Oil prices likely to double, says study

[Latinoman]

If you feel we should be less reliable of foreign oil and for that reason you are championing ANWR drilling...then I see your point. In fact, I would even venture to say that you might have a very good one. I mean...energy security is a SERIOUS issue. I feel crude oil shortage is worst than high prices. If those foreign nations we rely on decide to stop sending crude to the U.S., then we could be royally screwed. Now, I am not saying we should drill in ANWR and I am not saying with shouldn't. I am simply saying in that case your point would be valid.

But if you are championing ANWR drilling under the hope oil and gasoline prices go down...then you are clueless about how the market works. The government does not control prices...the market does. Always remember that.

Do you want a real solution to the problem? Become less reliable to fossil fuel. What does that do?

That kill two birds with one shot: a) will make us less reliable to oil (foreign or otherwise) solving the energy security issue, and b) will solve the issue of dealing with high prices of oil and refined distillates (such as gasoline and diesel).

Doesn't that make sense?

 

[logic1]

Most of your statements are correct. It is a free market based on supply and demand.

The issue I was trying to point out is ANWR is goverment owned and to my knowlege has a vast supply of oil reserves. If the land were privatly owned the reserves would have been tapped by now driving the supply up and the demand down. We would come close to not depending on outside oil and OPEC, good ridance. But this cant happen until we tap our reserves.

Almost all coal comes from privately owned reserves, hence the competition which keeps the price low. It has stayed at relative levels for quite a few years. It is not imported. It is not controlled by OPEC. This is our problem with the oil. The more we produce on our home turf the cheaper it will be.

And yes "some" of the politicians dictate this because they have the say of what goes on with goverment owned lands like ANWR. As unfortunate as this is.

 

[reset]

Don't prices go down when supply goes up?

 

[Latinoman]

Don't prices go down when supply goes up?

ANWAR is not adding to supplies. What ANWAR does is replace the imports from Mexico, Saudi, Canada, Nigeria, Venezuela etc.

And we still have the issue of having the same number of refineries since the early 1970s.

 

[reset]

Well at least do that to stop the dependency. What happens when the other countries demand too much.

And I thought if you built refineries, then we would have more? I guess that's the issue. That we can't build refineries.

 

[Latinoman]

Most of your statements are correct. It is a free market based on supply and demand.

The issue I was trying to point out is ANWR is goverment owned and to my knowlege has a vast supply of oil reserves. If the land were privatly owned the reserves would have been tapped by now driving the supply up and the demand down. We would come close to not depending on outside oil and OPEC, good ridance. But this cant happen until we tap our reserves.

Almost all coal comes from privately owned reserves, hence the competition which keeps the price low. It has stayed at relative levels for quite a few years. It is not imported. It is not controlled by OPEC. This is our problem with the oil. The more we produce on our home turf the cheaper it will be.

And yes "some" of the politicians dictate this because they have the say of what goes on with goverment owned lands like ANWR. As unfortunate as this is.

We have over-abundance of coal and most of everything is switching from coal to oil and natural gas, because it is not environmentally friendly.

The land is government own. All the government can do is LEASE that land. Nothing more and nothing else. The oil companies can charge you whatever they feel people should pay for. Don't kid yourself thinking otherwise.

Also...Canada and Mexico (two of our biggest importers of crude) are not part of the OPEC.

 

[Latinoman]

Well at least do that to stop the dependency. What happens when the other countries demand too much.

And I thought if you built refineries, then we would have more? I guess that's the issue. That we can't build refineries.

Demanding too much is not the issue...the real issue is if they stop sending us their stuff.

I am not disagreeing with you about we becoming more independent. THAT we can probably control (to a degree). But the prices? That's a market issue.

 

[logic1]

Don't prices go down when supply goes up?

Yeap

My point of "supply up and demand down" is in this context.

When supply is up all the suppliers ( different companies) have vast amount of supplies to distribute to the many distibutors who sell to the public. The damand from the distributors is down because of the many places to get the product. They will get it from the cheapest source.

The suppliers look at it as "the demand is down"

 

[Latinoman]

They can build more refineries...but it is an issue of cost. It cost several billions of dollars to build a new refinery. A company would do that investment if they know prices will stay at a certain level for a VERY LONG time (over 20 years) so they can get their return $$$ back.

 

[Latinoman]

Yeap

My point of "supply up and demand down" is in this context.

When supply is up all the suppliers ( different companies) have vast amount of supplies to distribute to the many distibutors who sell to the public. The damand from the distributors is down because of the many places to get the product. They will get it from the cheapest source.

The suppliers look at it as "the demand is down"

There is not shortage of gasoline and not shortages of oil.

 

[Latinoman]

The Government responsibility is energy security to the citizens of the U.S.

The oil companies responsibility is to make $$$ for their stock holders.

 

[logic1]

There is not shortage of gasoline and not shortages of oil.

I believe this also. I think the problem is OPEC controls this by the amount of oil they let certains coutries produce. They can make the market look like there is a shortage.

 

[Latinoman]

I believe this also. I think the problem is OPEC controls this by the amount of oil they let certains coutries produce. They can make the market look like there is a shortage.

Absolutely. That is one of the problems when it comes to crude oil prices....I agree. No doubt about it.

But here is the issue...let's say we drill ANWR and become independent. Let's assume that we don't rely on foreign oil. No more OPEC, no more Canada, no more Mexico.

Do you think the oil companies (Chevron, Exxon, BP, Connoco Philips, etc.) are going to invest billions of dollars in producing crude they can only sell at WAY BELOW market value to our consumers, when they can drill all over the World and make a lot more money? That will be the issue. Oil companies are not in this business for the purpose of lowering prices for consumers...they are not in this business for patriotic reasons either (and understandable so), they ARE in this business for the purpose of making $$$ (lot of it) for their stock holders (which happen to be from all over the World).

But let's say the government forces the industry to sell their crude WAY below global market value (and for that matter force them NOT to export our crude)...what incentive will the oil industry have to drill? What incentive they will have for production? None.

Remember...the oil companies responsible for exploration and production are not "nationalized" companies in the U.S.. They are companies-for-profit. Leasing lands to them won't lower oil prices...unless the government force them to lower the prices (which goes against our free market principles).

 

[logic1]

Very good points Latinoman. I can see where you are coming from.

My hopes and thoughts would be that the US capitilist system would kick in and new competition would go up against the main stay oil companies. It would take some companies with big bucks. I think tapping new reserves in the US might encourage this.

You are right on the refinaries, I believe the evorimentalist put a stop to these back in the 70's or 80's. We need new ones.

 

[Latinoman]

Okay...you guys are making me think. Hahaha.

Anyways...the questions I personally have are:

1- Do we have enough crude reserves in ANWR to be independent of foreign oil? If so, for how many years? Let's say we have enough to be independent for 10 years. Would that be worth the risk put on the caribu and whatever animals live there or the environment? Also, how long will it take for the oil to be explored and produced (5 years? 10 years?) before it is sent to the market? How much $$$ will it cost the oil companies to do that investement and what is the rate of return that they expect? [Energy Security]

2- Should we force anyone drilling in American soil to sell the crude domestically and at a considerably lower price than the actual market (global) value? [Price control]

3- Let's say we manage to drill ANWR, to become independent of foreign oil, and we also manage to force the oil companies drilling in American soil to sell the oil at considerably lower price than market value...what's next? I mean, how long we will remain independent from foreign oil? Let's say is ten years...would ten years be enough time for us to go into hard core scientific research and development of other means of energy to the point that we should rely on fossil energy considerably less while protecting the environment? [The Future]

Those would be my questions. But that is my humble opinion...which can change day to day as I am very open minded. Heck...I changed my mind TODAY about ANWR as I didn't like the idea...but after debating this point with you guys...my mind has changed to a more open minded one.

 

[Latinoman]

Dp.

 

[Latinoman]

Very good points Latinoman. I can see where you are coming from.

My hopes and thoughts would be that the US capitilist system would kick in and new competition would go up against the main stay oil companies. It would take some companies with big bucks. I think tapping new reserves in the US might encourage this.

Thanks man! Sorry it took me this long to illustrate the point. It occurred to me that the best way was to separte "energy security" from "energy costs". And then eventually merge them together.

Actually, I am glad I debated with you guys, because some of my past opinions has been adjusted (in particular the ANWR issue).

 

[Latinoman]

I will give you (logic) and Reset reputation points for the debate. Very good, guys.

 

[logic1]

Good questions..... You almost need the crystal ball!!

My opinion. In 20 years the demand for crude oil will be cut in half. With the technology, and inovative people we have in the world today they will find some alternative power sources, possibly on the synthetic side. If this would be the case I think there is enough oil on US soil to sustain us until this is accomplished.

I might be dreaming, but.....................

 

[ketostix]

Don't prices go down when supply goes up?

No not with oil because they are just speculating and driving the prices up independent of real supply and demand. This was my main point.