won't deviate much based on increases in supply.

Besides the poont is moot because oil prices are determined on Wall Street.

Hth Damone.

You can stop embarrassing yourself.

When did you decide to go the self parody route?

Looks like you're starting to miss those Middlebury chicks. When do you go back east?

CollegeDoog said:

What does our oil industry expert @Mad_son have to say about it?

With out responding to anyone point by point...

Drilling for domestic oil does not have a major impact on domestic oil prices. What it does for us is create jobs + stimulate associated industries and decrease the trade deficit. As noted the oil market is a huge global market and small changes to production have very little bearing. This is much bigger than Enron, North Dakota, or Wall Street. We would need to quit our current capitalistic ways if we wanted to have cheaper oil here. In Venezuela for example the reason oil prices are so cheap is because their national oil company makes a lot of money and oil price subsidies are how the citizens are repaid for the governments profit on natural resources. We do not have a national oil company in the US however. Don't get me wrong - the US does make money when companies produce our oil however it is not just hand over fist profits. Also our production relative to our population is much smaller than say, any OPEC country.

Another point of note is that drilling now means oil later. To develop a new oil field is a major endeavor and takes years of planning with massive up-front capital investment. It can take up to a decade from a successful exploration discovery to actually have first production oil. Once you have a discovery you still need to appraise a field to make sure it will be actually be economic to develop a platform, build tie-back facilities, or whatever you will need to do to produce. Assuming you found enough oil you then still have to commission and build all of your hardware, mobilize, etc. New oil developments are long term investments and not quick production boosts. Companies already want to develop fields as quickly as possible so they are already drilling as fast as what makes economic sense. Drilling the strategic oil reserve would be a really stupid decision because it would not provide immediate decreases in costs at the pump because 1) it will never affect the price at the pump 2) it will take years before production even occurs 3) then we wouldn't have our STRATEGIC RESERVE. It would also be a shame to destroy that wilderness. The real beneficiary would be the Alaskan economy. That is why Palin was trying to sell and spin that so hard. She was going to get her personal payday.

What can affect local prices is natural gas. Natural gas markets are local and we have much greater natural gas resource than we do oil. Honestly I don't think there is a big future for oil production in the US independent of what fuel we consume. Deep water is getting harder, we've done a good job of accessing conventional resources on shore so other than some opportunities in FL and CA we're stuck with long term depletion of onshore fields and unconventionals... which may not be as good as once thought. Even with possible over estimates in natural gas we still have a lot. If we want to use hydrocarbons in the future we will want to do it with natural gas. Depending on the future of LNG things could change (as in the commodity could be a global market, it could be more energy dense, etc) but that is something we have that can drive our energy costs.

No matter how we do it, we need to produce energy in the future. The world will require more energy and it is better to make it for consumption and sale than it is to buy. For the sake of the future generations (and really current younger generations) we need to stop burning hydrocarbons. We clearly can't quit oil cold turkey, but we need to be easing our way off of it and making serious developments in our energy and transportation infrastructures. It is getting ever more expensive and it is damaging our environment in long term ways that will have negative impacts to huge populations. Trying to ramp up production now won't have any immediate impacts on energy prices and neither will investment in alternative energy sources - there is just no quick fix. All solutions are long term.