IBD poll: Drill here, drill now
posted at 8:07 am on July 15, 2008 by Ed Morrissey
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A new poll commissioned by Investors Business Daily finds overwhelming majorities in favor of increased drilling and domestic production of oil. By a 3-1 margin, Americans identify runaway fuel prices as a bigger problem than global warming, and they want action taken immediately to address it. Even ANWR is on the table, although not by much:
The poll of 920 adults taken last week shows that 73% think “fuel prices at the pump” are a bigger problem for the country than climate change, the new term for global warming. Only 23% say climate change is more important.
The sentiment prevails across the board — among men and women, old and young, rich and poor, and Republicans, independents and Democrats, two-thirds of whom say gas prices are more important.
Support for offshore drilling and oil shale development is also broad-based, with the former favored by 64% of respondents and the latter by 65%.
The results suggest President Bush has strong public support as he puts pressure on Congress to back more exploration for oil.
While the numbers for drilling in the OCS and in the interior for shale transcend partisan and gender divisions, drilling in ANWR receives a bare plurality, 47-43. That indicates a political risk in pressing for drilling at that point, especially among women and working-class adults. The split occurs across partisan lines, and women oppose it 46-39.
The numbers indicate that McCain may have the right idea by keeping ANWR off the table. Including it now might give opponents a wedge to obstruct the rest of the drilling efforts and unnecessarily handicap efforts in the near term. The better strategy would be to leave ANWR off the table for the moment and ensure that the other initiatives succeed. Drilling proponents have a great hand to play in an election year without ANWR, and that option can get addressed at a later date.
President Bush took a big step yesterday in lifting the executive order banning off-shore drilling. Nancy Pelosi took a big step, too — backwards. As IBD notes, instead of looking for long-term solutions, she’s demanding that the US deplete its Strategic Reserve:
Despite polls showing Americans in favor of drilling more oil from America’s huge untapped supplies, Pelosi won’t allow it. She just wants to empty our Strategic Petroleum Reserve for a short-term fix to get through Election Day.
It’s an irresponsible suggestion, signaling not only an ignorance of how the economy works but also a willingness to place the nation at risk in the case of emergency.
Last Tuesday, Pelosi sent a letter to President Bush urging him to release a “small portion” of the nation’s 706 million barrels of strategic-reserve oil to bring down prices. Regardless of how one feels about whether reserves should be held at all, two big problems stand out with Pelosi’s tiny demand.
The proposal will leave us with little or no strategic reserve in case of war or natural disaster in the oil-producing regions. The Strategic Reserve doesn’t exist so that politicians can artificially lower gas prices before an election. It exists to protect the military capabilities of the nation in time of distress. Imagine, if you will, the outcry if Bush had started selling off the Strategic Reserve in September 2004 to lower prices before his re-election contest with John Kerry.
Second, as IBD points out, Pelosi has admitted that the issue is one of supply. That won’t get solved by selling off the SR; in fact, it will make the problem worse later, when the US has to refill the SR. The only solution for a supply crisis is to find more long-term supply sources — and we have massive resources here in the US that can fill that role.
The Democrats have painted themselves into a corner. Their anti-production policies have led the nation into crisis, and they could still lose this election if they continue to obstinately block long-term solutions to it. Instead, they’re offering gimmickry.
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OPEC doesn’t set price. From time to time they have a strong impact on prices, but they do not control it. If they did, prices would never have dropped to near $10/barrel a few years ago.
And you seem to think that this is a good thing.
Neither is energy.
You should be able to drill more oil without a govt fiat saying it’s ok.
You really need to work on your reading comprehension. You already look like an idiot, no need piling ridicule on top of it.
I said the oil companies should be allowed to buy, not that they did.
MarkTheGreat on July 15, 2008 at 12:06 PM
I capiche, it’s just that you haven’t demonstrated this to be a fact. Just your paranoid fantasy.
People are buying different types of cars. The profit profile of the automakers was set up assuming a different mix of cars. Those automakers that didn’t let their unions limit their flexibility are doing fine, and are taking market share away from those that did.
The auto market is adjusting, it is not melting down. Not even close.
When you have the facts, logic, and history on your side, it’s hard not to get smug.
MarkTheGreat on July 15, 2008 at 12:09 PM
I was just using “ballpark” numbers to show the huge disparity in “return on investment”
franksalterego on July 15, 2008 at 12:15 PM
At the end of the day, Oil Companies aren’t gouging at the pump, they have to make up the difference from the other 21 gallons being turned into other products.
franksalterego on July 15, 2008 at 11:48 AM
I goggled it this time so here is the crack spread for oil:
The average cracking refinery is expected to convert three barrels of light sweet crude into two barrels of gasoline and one barrel of diesel.
gas is trading at 142.80/bl
diesel is trading at 158.76/bl
so for every bll of oil the oil companies are making about $148.12 at the wholesale level. this does not factor costs ect. If they pay the going rate for crude of $145/bll then they are making about $3.12 on a bll of refined product.
since the oil companies drill a percentage of their product the cost for a bll of oil is less to them; then say a refiner that has to buy their product on the open market.
the refiners being the pure play are still making money and not going out of business. Gas would be more if the refiners could pass the cost along but we are already showing about a 3-4% reduction in demand. Any increase in price at these levels is impacting demand more than in the past as critical levels of economic activity are being reached. Thus the cost is being held quasi stable over the last couple of weeks. Moving up by pennies instead of nickels and dimes.
the refiners stocks are reflecting this decrease in profit margin. The retail stocks are reflecting the decrease in profits and many are showing actuall losses. This says that while the refiners are making money retail isn’t and thus gas is not too cheap.
unseen on July 15, 2008 at 12:19 PM
That is disengenuious. No one knows what is finite and what is not when it comes to a natural resource. Don’t speculate… it leads to more speculation.
upinak on July 15, 2008 at 12:20 PM
where is your link?
And on top of it diesel is a byproduct of a different oil product, do you know what it is?
upinak on July 15, 2008 at 12:21 PM
Doy
Weebork on July 15, 2008 at 12:24 PM
And just what do you think the Saudi’s and such are doing with all those dollars? Throwing them in the fireplace to keep warm?
No, they are buying things. And many of those things that they are buying are supplied by US companies.
MarkTheGreat on July 15, 2008 at 11:59 AM
Last I looked they were building entire cities in the dessert. If you want to pay tfro them to be able to do that more power to you. I would rather pay for our own cities to be build or hell I would settle for our bridges to not fall down while we are driving on them.
unseen on July 15, 2008 at 12:26 PM
That’s ludicrous on it’s face.
That would mean, there’s no Kerosine, no Butane, no Propane, no Motor Oil, or any other by-products in a barrel of oil.
franksalterego on July 15, 2008 at 12:26 PM
unseen doesn’t understand the byproducts of oil… nor will it provide the link of the information.
Does that give you enough information?
upinak on July 15, 2008 at 12:30 PM
OPEC doesn’t set price.
ROLFLMAO….you are clueless. You think they have production targets for the hell of it. OPEC controls about 40-50% of the crude in the world. Of course they control where prices are. If OPEC came out to tommorrow and said they were cutting production by a million blls per day oil would be at $200 by wed. Don’t control prices…..LOL. the lower prices were for a number of reason the main reason being that some memeber of Opec pumped more oil to help pay for the cost of the first gulf at the same time the US was going into a recession. the added supply at the exact wrong time caused a glut of oil on the market thus the price fell. As long as OPEC stands together they control the price.
The US oil companies follow OPEC lead. They can pump oil for far less than $145/bl I think I read it cost XOM $20/bl to pump and ship the oil. so XOM could sell the oil for anything above $20 and make a profit. They being a capitlistic compnay will sell their product to the highest bidder and thus $145/bl.
The laws of supply and demand have little to do with the oil market with government regulation, opec cartel, government subsizes from other coubntries, taxes, royalties etc, margin rates etc.
unseen on July 15, 2008 at 12:35 PM
This is a bit closer to reality:
84% by volume of the hydrocarbons present in petroleum is converted into energy-rich fuels (petroleum-based fuels), including gasoline, diesel, jet, heating, and other fuel oils, and liquefied petroleum gas.
Petroleum is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics; the 16% not used for energy production is converted into these other materials.
–Wikipedia
franksalterego on July 15, 2008 at 12:36 PM
where is your link?
And on top of it diesel is a byproduct of a different oil product, do you know what it is?
upinak on July 15, 2008 at 12:21 PM
sorry.. forget the link. haven’t read the whole thing yet just did a quick read and simple calulations
http://seekingalpha.com/article/81720-tracking-crack-spreads
unseen on July 15, 2008 at 12:37 PM
It’s reality.
So how do you know there are enough natural resources to make the infinite number of cars you were speculating about earlier?
MarkTheGreat on July 15, 2008 at 12:41 PM
Are you really this ignorant? You are making this way to easy.
Where do you think they are getting the supplies to make those buildings?
Where do you think they are getting the equipment to make those buildings?
Where do you think they are getting the material to put into those buildings?
Where do you think they are getting the workers to build those buildings?
Come on, for once, think about something before you blurt out an answer.
MarkTheGreat on July 15, 2008 at 12:44 PM
I think, this was the source.
franksalterego on July 15, 2008 at 12:45 PM
I never said that OPEC had no impact on oil prices, I said they don’t control it.
Yes they have production targets, and their members routinely cheat on those targets.
Try reading a little past the end of your comic books for once.
MarkTheGreat on July 15, 2008 at 12:45 PM
OPEC can only control so much, what they are controling at this time is flow which is the problem.
But there is a difference and a repeat offender effect. I am not sure of your age, but this is very much how the recession started in the 80’s. But this is more on a world wide scale now. The recession also started due to one major item, the online start of a couple Nuclear PP in the States. In which oil, here, plumeted to 10 a barrel. I remember it very well… due to Alaska becoming a ghost State.
But with that said, if Nuclear upstarted anywhere in the US within a 5 yr period.. Coal and Natural gas will plummet. As well as the oil, but not down to 10 like it was…. I estimate more like 60 - 80 a bbl.
becareful of wiki… it is not totally correct as they try not to make fertilizers and pesticides from Oil.. and more Natural Gas now. That is very old information.
As for the formula on here. it is good BUT it is a gross estimate of a What if.. not the true price due to the fact many different areas of the global sell their oil at different prices. Alaska crude is going for (last I checked) 138.00 a bbl. Not far off but still enough to make a difference. Please keep that in mind.
upinak on July 15, 2008 at 12:50 PM
MarkTheGreat on July 15, 2008 at 12:44 PM
You really don’t know do you? I feel sorry for you. Exports led by a cheap dollar will not improve this economy. The question is simple. would you rather have our present economic GDP or would you like to have economic output like this:
Amid a forest of cranes, towers and beams rising from the desert, more than 38,000 workers from China, India, Turkey and beyond have been toiling for two years in unforgiving conditions - often in temperatures exceeding 100 degrees - to complete one of the world’s largest petrochemical plants in record time.
By the end of the year, this huge city of steel at the edge of the Red Sea will take its place as a cog of globalization: Plastics produced here will be used to make televisions in Japan, cell phones in China and thousands of other products to be sold in the United States and Europe. Construction costs at the plant, which spreads over 8 square miles, have doubled to $10 billion because of shortages in materials and labor. The amount of steel being used is 10 times the weight of the Eiffel Tower.
“I’ve worked on many big things in my life, but I’ve never worked on anything this big,” an American project manager said during a bus tour of the project, called Petro Rabigh, a joint venture of the state-run oil company Saudi Aramco and Sumitomo Chemical of Japan.
Size isn’t the only consideration. The project is Saudi Arabia’s boldest bet yet that this oil-rich kingdom can transform itself into an industrial powerhouse. The plant is part of a $500 billion investment program to build new cities, create millions of jobs and diversify the economy away from petroleum exports over the next two decades.
“The Saudi economy was in idle mode for 20 years,” said John Sfakianakis, the chief economist at SABB, formerly known as the Saudi British Bank, who is in Riyadh, the Saudi capital. “Today, the feeling here is, ‘We’ve won the lottery; let’s not waste it.’ ”
The kingdom’s lofty economic goals would have been unthinkable without the jump in energy prices that has filled the coffers of oil producers. Oil prices have quadrupled since 2002 and reached $100 a barrel in New York this month. Persian Gulf countries earned $1.5 trillion in oil revenue from 2002 to 2006, twice as much as in the previous five-year period, according to the Institute of International Finance, a global association of banks that is based in Washington. As the top exporter, Saudi Arabia has been the main beneficiary.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/01/27/MNHVUIAEB.DTL
Exit question. what happens to all our “exports” once the plants are built over in China and Saudi Arabia?
unseen on July 15, 2008 at 12:52 PM
Thanks, unseen, that is exactly what I meant. If the other guy had read it, he would have seen where I stated wait for a better time. We can’t do it all immediately, so throw the fence sitters a bone, then when the time is right, and we prove that drilling is “safe”, then we take ANWR.
Margart Thatcher was once asked why Bosnia and not the Sudan. She answered, you choose the battles you can win, that builds the strength to take on the more challenging battles. I think I rely on people’s wisdom like Lady Thatcher, more then some others.
right2bright on July 15, 2008 at 12:55 PM
No it actually is NOT reality. They just opened up 3 oil fields here in Alaska, this week actually. LOL, so tell me how Finite the Oil is (oh PLEASE use the Bell Curve and Peak Oil BS if you MUST) on the Finite resources of Oil and Coal as well as Natural Gas when they keep finding more pools, fields, etc.
upinak on July 15, 2008 at 12:58 PM
As for the formula on here. it is good BUT it is a gross estimate of a What if.. not the true price due to the fact many different areas of the global sell their oil at different prices. Alaska crude is going for (last I checked) 138.00 a bbl. Not far off but still enough to make a difference. Please keep that in mind.
upinak on July 15, 2008 at 12:50 PM
Like I said quick read over and simple calulations to further the discussion nothing more.
I estimate more like 60 - 80 a bbl.
I would agree. For the simple reason that the new production sites like off shore deep drilling and the oil sands demand that oil be around that price for it to be profitable. It is also a price point where alternitive fuels will find it hard to make a profit.
As far as OPEc controlling the flow i.e supply. It tends to set price as long as demand is there. True if we face a massive shift in demand from oil OPEC power to effect price will be less. the rest of the world may not follow suit and reduce output as much. It is during times of peak demand that OPEC’s true pricing power comes into play.
unseen on July 15, 2008 at 1:01 PM
But we are so close to ANWR… Hell I can taste it.
But with that said, other nations need to open or reopen their areas. Siberia is RICH in oil pools that have never been tapped. Very much like Alaska’s areas. Also Northern parts of Russia have been shut down, due to Putin’s claim to nationalize Oil for his country only and charge high for natural Gas and Oil that is requested via other countires. Russia is a mess.
There is so much out there that hasn’t been discovered… why sit on it? I know why Russia is… but is it going to hurt them or us is the question in the end.
upinak on July 15, 2008 at 1:02 PM
think I rely on people’s wisdom like Lady Thatcher, more then some others.
right2bright on July 15, 2008 at 12:55 PM
not bad advice
unseen on July 15, 2008 at 1:02 PM
There is so much out there that hasn’t been discovered… why sit on it? I know why Russia is… but is it going to hurt them or us is the question in the end.
upinak on July 15, 2008 at 1:02 PM
I think it will hurt them in the end if it doesn’t destroy us in the process.
unseen on July 15, 2008 at 1:05 PM
unseen I do not believe in peak demand. Right now the U.S. is not at Peak, it is China, followed by India then the U.S. (which is still under guise as to figures).
I believe in the flux and flood senerio. The U.S. is in a Flux.. China and India is in a flood. What I wonder is when their Governments will make their people pay the taxes associated, which will put them in a Flux not a flood so much. Then who will be the next Flood?
Awww the questions in my head!
upinak on July 15, 2008 at 1:07 PM
Exactly, why would Putin hurt his own Economy (at that time and 3 yrs ago or so when he did this)…. so to hurt everyone else and become that Super Power.
As much as the Middle East Scares me…. I worry more about Russia right now and their Puppets!
upinak on July 15, 2008 at 1:09 PM
My point being, of course, was to show there are other products in crude, besides just gasoline and diesel.
The percentages differ widely, depending on who is doing the refining.
franksalterego on July 15, 2008 at 1:14 PM
Frank, don’t get me wrong as i understood you. I am just saying that whomever has done the Wiki’s on oil and gas is old time. The information is old and out of date. BUT it isn’t always wrong.
But diesel is a byproduct of kerosene. Not many people realize that.
upinak on July 15, 2008 at 1:18 PM
As much as the Middle East Scares me…. I worry more about Russia right now and their Puppets!
upinak on July 15, 2008 at 1:09 PM
The cold war it appears is far from over. i wonder if like iran it will take the USa 30 years to figure out we are at war.
As far as the flux and flood. and peak demand. at “peak demand” I just meant that on a global basis the demand is equalling supply or close to it. as long as supply is “tight” be it natural or artifical oil prices will stay high. And thus why I support drilling as well as other forms of energy production so that we can expand our economy with unlimited amounts of energy
The flux and flood is a term I’m not familar with.
unseen on July 15, 2008 at 1:18 PM
As usual unseen, you are guilty of first order thinking. Assuming you are guilty of thinking at all.
Now the Saudis have used their dollars to buy some things from the US, and they have used them to buy workers and things from other countries. Now what do those people and countries use with the dollars that they now have. Dollar’s don’t sit in bank accounts, they get used.
If you will break your usual pattern and actually think this through, you will discover that those dollars have no choice but to eventually return to the US.
MarkTheGreat on July 15, 2008 at 1:23 PM
OK, not really for big government solutions… but…
Question, could Mexico, Canada, and the USA be energy and OIL independent, if we pooled our resources?
Could we in essence, take ourselves OFF the world market, and control prices by creating an agreement NOT to export enrgy outside the zone?
One of the problems we’ve created is that WE helped create the monster which is the World Market… prices are being driven up by Governments who then subsidize energy consumption… and you can’t have a Free market if one side is government controlled.
I know this will play in the whole NAU idea… but…
Romeo13 on July 15, 2008 at 1:23 PM
Flux and Flood is a Oil Econ Analyst term. They do not use it often but it is a good phrase and term to associate yourself with.
upinak on July 15, 2008 at 1:24 PM
upinak,
Please read more closely, I’m the one arguing that resources are not finite. You mean to be blasting the other guy.
MarkTheGreat on July 15, 2008 at 1:24 PM
There are more fields in the Canadian Arctic, and there appear to be many fields under the Arctic ocean.
China has been finding lots of oil in the China sea.
Brazil has recently made a huge find off it’s coast.
Mexico recently made a big find in the Gulf of Mexico.
Beyond that, it’s not a bright idea to concentrate on oil alone. There are other fossil fuels, and there are other fuels in general.
As I stated before, energy is not a finite resource.
MarkTheGreat on July 15, 2008 at 1:26 PM
If you will break your usual pattern and actually think this through, you will discover that those dollars have no choice but to eventually return to the US.
MarkTheGreat on July 15, 2008 at 1:23 PM
Yeah that worked real well for the British empire.
You need to put down the “everything I learned about nations, economics, and Mercantilism, I learned in Kindergarten.” book and start reading some higher level information and up to date information.
unseen on July 15, 2008 at 1:27 PM
Even within the same refinery, percentages of different products can change on a daily basis…Depending on several factors, such as, the type of crude, and supply of each product.
For instance, they may have all their gasoline holding tanks nearly full, and kerosine holding tanks nearly empty…So, they switch the process to make more kerosine and less gasoline.
I used to work in a refinery so, I know a little bit about it.
franksalterego on July 15, 2008 at 1:27 PM
Is we can pool, Columbia and a few other “countries” that would be great. One problem is that there is a anti-opec pact.
http://en.wikipedia.org/wiki/OECD
I hate Wiki, but good enough for now.
upinak on July 15, 2008 at 1:27 PM
Wow…. OK…
It costs me $2.00 to make somthing…. which I then sell for $145.00…
I then spend the money, not just in YOUR store, but the other stores in the area as well….
End result is I have a LOT less money, and everyone else has what I lost…
How can the AMERICAN economy survive when we are exporting BILLIONs of dollars worth of wealth a day???
And I might add, they are also using that wealth to BUY American companies, gaining control over OUR economy… really dumb idea…
Romeo13 on July 15, 2008 at 1:28 PM
Romeo13 on July 15, 2008 at 1:23 PM
Well since the dems are saying they don’t like the oil sands idea and Canada is looking at building a pipeline to the pacific coast to sell the oil sands to China I think it may be a problem.
unseen on July 15, 2008 at 1:29 PM
Romeo13,
What would be the advantage of doing that?
Why is it better to consume only oil we produce, rather than sell Alaska oil to Japan, and buy Mexican oil to replace it?
Even if we were to somehow create such an agreement with Canada and Mexico (what is their incentive to join such a pact?), how do we prevent cheating?
MarkTheGreat on July 15, 2008 at 1:30 PM
unseen,
You actually think I am talking about Mercantalism? Are you really that stupid? Do you even know what the terms you are throwing around really mean?
Mercantalism is what you are proposing. I’m in favor of free trade.
Please, for once, study before spouting.
MarkTheGreat on July 15, 2008 at 1:32 PM
The British Empire was based on the concept of forcing the colonies to provide all of their resources only to the mother country. No trade outside the empire. What brought the system down was the cost of stationing troops throughout the empire.
This is the system that you are proposing. If you can’t see that, then you are even denser than I have been guessing.
MarkTheGreat on July 15, 2008 at 1:33 PM
Simple, the wealth then stays in North America, and does NOT go to help fund Saudi infrastructure.
Every barrel of oil we buy on the world market exports wealth. I’d rather that wealth stayed inside of North America… and with a closed system, we could then have stability in the market.
Right now, India and China are willing to spend HUGE amounts of government capital because they understand that low energy prices are what allows an economy to expand. Problem is that this creates a demand, which is not being met by supply, thus driving up feul costs.
By taking N. America out of the world market, we would also no longer be held hostage to political problems throughout the world… our energy prices would be more stable… which also helps the economy by allowing manufacturers to make longer term plans.
Romeo13 on July 15, 2008 at 1:38 PM
MarkTheGreat on July 15, 2008 at 1:32 PM
You are not that stupid are you?
Mercantalism is what is being practised by our trading partners.
unseen on July 15, 2008 at 1:39 PM
I’m guessing you aren’t old enough to remember the “crisis” with Japan, Taiwan, Korea. There were lots of people making the exact same arguments that you are. We have to lock these countries out of our economies before they buy us out and make us a third world country.
Look around. Did it happen? No, because the proponents of these policies then, are making the same mistake that you are making now. That is, we get poorer when we buy something from another country. Or that we become poorer when people in other countries invest in the US (IE, buy US companies)
When people in other countries invest in the US, it’s a good thing. They are spending money to create jobs in the US. I fail to see how anyone would consider that a recipe for disaster.
Economies ebb, economies flow. Focusing on this quarter’s numbers and forgetting about the big picture is always a mistake. But it is one that individuals with hidden agenda’s always want us to make.
In the 80’s, it was the unions who didn’t want to compete with the Japanese, so they wanted the govt to screw the American consumer by forbidding the buying of Japanese products.
MarkTheGreat on July 15, 2008 at 1:40 PM
Where do you get this information that Alaska is selling to Japan? FYI, Alaska is NOT selling to Japan and it is all refined in California.
The only thing sent “over seas” is, or was before the plant closed due to lack of Natural Gas, was Fertilizer from the Agrium plant.
I hate that stupid rumor! Who ever started that one, is probably the same person who wrote that damn Gull Island oil reserve book! Ugh!!!
upinak on July 15, 2008 at 1:41 PM
unseen,
So what if our competitors are practicing Mercantalism. It only hurts them.
MarkTheGreat on July 15, 2008 at 1:41 PM
What makes you think Bush’s cronies keep their money in America, Romeo?
And hasn’t Texas gotten enough welfare over the last 7+ years?
alphie on July 15, 2008 at 1:42 PM
Romeo13,
You seem to be mistaking dollars for wealth.
Wealth is the goods purchased by dollars, it is not the medium exchange itself.
Locking your economy away from the rest of the world never makes sense. It doesn’t matter if it’s at a national level, a hemispheric level, or a state level. It always makes you poorer.
So what if the Saudi’s use the dollars they get from us to buy material to build their infrastructure. As I pointed out to unseen, those dollars will eventually make their way back to the US in the form of purchases.
MarkTheGreat on July 15, 2008 at 1:44 PM
The reason why Alaskan crude used to go to the West Coast is that there used to be a federal law requiring it.
It makes sense to send Alaskan crude to Japan, since Japan is a lot closer than California is.
MarkTheGreat on July 15, 2008 at 1:45 PM
What brought the system down was the cost of stationing troops throughout the empire.
There you go again.
the cause of the British empire falling was WW2.
As far as keeping a closed system what do you think “free trade” is?
those partners of ours that argee to join the group recives a break on their imports and we recieve a break on our exports. Just because we are trying to expand the closed system to the entire world does not make it less of a closed system.
since our “partners” country’s tax polices and regulations do the same thing as tarrifs the idea of free trade is stupid on its face. and is far from reality. Name me one country that practices total free trade for all its industries. even the USa does not as we resrict the reimpotation of drugs from Canada. England supoorts its helathcare system with taxes so we do not have :”free trade” in that industry etc.
unseen on July 15, 2008 at 1:46 PM
So what if our competitors are practicing Mercantalism. It only hurts them.
MarkTheGreat on July 15, 2008 at 1:41 PM
yeap its doing wonders for us. what was the trade defiect last month? How much debt do we have to the rest of the world? How much power have we lost to control our own laws and ideas of what is right and wrong?
unseen on July 15, 2008 at 1:49 PM
In the 80’s, it was the unions who didn’t want to compete with the Japanese, so they wanted the govt to screw the American consumer by forbidding the buying of Japanese products.
MarkTheGreat on July 15, 2008 at 1:40 PM
yeah that worked out real well. entire states are ghost states. Mi, OH, PA to name a few. Japan has been in a 10 year recession as the boom caused by the opening up of the USA to japaneese productrs caused a massive bust.
unseen on July 15, 2008 at 1:52 PM
Bush’s cronies..?? LMFAO HAHAHHAHAAA! You do realize that the wealthiest people in the Senate and Congress are all democrats and most of them are wealthy due to OIL!
Damn… please research before you type!
upinak on July 15, 2008 at 1:52 PM
So what if the Saudi’s use the dollars they get from us to buy material to build their infrastructure. As I pointed out to unseen, those dollars will eventually make their way back to the US in the form of purchases.
MarkTheGreat on July 15, 2008 at 1:44 PM
yeap giving your enemies the means to defeat you is always the best policy instead of keeping them in poverty. It’s always better to fight a fair fight than have an overwhemling victory.
unseen on July 15, 2008 at 1:56 PM
Im not confusing anything… Dollars is a way of measuring wealth. Its the medium of exchange we use to transfer wealth.
Therefore, a one direction transfer of already existing dollars IS a transfer of wealth. They can buy, we can’t.
Ever hear of a little thing called the Trade Deficit? Thats where we are spending more in their countries, than they are buying from ours… and is a defacto transfer of wealth to their economies.
As long as we are creating more wealth than we export through our deficit, the economy grows, but when you start to export the working capital of the system, which we have been doing for a decade or so, then the government MUST create more dollars to put into YOUR system… problem is that this devalues the dollar, which means you have to spend more dollars for the goods on which your economy now depends.
This is the largest tranfer of “wealth” in history, as we buy for an exhorbinate amount the already existing resource that they are pumping out of the ground, and they are using that wealth to buy things from OTHER countries.
Romeo13 on July 15, 2008 at 1:57 PM
It makes sense to send Alaskan crude to Japan, since Japan is a lot closer than California is.
MarkTheGreat on July 15, 2008 at 1:45 PM
yeah it is so much cheaper to ship oil across the sea then pump it in a pipeline but even if it wasn’t. The idea of national security seems to be an after thought to you.
I would remind you that the world is not all rainbows and campfires. We have real enemies and we have power mad people bent on our demise. We as a country have been protected by our military and our oceans. Just because the world has had a relatively peaceful 70 years does not mean it will remain so. On of the reason we have had peace for the last 70 years is that no country could beat us. even the USSR could only assure each would be destroyed.
If we give our enemies the means to destroy us be it wealth, arms, or money then they will do so in a heartbeat.
unseen on July 15, 2008 at 2:02 PM
SHOW ME PROOF! Where is this information that Alaska is sending Crude to Japan?!?!?!
I happen to work here in Alaska, with Oil and Gas… I want to see where you know it. I want a Link, I want something to show me WTF you are supposedly talking about and convinced is true!
upinak on July 15, 2008 at 2:04 PM
upinak on July 15, 2008 at 2:04 PM
its old but this might be what he was talking about
http://www.ncseonline.org/nle/crsreports/natural/nrgen-25.cfm
unseen on July 15, 2008 at 2:09 PM
I’ve heard of it, though for the life of me I’ve never been able to figure out why allegedly intelligent people would spend more than a few minutes of their lives worrying about it.
We send them dollars. They send us stuff. Just how the heck does that make up poorer?
BTW, don’t concentrate on the trade deficit, that’s a meaningless number. Look instead to the balance of payments number. That includes all of the stuff left out of trade deficit.
Absotely, 100%, completely, wrong. The economy grows when the value of goods in the country grows. Whether by creating them, or trading for them, is irrelevant.
Govt creating new dollars has absolutely nothing to do with whether or not the balance of payments is positive or negative. It has to do with whether govt is spending more than it gets in taxes. That is the ONLY time govt prints money. As to this printing of new dollars creating inflation, you are half right. It will create inflation if the supply of dollars grows faster than the economy is growing. If the supply of dollars is growing slower than the economy, even though it is growing, then the value of the dollar will rise and we will have deflation.
You are guilty of the same first level thinking that plagues unseen.
What do those other countries do with the dollars when they get them? Those dollars are valueless, except for their ability to buy things from the US. Eventually those dollars will make it back to the US. Either in the form of purchases, or in the form of investment. Both of which are good for the US.
MarkTheGreat on July 15, 2008 at 2:10 PM
unseen,
So in order to ensure that the Saudi’s stay poor, you want to impoverish the US. That’s a good strategy.
end sarcasm.
MarkTheGreat on July 15, 2008 at 2:11 PM
As I pointed out to Romeo13, the trade deficit is a meaningless number. It doesn’t hurt us.
Secondly, focusing on the trade deficit instead of the balance of payments is just further evidence that you are a clueless poseur who has no idea what you are talking about.
Finally, you haven’t provided any evidence that the Mercantalism of others is hurting us.
MarkTheGreat on July 15, 2008 at 2:13 PM
MarkTheGreat on July 15, 2008 at 2:10 PM
you are clueless.
unseen on July 15, 2008 at 2:13 PM
MarkTheGreat on July 15, 2008 at 2:11 PM
even more clueless
unseen on July 15, 2008 at 2:14 PM
The reason why companies in MI, OH, PA failed, was because their unions would not let them compete. The same reason why GM is going down the tubes today.
Don’t blame Japan for the problems caused by our own people.
MarkTheGreat on July 15, 2008 at 2:14 PM
It would be cheaper to send the oil by pipeline, if the environmentalists had allowed such a pipeline to be built.
Since it wasn’t, Japan is closer to the Alaskan ports than is California.
As to this fixation you have with enemies. Do you consider anyone who isn’t an American to be an enemy?
Are the Saudi’s our friends. No. Are they our enemies. Sometimes.
Will refusing to trade with the Saudi’s hurt them? No.
Will refusing to trade with the Saudi’s hurt us? Yes.
If you want to concentrate on short range, feel good issues, rather then dealing with the real world, I suggest you rejoin the Democratic party. They specialize in useless, symbolic gestures.
MarkTheGreat on July 15, 2008 at 2:18 PM
I can see that unseen has run out of arguments. Not that he had any valid ones to begin with.
MarkTheGreat on July 15, 2008 at 2:20 PM
Finally, you haven’t provided any evidence that the Mercantalism of others is hurting us.
MarkTheGreat on July 15, 2008 at 2:13 PM
And you haven’t provided any evidence that “free trade” has helped the country. I see China booming, the middle east booming, india booming and
the USA? no so much in here I see forclosure signs, rising unemployment, crumbling infrastructure, emepty stores, empty restruants. Yeap it is doing wonders for us. a couple more years of this type of great trade policies and we all may be down on the street corner asking “brother can you spare a dime”
unseen on July 15, 2008 at 2:21 PM
The reason why companies in MI, OH, PA failed, was because their unions would not let them compete. The same reason why GM is going down the tubes today.
Don’t blame Japan for the problems caused by our own people.
MarkTheGreat on July 15, 2008 at 2:14 PM
those “problems” led to great standards of living for OUR people. So now their standards of living are declining and China’s is growing. How does that help the USA? Or does it help the companies. the two are not the same you know.
If you want the avg American to live like the avg Indian then yeah free trade is great. sign me up.
unseen on July 15, 2008 at 2:25 PM
Can anyone tell me what the balance of payments between California and Florida is?
Can anyone tell me what the balance of payments between Los San Diego and San Francisco is?
If not, can anyone tell me why it matters what the balance of payments between the US and Japan is?
MarkTheGreat on July 15, 2008 at 2:30 PM
2 reasons:
a) climate change is the biggest crock of crap in recent memory
b) when it comes to peoples’ own money, they will get realistic in a hurry. As they will when they experience buyer’s remorse after electing Obama.
Grafted on July 15, 2008 at 2:30 PM
CHina is booming because they are freeing up their economy. Do the practice free trade, not completely, but it is a lot freer that it used to be. Ditto India. The middle east is booming because they are selling a product that has greatly increased in price recently.
In none of these instances is their prosperity due to mercantalism.
The problems in the US are not due to trade either. You can thank the economic mismanagement of the govt for them.
As usual, you try to paint a complex picture in shades of one color. You may impress yourself, but it is not an accurate reflection of reality.
MarkTheGreat on July 15, 2008 at 2:32 PM
Sigh… I’m so glad that you can dismiss the trade deficit that economists worry about.
“Govt creating new dollars has absolutely nothing to do with whether or not the balance of payments is positive or negative” so wrong its hard to know where to start.
The US Government, by creating too many dollars in realtion to the wealth of Economy which backs that dollar, has devalued the dollar. This means it costs MORE dollars to buy the resources we need to keep our economy going… like… oh… oil? As wages HERE have not increased in relation to that devaluation, the consumer here pays more for overseas goods than before. Problem is that many of those “goods” are raw materials (like oil) needed to run our economy.
“What do those other countries do with the dollars when they get them? Those dollars are valueless, except for their ability to buy things from the US” Wow… I guess in your world the other economies don’t use Dollars to buy and sell? That if I’m from Japan, I can’t use dollars to buy from China?
Romeo13 on July 15, 2008 at 2:34 PM
The unions had nothing to do with the rising standard of living in the US. That was caused by increasing productivity of American companies. Unions slowed down this increase in productivity, and for some unfortunate companies, brought it to a halt. Trade helps to increase productivity. Alowing different companies, and different countries to concentrate on what they are best at.
MarkTheGreat on July 15, 2008 at 2:34 PM
Because the first two examples are sitting inside the same economy, with the same rules applying to them…
while the trade with Japan is going to another country, with an entirly different set of rules.
Romeo13 on July 15, 2008 at 2:35 PM
romeo13 is right, you cannot ignore the government subsidies that other countries give their businesses. thats what tariffs were designed for.
right4life on July 15, 2008 at 2:37 PM
Unseen, via that report. The crude (which is not via North Slope gas but Cook Inlet) was to the Agrium plant before they went Natural Gas (which is easier to manufacture) for fertilizer.
This report was debunked a while back, but I can not find the link.
upinak on July 15, 2008 at 2:38 PM
Can anyone tell me what the balance of payments between California and Florida is?
Can anyone tell me what the balance of payments between Los San Diego and San Francisco is?
If not, can anyone tell me why it matters what the balance of payments between the US and Japan is?
MarkTheGreat on July 15, 2008 at 2:30 PM
Are you really that naive. Do you really think Japan and Florida are the same?
what did our grandfathers give their lives for on the battlefield?
unseen on July 15, 2008 at 2:39 PM
If you check the literature, you will find very few economists who worry about the balance of trade. The few that do work for trade unions, and are paid to whore their craft.
I never said that we weren’t facing inflation. I said that the reason govt prints money has nothing to do with the trade deficit.
One problem with an out of balance, balance of payments is that the supply of overseas dollar increases, the value of the dollars decreases. This results in the value of the dollar falling, which makes it more expensive for us to buy things from other countries. On the other hand, it makes it cheaper for others to buy things from us. Which increases the amount of things they buy from us.
The only reason why Japan is able to use dollars to buy things from China, is that China believes that it will be able to use those dollars to buy things from the US.
Why do you think gold has any value?
MarkTheGreat on July 15, 2008 at 2:39 PM
the chinese are engaged in economic warfare against us. they use our dollars to subsidize their businesses, and they drive our competing businesses out of business, and then use the profits to build their military.
and we just support their efforts, all to get cheaper goods.
right4life on July 15, 2008 at 2:40 PM
upinak on July 15, 2008 at 2:38 PM
I don’t know one way or the other enough to be able to discuss it. simply gave a link that kind of sounded what he was talking about.
unseen on July 15, 2008 at 2:41 PM
right4life,
I don’t ignore it when other countries decide to subsidize exports. I celebrate it.
Think about it. The tax payers of other countries are being taxed to make things cheaper for us to buy. That’s a win/win for the US. They are willing to make their citizens poorer, in order to make US citizens richer. Nothing wrong with that.
MarkTheGreat on July 15, 2008 at 2:42 PM
California and Florida don’t have laws of their own?
Who’d a thunk it.
MarkTheGreat on July 15, 2008 at 2:43 PM
The unions had nothing to do with the rising standard of living in the US
Yeap they had nothing to do with 40 hr work week, overtinme pay, vacation days, better healthcare etc. Noone of THOSE things increase standard of living. LOL you are a free trade hack that does not know a hole in the ground from an outhouse.
unseen on July 15, 2008 at 2:44 PM
Romeo,
What laws in Japan do you think matter?
MarkTheGreat on July 15, 2008 at 2:44 PM
absolutely corrrect.
absolutely correct
absolutely correct.
absolutely correct
MarkTheGreat on July 15, 2008 at 2:46 PM
upinak,
The laws that I am refering to were part of the congressional deal for opening up the North Shore.
They were finally repealed about 10 to 15 years ago.
MarkTheGreat on July 15, 2008 at 2:47 PM
What the hell are you talking about?
Rick on July 15, 2008 at 2:47 PM
ANWR oil could probably come to market more quickly than oil from the Outer Continental Shelf, although it’s harder to sell politically. When Republicans had the majority in the House in 2001 and 2003, two major energy bills were derailed by filibusters by Senate Democrats over ANWR. If ANWR had been taken out and the remaining legislation passed, the current situation might not have been as bad.
In terms of oil volume available, the Outer Continental Shelf is worth about 5 ANWR’s, and the shale oil reserves in the Rockies are worth about 25 to 50 ANWR’s (depending on whose estimate one believes), although shale oil is harder to extract, and will take longer to bring online. Bottom line: ANWR would be a good “quick fix”, but the shale oil is a better long-term solution, with the OCS being a good medium-term solution. But we must start NOW!
One energy source that IBD did not poll was “clean-coal technology”, which McCain has been pushing. The United States is the Saudi Arabia of coal, with a lot of it under “swing states” like VA, WV, PA, and OH, whose “bitter” people might want to make money from it. With the right technology, coal can not only be burned in power plants, but also gasified or converted to liquid fuel (with some net energy loss). If only 23% of the voters are worried about “climate change”, McCain should quietly drop the subject and push for drilling, shale oil development, clean-coal technology, and nuclear plants and have the American people on his side.
Regarding refineries–you can’t get two barrels of gasoline from three barrels of crude. It’s possible to get about 35% gasoline yield on a volume basis, but some compounds in crude oil are too heavy to be burned, and are used as asphalt or “carbon black” or coke for the steel industry. Refineries frequently have to adjust their production between favoring gasoline (in the summer months) or home-heating oil (during the winter months), and ensure the supply of diesel and jet fuel (both derived from kerosene).
The cracking process (which converts heavy fractions to lighter compounds that can be blended into gasoline) also produces some “light ends” such as propane or butane, and also olefins (ethylene, propylene, and butadiene) that can be feedstocks to the plastics industry. Refining processes also require some heat input, so that some of the lighter gases are burned as fuel.
Due to the complexity of refineries, with multiple products having different prices sold to different consumers, it’s difficult to calculate a profit margin per gallon of gasoline. A refinery could produce a balance sheet showing a certain excess of revenues over expenses, but what part of the profit is attributed to gasoline, to diesel fuel, to jet fuel, to home heating oil, to propane and butane, to plastics feedstocks, and to asphalt? Simplistic Democrat spin doctors like to divide oil company profits by gallons of gasoline sold to claim outrageous profits on gasoline, but what about the other products? The refineries don’t give them away, there’s a demand for them, and many of them cannot physically be converted to gasoline.
Besides, if the Continental Shelf was opened to drilling, and the Rocky Mountains opened to shale oil development, lots of those oil company profits would be plowed into exploration of the new sources–why pay $140/barrel for Saudi oil if you can get American oil for $30/barrel? The oil wouldn’t just come out of the ground–lots of that money would be paid to American blue-collar workers, petroleum engineers, and geologists. Better to them than to Saudi princes, and lots of Hillary voters would agree.
Steve Z on July 15, 2008 at 2:49 PM
And yet that report was based off Crude oil NOT Natural Gas.
Funny how that works huh.
upinak on July 15, 2008 at 2:49 PM
Ok, you’ve made progress here… now, what happens to a large economy when there are no longer enough dollars in the system to support that economy because so many of those dollars are in foreign hands?
Banks start to collapse because there is not enough money in the loan system… like this weekend? or with FannyMae?
So, what does the government do? It guarentees loans (unfunded mandate, more US Gov Debt), or plain bails out the bank (once again, adds to the US debt)… it “creates” money to put into the system, which further devalues the dollars already in the system.
But also devalues any dollars which people have saved for retirement.
But back to my origional point, if we are BUYING a resource for $140 a barrel, which only costs $20 a barrel to produce and ship, they are making a net profit of 120, which they can then spend ANYWHERE, not just in the US. If they spend wisely, and build infrastructure, and invest, they will need us less and less….
While we, because we have exported that wealth, will continue to need them UNTIL WE CAN REPALCE THAT RESOURCE.
So, replace it. Buy oil HERE. Don’t ship that profit overseas.
Romeo13 on July 15, 2008 at 2:51 PM
I’m looking for a report, but I’m not sure were to begin for laws that old. Opening up the N. Shore almost predates the internet.
MarkTheGreat on July 15, 2008 at 2:52 PM
ANWR would take 2 yrs (3 TOPS) to start up, even under Environmental regulations. You are correct, it would be more feasible.
Also, cracking is a great item of detail due many different items associated. Parfin Wax, which is a natural occurance in different grades of Oil can be cracked and turned into a synthetic diesel, which not many Americans know about. It is actually cheaper in some way to crack different varients of what most in the Industry concider waste.
upinak on July 15, 2008 at 2:53 PM
China and India are booming because of cheap labor and zero to no environmental laws and worketr protections. If simply costs less to make products in china than in the USA.
this influx of capital is allowing the governments of China and India to collect more tax revenue which they can use to fuel more infrastructure. the increas ein jobs is giving more wealth to the people as they come out of poverty which allows them to purchase more products which fiurther fuels their economy.
the USa on the other hand is seeing an outflow of capital, and a shift in tax reveunes. As higher paying jobs are shipped overseas counties and states see less tax revenues which make the infrastyructe hard to keep in repair. People are making less, two incomes families are now the rule, families and child rising is suffering, education standards are falling (as your posts show) and people can purshace less and less stuff so they demand lower prices which allows them to keep a somewhat stable standard of living which further fuels the outflow of capital to make chaeaper products.
However the other side of free trade is starting to bite. Imported inflation. As the standard of living in other countries rise the demand for those products that they make increase which increases the prices and the standard of living then drops in this country. The move by companies to china from mexico from the US can only end in one place.
unseen on July 15, 2008 at 2:53 PM
Japan? Taxes and tarrifs… and protectionist policies about food…
China? another matter entirely. They protect their own markets. Don’t have to meet our self imposed rules on the environment, or labor, or even product saftey, and so can make goods cheaper than here.
True Free trade only works if both systems have approximatly the same rules dragging on the system… or one is so technologicly superior that they are more efficient… like we used to be.
Romeo13 on July 15, 2008 at 2:55 PM
MarkTheGreat on July 15, 2008 at 2:46 PM
Do you study history or just make shit up as you go along. You must have forgotton about the strikes, Work stoppage as workers demanded better pay, better working conditions.
formation of unions to protect the workers from unrestrained capitalism. There were no 40 hr work weeks before the unions, In fact it was a made into a law by union friendly congress.
Capitalism does not offer a 40hr work week.
unseen on July 15, 2008 at 2:57 PM
What percentage of dollars do you believe is in foreign hands? And why do you believe that this percentage is high enough to matter.
The collapse of the mortgage system is due to banks being forced to make bad loans in order to avoid being sued over the non-existent redlining crisis. When these bad loans started failing, things escalated.
Why do you believe that dollars in foreign hands do not help to back American banks and American mortgages.
Foreigners are major purchasers of Freddy Mac and Fanny Mae bundles.
So what?
This same argument can be made for any industry. Why do you believe oil is different? Or are you arguing that we need to stop foreign trade alltogether?
MarkTheGreat on July 15, 2008 at 2:58 PM
I’m looking for a report, but I’m not sure were to begin for laws that old. Opening up the N. Shore almost predates the internet.
MarkTheGreat on July 15, 2008 at 2:52 PM
clueless in the use of the internet also? why am I not surprised?
unseen on July 15, 2008 at 2:59 PM
unseen,
I know history, it’s just that I study more history than that offered by the union.
Here’s a little reality check for you.
Working conditions were improving long before the unions were even a gleam in little socialist eyes.
If you think that the only reason companies behave is because unions and govt force them to, then you are utterly clueless. But then you have already proven that.
MarkTheGreat on July 15, 2008 at 3:00 PM
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