Cenk Uygur writes in If We Drill in the U.S., We Don’t Get the Oil:
One thing has been driving me crazy about this drilling debate — everyone seems to assume that if we drill for oil in the US, that we will get the oil. And hence, we won’t be dependent on foreign oil anymore. But we won’t get anything, Exxon-Mobil will.
The oil that comes from that drilling will not be United States property (Republicans aren’t suggesting we nationalize the oil companies, are they?). It will be the property of whichever oil company got the rights to that contract. They can then sell it to whoever they like — and they will. They will sell it on the world market, so the Chinese will have just as much access to the oil that comes out of the coast of Florida as we will.
The Democrats have done a decent job of beating back the argument that this will effect prices in the short run, or even in the long run. But no one has addressed the point above. The Republicans make it seem like we won’t be dependent on foreign oil — and that prices will go down in the US — if we have our own oil. But it won’t be ours. And it will be sold on the world market, so its effect on global oil prices will be even smaller.
When we ask the question of whether there should be drilling off the coast of Florida or in the Arctic National Wildlife Refuge, we should ask the question this way — would you be comfortable with the Chinese or the Germans or Russians or the Saudis drilling on American land? Because for all intents and purposes, they will be.
Large multi-national firms like Exxon-Mobil are not US property. They sell to the world and their allegiance is to corporate profits. So, when they drill, they drill for the whole world, not just us. Some might find that heart-warming, but it certainly has nothing to do with the US having more oil or lower prices.
(hat tip: Grouchy’s Liberaltopia)
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August 16, 2008 at 5:01 am
Orion
Well, usually in a market economy, increasing the supply causes a decrease in price.
Kinda like an increase in price will create a decrease in demand – as we’ve just seen happen.
Orion
August 16, 2008 at 7:39 am
meatbrain
When, precisely, would the supply increase?
By how much, precisely, would the price decrease?
Jeff Burhans (aka “Orion”) doesn’t say. Must be an easy life when one is as ignorant as Burhans is.
August 16, 2008 at 3:34 pm
Orion
*boggled* You’re asking for specifics when I state a general principle?
I don’t even know HOW to address this one – You’re once again having a real problem with definitions. If one increases sources and volume of supply, um…supply increases. Increase means ‘goes up’ or ‘more’. So, let me try this with smaller words for you:
More wells pump more oil. More oil to sell means prices go down. Law of Supply and Demand.
I bet you’re a riot in Econ class in High School. You’ll have more fun in college where they seem to enjoy the failed Soviet model of central-control.
Whenever we chat, I keep getting the feeling that English isn’t a language you’re terribly skilled with, or that you’re about 13 years-old and think you’re somehow being clever.
Orion
August 16, 2008 at 3:54 pm
meatbrain
And we find another topic that Jeff Burhans is afraid to discuss.
I’ll ask again, so that he can run away from the questions again.
When, precisely, would the supply increase?
By how much, precisely, would the price decrease?
August 16, 2008 at 4:57 pm
Orion
Ah, Meaty, you can always put a smile on my face. Thanks, buddy.
Hmmm….Let me consult THE TABLES. – The supply will increase at 11:42AM on Sunday, August 21st, 2011.
Price will decrease by exactly 12 quatloons per hogshead.
Orion
August 16, 2008 at 5:12 pm
meatbrain
Jeff Burhans has once again chosen to remain ignorant, and to advertise the fact. The Bush Administration has already determined the effects on supply and price from drilling in the currently proscribed areas.
Jeff Burhans does not know this, and does not want to know this. He prefers to remain ignorant. I thank him for his cooperation in demonstrating just how ignorant he is.
August 16, 2008 at 6:16 pm
Orion
Always glad to help out a buddy! Admit it. You’re just unhappy that I gave you such a precise, specific, and obviously correct answer.
Orion
August 17, 2008 at 12:34 pm
meatbrain
Still waiting for a truthful answer from Jeff Burhans: Should drilling be permitted in the currently proscribed offshore areas, when would the supply increase? By how much would the price decrease?
The answers are known. Burhans is simply too stupid to go and find them.
August 17, 2008 at 2:41 pm
Orion
Yes, drilling should be permitted in some of the proscribed (Ooo! You’ve been using your dictionary! Good lad!) offshore areas as well as ANWAR and other domestic fields. The supply would increase immediately after the wells were brought on-line.
See, when you ADD to the pool of something (like the pun there?), it INCREASES…that’s what ‘increases’ means. But, I imagine that you are a Big Oil Conspiracy believer and are quite sure that the evil Trilateral Commission will shut down other production in order to keep levels exactly where they are…
Orion
August 17, 2008 at 5:57 pm
meatbrain
Burhans again flees from the question. The Bush Administration has determined specifically when the oil supply would increase. Burhans is simply too stupid to go and find out when that would be.
Burhans completely ignores the question: “By how much would the price decrease?”
Burhans is simply too gutless to conduct a debate based on facts.
August 18, 2008 at 12:44 am
Orion
OOO! YOU LIE!! LIE! LIE! LIE!
I answered this one!
MEATBRAIN IS A LIAR! LIAR! LIAR! PANTS ON FIRE!
Out of curiosity, do you understand what a general principle is?
Orion
August 18, 2008 at 6:47 am
meatbrain
The “quatloo” is a fictional currency. Burhans’ “answer” is mere evasion.
If drilling were to be permitted in the currently proscribed offshore areas, when would the supply of oil increase? By how much would the price of oil decrease?
Burhans is too gutless to admit that he does not know the answers to these questions, and too fucking stupid to find those answers. Jeff Burhans is incapable of participating in a fact-based discussion. His tactics consist of lies, evasions, and ad hominem attacks.
August 18, 2008 at 2:58 pm
Orion
How DARE you CONTINUE your LIES and EVASIONS by suggesting that Star Trek is mere FICTION! Next you’ll deny that Obama is THE ONE! Blasphemer!
Meaty, as I keep telling you (please – either learn to read or have someone help you sound the words out and explain them to you):
The supply of oil will increase immediately after the wells are brought on-line. That’s what ‘more’ and ‘increase’ mean, dear one. If I had my druthers, I’d have ‘em build more domestic refineries as well.
As to price change, despite many, many governments’ and economists’ efforts to the contrary, cannot be specifically predicted. That’s why it’s called ‘speculating’. (A fancy word for ‘guessing with money on it’ or ‘gambling’). However, THE GENERAL PRINCIPLE I referred to states that, in general, when supply increases, prices decrease. That’s worked for a few thousand years, so I tend to think it’s likely to work again. Kinda like, when price increases, demand decreases – as we’ve seen this summer.
Further, as I’ve said over and over and over again, having more domestic sources of oil is a GOOD thing and would tend to decrease our reliance on foreign sources of oil – particularly in turbulent times. See, whether we get a drop of that oil or not, it’s a source we CAN rely on if we NEED it due to war or other emergency. It gives us a CHOICE. Right now, our options are very limited. Unless you feel like invading Venezuela or Mexico.
Orion
August 18, 2008 at 3:28 pm
meatbrain
If drilling were to be permitted in the currently proscribed offshore areas, when would the supply of oil increase?
The answer to that is not “after the wells are brought on-line”. It’s an actual year. Burhans is too fucking stupid to go find the answer.
By how much would the price of oil decrease?
Burhans is too fucking stupid to go find the answer.
Jeff Burhans is incapable of participating in a fact-based discussion. His tactics consist of lies, evasions, and ad hominem attacks.
August 19, 2008 at 2:36 am
Orion
No, the actual year is a government prediction based upon the effects of the wells upon the global supply – See, oil is sold on a global marketplace, so it’s more than a little tricky to accurately predict net effects on the system by small variations in input, especially with near universal increases in demand by all consumers. This is where speculators make all their money. That’s also why it’s called speculation. I love government studies and predictions as much as the next man, but jeez, you seem to think they’re handed down from on-high by the Archangel Gore…
I’ll try again to explain what ‘more’ means. If I have one well producing oil and I now drill a SECOND well and it starts producing oil, I have ‘more’ than when I started. I have ‘more’ as soon as that second well starts producing oil.
Let me try it even more simply in the hopes that I’ll finally delve down far enough to reach a level where even you can comprehend it: I have ONE apple. Phil hands me ANOTHER apple. Now I have MORE apples! See? (By this time, even my cat understands the concept and she’s been dead for almost a year)
No one on Earth knows how much the price will decrease. That’s why it’s a general principle. You can find predictions until you’re blue in the face. Every speculator will have a different algorithm that he or she uses to try to predict the aggregate effect upon price by changes in supply. But the GENERAL effect is that MORE supply will produce a DECREASE in price. Just as predicted interruptions in supply cause INCREASES (that’s another big word for ‘more’, Meaty) in price. That’s how the market generally works, lad. See the link on ‘The Law of Supply and Demand’ above.
However, as I’ve said before, opening up more areas to drilling (e.g. offshore, ANWAR, Bakken Formation) and building more refineries not only produces an increase in domestic supply, it reduces reliance on foreign sources in times of conflict. – This decreases the effects OPEC and other foreign powers have on the US by restricting supply. And hopefully, if someone gets a brain, it means the US can start buying more oil from domestic producers instead of foreign ones and we get to keep our treasure HERE. But that’ll take better government than we’re likely to get for a very long time. I’d love to see decreases in domestic demand as well (e.g. pushing hybrid and electric vehicles – only about 23% of our electricty is generated by natural gas and oil) as an increase in alternate sources of electrical generation (e.g. solar, wind, nuclear – esp nuclear)
I’m going to send in your following comments to Webster’s to be used as an example in their definition of ‘Irony’:
You are my hero, Meaty.
Orion
November 24, 2008 at 9:35 pm
The Master
At $1.63 a gallon today and dropping, I’d say that the argument isn’t where but when….might not have to worry though as some rig development is being shut down as the investment or continued investment to complete isn’t supported by the revenue plan at the reduced price. The real opportunity is NG. We have it, it’s relatively easy to get at and its dollars into our economy rather than the OPEC coffers. The spin on that is less dollars to fund radical thinking and action in those areas as well as in Russia….let it be a cold winter in Minsk!!