Is the idea of “energy independence” an illusion?

posted at 1:55 pm on March 6, 2012 by Jazz Shaw

Oil prices remain a concern heading into Spring, and most of the folks we hear from are pretty unhappy. Nobody likes paying more for gas, right? So higher oil prices are bad, yes? It turns out that the reality is a fair bit more complicated than what some of us may think. Recent news has gotten me to thinking in more global terms, and while there may be some positive aspects to this, I’m also quickly coming to the conclusion that the idea of “energy independence” may be an illusion. (More on that in a bit.)

But first, back to one of the opportunities I mentioned. In general, you don’t want to pay more at the pump, but if you talk to some of the financial wizards in the world of economics, every dark cloud has a silver lining. Higher oil prices, it seems, can provide opportunities for investors if the conditions are right. Economist Joe Weisenthal of Business Insider explains:

In its most recent ‘Weekly Kickstart’ note, Goldman Sachs has a page devoted to, what else, oil, and what specifically the firm is saying to clients regarding the potential impact on the economy and investing.

Here are the key bulletpoints, summarized by us:

  • Investors should overweight allocation to energy stocks.
  • The rise in oil prices is consistent with robust, demand. It will slow growth, but it’s not enough for the firm to start chopping its S&P earnings estimate.
  • Global supply/demand is very tight. Inventories have not risen. Saudi Arabia is producing as much oil as it has in 30 years.
  • It matters whether the surge in oil is demand or supply driven. So far it’s demand driven, which is good.
  • When there’s a supply shock, defensive sectors outperform.
  • Energy stocks remain cheap based on historical patterns with the price of oil.

So far, there’s no reason to knock down S&P earnings estimates, in part because some sectors within the index will benefit significantly from higher prices. However, the firm will start cutting in a sustained move higher.

At the link, Joe has a chart of oil prices vs. “cyclical” stocks which should prove informative.

The other aspect of the oil price issue which I mentioned above is a bit more depressing. It deals with the entire concept of American “energy independence” in terms of liquid petroleum based fuel supplies and their effect on both our national security and the price we pay for everything from the gas in your tank to the cost of heating your homes. What we’re learning is that, first of all, we’re actually producing a lot of oil in America right now, augmented by increasing supplies from our partners in Canada. (We can and should be producing a lot more, obviously, and Washington’s current policies need to change in order to make that happen.) Here’s where we stand on that.

But even if we ramp up production significantly, will it really change the conditions here on the home front all that much? We previously looked at a conspiracy theory regarding evil oil companies shipping all of the Keystone XL oil overseas and not letting us use it at home. That’s nonsense, of course, but it does teach us another important lesson. Oil is traded in a global market without distinction as to the nationality of the person writing the checks. While the energy industry provides a huge boost to the United States in terms of GDP, jobs and investment profits, they are not in this game for the purpose of driving down prices at home by flooding the domestic market with product.

Think of it this way: let’s say that our national consumption rate is “x” number of barrels of oil per year. If we (along with Canada) are producing X + one million barrels, you might think that all is well. Prices should be dropping and we can thumb our collective noses at the Saudis, right? Not really.

Even we produce above and beyond our needs, China still produces very little and has a massive thirst for oil. (They’re hardly the only ones, either.) The more we make, the more will be sold around the globe. Producers aren’t going to sell at cut rate prices and sit on millions of barrels waiting for us to order it at home. There will always be a buyer somewhere and prices will be whatever the market will bear. Yes, with a drastically increased production rate we can help swing the global equation a bit, but we’re never going to produce so much that we swamp the global market and drive prices into the dirt.

With that in mind, as I noted above, it may be time to do away with the concept of “energy independence” as a political stalking horse. (And yes, I’m fully aware that I’m one of the people who has been screaming the loudest about needing to achieve this largely mythical state for the last couple of years.) The oil companies are not agencies of the federal government working to fill up our private reserves. They are in business to make money and their customer base covers the globe.


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So long as the greenie-weenies have a stranglehold on energy development, then yes, it is an illusion.

MelonCollie on March 6, 2012 at 1:54 PM

The alternative to energy is lethargy – we are experiencing lethargy by decree.

Fuquay Steve on March 6, 2012 at 1:56 PM

I don’t know how worthy of a goal this is anyway.

What’s important is developing our own fuel sources, should something such as an OPEC embargo occur again. And in case war breaks out in the Middle East.

And creating jobs in the U.S.

There may be no way to achieve independence, but we should be doing everything possible to explore and develop as many feasible energy sources as possible.

NoDonkey on March 6, 2012 at 1:57 PM

Okay, okay, I found the answer on facebook. We also have a child obesity problem, right? Fat burns as fuel, right?

No, no, no, I’m not saying we should suck the fat out of kids and burn it as fuel. I mean the KIDS should burn it as fuel. We kill two birds with one stone this way. We get fat kids to crank generators to charge our electric cars. They lose weight, solving the childhood obesity problem, and we get free, local power.

Yeah, the thought occurred to me that we could tie a bunch of fat kids to our cars to pull them around instead of using engines, but I don’t think any number of fat kids could get you up to 70 MPH on the highway.

The Rogue Tomato on March 6, 2012 at 1:58 PM

So long as the greenie-weenies have a stranglehold on energy development, then yes, it is an illusion.

MelonCollie on March 6, 2012 at 1:54 PM

“Greenies” are not the problem. If anything, they are supposed to be culling the weakest and the dirtiest from the business herd. the problem lies with liberal activist judges who allow them a field day in court.

Archivarix on March 6, 2012 at 2:00 PM

What does this have to do with the “War on Women!”…?

/

Seven Percent Solution on March 6, 2012 at 2:00 PM

Once you give up the goal, you give up pursuing the goal. Even if it’s not 100% achievable by current means, doesn’t shutting down the possibility also shut down the possibility that we might FIND something that makes it far more achievable than it is now? Also, WHY is Cuba drilling off the Florida coast and we’re not? If you take away all of the red-tape holding drilling, expansion, and exploration away, we would definitely move in the direction of independence even if we never achieve it.

UnderstandingisPower on March 6, 2012 at 2:01 PM

Gasahol!

forest on March 6, 2012 at 2:06 PM

Wait a second… I just looked at the oil production figure that Jazz attached to the post. Has the production actually been growing since Obama took office, or do my eyes deceive me?

Archivarix on March 6, 2012 at 2:06 PM

Only because politicians have promised but have never actually tried.

Politicians are about politics, mostly, who knew?

Speakup on March 6, 2012 at 2:06 PM

Research into nuclear and fusion is the only way out of the cycle Unfortunately, the greens don’t like that either. Imagine if we had spent all the green money on fusion or something else more promising.

aniptofar on March 6, 2012 at 2:08 PM

Wait a second… I just looked at the oil production figure that Jazz attached to the post. Has the production actually been growing since Obama took office, or do my eyes deceive me?

Archivarix on March 6, 2012 at 2:06 PM

Production has increased on lands that the feds cannot control, and has decreased on fed lands.

Patrick S on March 6, 2012 at 2:09 PM

Wait a second… I just looked at the oil production figure that Jazz attached to the post. Has the production actually been growing since Obama took office, or do my eyes deceive me?

Archivarix on March 6, 2012 at 2:06 PM

Production has increased on lands that the feds cannot control, and has decreased on fed lands.

Patrick S on March 6, 2012 at 2:09 PM

Then I want this bloody figure split into two curves. Because right now, it is the best propaganda sheet D’Kos can hope for.

Archivarix on March 6, 2012 at 2:11 PM

There is no reasonable argument in support of energy dependence on unstable overseas producers. It puts our economy on constant edge whenever there’s a blip on the news over there. I can’t understand why a stable domestic supply is considered to be unwarranted or unobtainable.

HotAirian on March 6, 2012 at 2:12 PM

This is all covered in Econ 101.

EddieC on March 6, 2012 at 2:13 PM

Also, WHY is Cuba drilling off the Florida coast and we’re not?

Because the jug-eared financial moron is “spreading the wealth”. Remember him giving a bunch of money to Brazil for oil exploration with the remark that he hoped that one day the US would become Brazil’s biggest oil customer? Apparently, he believes that the US buying oil from elsewhere rather than producing our own oil is better for the world. He keeps forgetting that he was elected President of the US, not the world.

catsandbooks on March 6, 2012 at 2:16 PM

Exactly. We are living in a global economy now, and oil producers will sell their product to the highest bidder. Efforts to manipulate the markets (e.g. the idea that a portion of all oil harvested within US borders must be refined and sold locally at some artificial price) will result in economic anomalies, like the shortages that lead to gas lines in the 1970s. If gas prices remain high, people will modify their behavior (mass transit, hybrid vehicles)to adapt.

Having said that, we heard today that Chrysler will begin making trucks powered by natural gas, a much more plentiful and cheap fuel source. And, like T. Boone Pickens, we are wondering why this isn’t a national trend?

TouchdownBuddha on March 6, 2012 at 2:18 PM

What people aren’t mentioning, because it actually takes a little effort to find out, but the “speculators” in the oil markets are actually sovereign funds from the oil producing countries. They use their current oil profits to jack up the futures markets in order to increase their profits, and also to weaken us. Because many of these funds are run by Islamists. So in a way the Libtards are right in saying higher oil is because of Wall Street, except Wall Street is just the market, not the operator.

If we increase our oil production we may not lower prices significantly, but we would add an element of stability to the market. Plus, if we can get oil prices down, it will cripple Iran’s economy, and prevent other hostile states, like Russia and Venezuela from causing as much mischief.

We can also lower demand by exploiting our other fuels, and start building nuclear reactors. We can even use “green” energy if we acknowledge that it is a supplemental source and not a base power source.

Iblis on March 6, 2012 at 2:23 PM

Wait a second… I just looked at the oil production figure that Jazz attached to the post. Has the production actually been growing since Obama took office, or do my eyes deceive me?

Archivarix on March 6, 2012 at 2:06 PM

Production has increased on lands that the feds cannot control, and has decreased on fed lands.

Patrick S on March 6, 2012 at 2:09 PM

Then I want this bloody figure split into two curves. Because right now, it is the best propaganda sheet D’Kos can hope for.

Archivarix on March 6, 2012 at 2:11 PM

It doesn’t need to be propoganda for either side. It’s just the case. We became a net petro exporter this past year for the first time in ages and yes, production is back to the highest it’s been in a decade. This has nothing to do with Obama administration policies since new permits for offshore are still coming at a snail’s pace and virtually no new areas are opened for exploration. There has only been one full auction for new leases.

However, on the existing lands and offshore sites which are in production, new technologies (horizontal drilling, frack, SAGD and others) have allowed us to ramp up what we’re able to get and to obtain a lot of the “tight oil” and other resources which we previously couldn’t get. So you could fairly say that our production has increased in spite of Obama’s policies rather than because of them. If more leases were opened, we could seriously ramp up the flow now.

Jazz Shaw on March 6, 2012 at 2:24 PM

It’s still a Good Thing to increase production: the increase in federal revenue (throughleases and taxes) + jobs created + a measure of control = good policy whether or not we become energy independent. It’s called taking advantage of the situation. And we WILL introduce a measure of control over world prices by increasing supply.

JeffWeimer on March 6, 2012 at 2:25 PM

Wait a second… I just looked at the oil production figure that Jazz attached to the post. Has the production actually been growing since Obama took office, or do my eyes deceive me?

Archivarix on March 6, 2012 at 2:06 PM

Yes, U.S. domestic production of crude is at it’s highest level in eight years. It’s no secret. That’s been noted in much of the news coverage ever since this year’s price spiked.

The fact that this is news to you –and probably more than a few others here– well, it’s almost like you are blind to facts that don’t reflect poorly on the President. Imagine that.

Drew Lowell on March 6, 2012 at 2:27 PM

it may be time to do away with the concept of “energy independence” as a political stalking horse.

I always thought that referred to having enough home produced product that you didn’t need to purchase outside supplies.

GarandFan on March 6, 2012 at 2:28 PM

He keeps forgetting that he was elected President of the US, not the world.

catsandbooks on March 6, 2012 at 2:16 PM

Well, now you’re just talking crazy..

Atttaaaaacckkkkkkkk Waaaaaaaaaatchhhhhh!!!!

BacaDog on March 6, 2012 at 2:30 PM

And the world is slightly more economically literate.

Free Constitution on March 6, 2012 at 2:32 PM

I’m not necessarily looking for prices to be driven into the dirt. But if we’re sitting on even half the reserves that I’ve read may potentially exist here and we can recover it in reasonable and economic ways then we have the chance to vastly improve our economy, at the very least be on equal footing with the rest of the global oil-producing world and if we had a lot to sell to China it would go a long way toward reducing our indebtedness to them.

So we have little to lose by starting the exploration and the drilling and the refining and with our ingenuity and American exceptionalism along the way we’ll discover and develop the new technologies and methods we’ll need to make it a success. And then we can take the time necessary to allow for development of the right green energy alternatives in affordable and reasonable ways and allow the market to mature and bring those resources to us without having them rammed down our throats while we’re damned into bankruptcy and poverty in the process where the policies of the current WretchedHive admin are driving us.

stukinIL4now on March 6, 2012 at 2:39 PM

Wait a second… I just looked at the oil production figure that Jazz attached to the post. Has the production actually been growing since Obama took office, or do my eyes deceive me?

Archivarix on March 6, 2012 at 2:06 PM

Ramping up of production in the Bakken play (on private/state land), and the run-up in oil prices making production more attractive elsewhere (also on private/state land) has led to more production. It’s called, “Economics.”

Consider what it would be doing if 0 told Salazar to start issuing permits and holding federal lease sales, instead of obstructing those potential sources. Throw in ANWR, and we could substantially reduce our trade deficit and dependance on foreign oil.

iurockhead on March 6, 2012 at 2:39 PM

…on the existing lands and offshore sites which are in production, new technologies (horizontal drilling, frack, SAGD and others) have allowed us to ramp up what we’re able to get and to obtain a lot of the “tight oil” and other resources which we previously couldn’t get.

This is the biggest technological breakthrough since the personal computer, and the vast majority have no idea it’s even happening.

SomeCallMeJohn on March 6, 2012 at 2:41 PM

Either way you look at it, greater domestic production creates jobs and increases our independence from foreign oil/fuel. People often forget that this is also a national security issue.

An American energy powerhouse would also blunt the impact speculators have on driving the cost of gas up. Perhaps not a lot, but some. It would also have the benefit of luring greater investment into American energy and infrastructure (more capital, healthier stocks, etc.). The various administrations since Reagan have had a tendency to ignore Economics 101.

Blacksoda on March 6, 2012 at 2:42 PM

With that in mind, as I noted above, it may be time to do away with the concept of “energy independence” as a political stalking horse. (And yes, I’m fully aware that I’m one of the people who has been screaming the loudest about needing to achieve this largely mythical state for the last couple of years.) The oil companies are not agencies of the federal government working to fill up our private reserves. They are in business to make money and their customer base covers the globe.

Jazz is there a beta male contest going on at Hot Air we all should be made aware of, and is Allah leading?

Dr Evil on March 6, 2012 at 2:45 PM

Who rolled and smoked a big fat one?

KOOLAID2 on March 6, 2012 at 2:53 PM

No, no, no, I’m not saying we should suck the fat out of kids and burn it as fuel. I mean the KIDS should burn it as fuel. The Rogue Tomato on March 6, 2012 at 1:58 PM

When I initially read your post, I overlooked the it and saw the KIDS should burn as fuel. I’m glad we’re not going there.

talkingpoints on March 6, 2012 at 2:53 PM

It’s more of a delusion.
If an oil company pumps it out of the ground it’s going to the highest bidder. And if that bidder is China …

kregg on March 6, 2012 at 3:07 PM

Why do we all lament our loss of manufacturing and decreasing exports, yet when an oil company exports one of the refined products of crude oil, we run around in cirles with our dresses pulled over our heads?

Why doesn’t the oil refining business seem to count as ‘manufacturing’?
Why don’t oil refinery jobs count as manufacturing jobs?

slickwillie2001 on March 6, 2012 at 3:13 PM

Newt tried to explain ‘oil exports’ to BOR a couple of nights ago. Newt treated him like you treat a three year old girl that asks ‘Daddy, why is the sky blue’? He used the example of wheat and corn exports.

BOR said, ‘yes, but those are not essential products like gasoline’.

slickwillie2001 on March 6, 2012 at 3:15 PM

I think it is less ‘Energy Independence’ and more national security. If for example, we go to war with a country that is friendlier with oil producers than we are, we will be in a hell of a pickle.

Caro1ina on March 6, 2012 at 3:20 PM

There’s absolutely no reason to import oil. The oil industry can meet US demand and export as little or as much as it wants. To pump billions of US dollars to countries that hate our guts makes no sense. If it wasn’t for oil dollars these hell holes would still be in the 7th century.

darwin on March 6, 2012 at 3:29 PM

Energy independence is producing enough raw material that we could cut exports in case of war time need and have enough for ourselves and our allies. Where do we stand on that?

John Mauer on March 6, 2012 at 3:30 PM

Jazz’ point seems to be that if we produce more, the price will drop and oil companies will stop producing oil so that we never can acheive independence. Per the Wall Street Journal issue of March 5, oil is currently priced 35% higher than the highest oil production cost going to market. That means we could cut prices substantially without discouraging production. While we may not go from 7 million or so barrels a day production to our approximate consumption rate of 18 million a day, we do have the potential to reduce the cartel premium of OPEC and the Anxiety premium of so much dependence on unstable middle eastern sources without scaring producers out of the oil business. With continued growth of India and China as oil consumers, we might well even see a price sustained that would reward continued oil production even if the US and Canada could gear up production to equal our joint demand.

KW64 on March 6, 2012 at 3:32 PM

“Energy independence” was always central planning by another name. The market works, we don’t need to interfere with it.

echosyst on March 6, 2012 at 3:34 PM

I think it is less ‘Energy Independence’ and more national security. If for example, we go to war with a country that is friendlier with oil producers than we are, we will be in a hell of a pickle.

Caro1ina on March 6, 2012 at 3:20 PM

That is the biggest single reason for energy independence. Having our national security tied to a supply line of crude that will be precariously long in case of serious war (and I don’t mean the NeoCon occupation cr@p), is a very dangerous situation.

MelonCollie on March 6, 2012 at 3:38 PM

With all the shale oil and gas in this country with new techniques in 10 years we will be net exporters of fossil fuels.
If you don’t believe me google(bing) shale oil and gas in usa

gerrym51 on March 6, 2012 at 3:38 PM

I think it is less ‘Energy Independence’ and more national security. If for example, we go to war with a country that is friendlier with oil producers than we are, we will be in a hell of a pickle.

Caro1ina on March 6, 2012 at 3:20 PM

That is only true concerning which company is awarded the contracts. I don’t think that many US companies were awarded many of Iraq’s oil contracts. Just the protection to get the product to market. Again oil is traded as a commodity … not as an energy.

kregg on March 6, 2012 at 3:45 PM

This article includes a chart showing production on private vs federal land:

http://www.canadafreepress.com/index.php/article/42396

marinetbryant on March 6, 2012 at 3:46 PM

Yes, it’s an illusion, at least as it’s usually defined. I regard it as “energy independence” to be doing the most that is cost-effective to influence price and access in our favor. That would suggest drilling and refining here, at any time, but it may also suggest buying from Canada and Mexico (which are by far our largest oil suppliers) and using our national power to encourage stability in the rest of the world.

We can’t restrict ourselves to energy sourced solely from within the territory of the United States, and expect to prosper. That is an invalid aspiration. There is and can be no “Fortress America.”

Drill, refine, limit regulation, limit the rewards of activist lawsuits, thereby bring down the price of oil, frack, mine coal, burn coal, buy oil from foreign suppliers, keep Russia and China out of our natural resources industries (they never play fair and they’re not going to start with us), build nuclear power plants, and if we want to incentivize inventors of alternative energy schemes, offer a 25-year tax exemption on all royalties to the patenters of technologies that work cheaply and effectively enough, without government subsidies, for the people to gravitate to them naturally.

J.E. Dyer on March 6, 2012 at 3:50 PM

Just a mai. If we produce oil here in the USA and assuming a world wide price, then overseas oil becomes More expensive because of shipping and storage costs.

Producing oil here, increasing refinery capacity, and building standby stocks of gasoline will insulate us from minor shocks from the world supply and also drive prices down. Increased exploration, increasing technology in drilling, etc all drive the price down and would tend to make gas and other oil products less expensive that putting it on a boat. It would only be our excess that would be sold to the world, not our needs.

Or am I wrong?

Bulletchaser on March 6, 2012 at 4:09 PM

When gas was $4 a gallon in 2008, Bush lifted the ban on off-shore drilling and prices plummeted. Obama reinstated the ban, and here we are.

Jasper61 on March 6, 2012 at 4:10 PM

I’ve heard this claim several times recently, but I haven’t seen any supporting information.

Can you provide it?

I remember some of the early news about this not making the claim quite as bold as this. I believe that our refineries are currently exporting quite a bit of refined petroleum products, but we are still importing quite a bit of crude as well. And I don’t think that the added value of the refined products that are exported makes up for the crude imports.

…however, I’m happy to be proven wrong.

blink on March 6, 2012 at 3:53 PM

This is from the American Petroleum Institute. (Working for US energy interests, not fans of the current administration.)

http://energytomorrow.org/blog/about-those-net-exports/#/type/all

It also explains some of what I was saying about oil being a global commodity, not just a domestic concern.

Jazz Shaw on March 6, 2012 at 4:11 PM

Switch everything possible from oil to natural gas.

I’m converting my car as soon as a CNG station locates within 25 miles of me.

petefrt on March 6, 2012 at 4:16 PM

When gas was $4 a gallon in 2008, Bush lifted the ban on off-shore drilling and prices plummeted. Obama reinstated the ban, and here we are.

Jasper61 on March 6, 2012 at 4:10 PM

This says it all.

When Obama says domestic drilling wouldn’t help, he lies. But then he always lies.

The Rogue Tomato on March 6, 2012 at 4:26 PM

When gas was $4 a gallon in 2008, Bush lifted the ban on off-shore drilling and prices plummeted. Obama reinstated the ban, and here we are.

Jasper61 on March 6, 2012 at 4:10 PM

Obama set his idealist liberal policies with the hope of selling Chevy Dolts. Backfire!

kregg on March 6, 2012 at 4:32 PM

blink on March 6, 2012 at 3:53 PM

I recall as well that it is often cheaper to ship Alaskan crude oil to Pacific Basin markets than to US refineries, so we may be exporting crude oil at the same time we are importing it.

slickwillie2001 on March 6, 2012 at 4:33 PM

When gas was $4 a gallon in 2008, Bush lifted the ban on off-shore drilling and prices plummeted. Obama reinstated the ban, and here we are.

Jasper61 on March 6, 2012 at 4:10 PM
This says it all.

When Obama says domestic drilling wouldn’t help, he lies. But then he always lies.

The Rogue Tomato on March 6, 2012 at 4:26 PM

Nice points both….I’d also like to add that Nat Gas price HAS been driven into the ground by … say it with me…. PRODUCTION. It is at it’s lowest price in 10 years. We CAN affect the price.

landowner on March 6, 2012 at 4:37 PM

Yeah, high oil prices are great news for OPEC, the oil exporting cartel…You know, the guys who price fix by modulating their oil production. It was reported that OPEC made a cool trillion last year selling oil. We on the other hand exported about 500 billion dollars in order to buy energy abroad. Obama’s got himself a winning formula there…If the goal is to turn us into a third world country like Indonesia that is to say. Pun intended…

Nozzle on March 6, 2012 at 4:39 PM

The natural gas infrastructure would have to improve dramatically, to make it effective to convert. Right now many regions don’t have natural gas service. I’d love to be able to top off my car at home. I’d also love a gas range, but that’s another issue.

Iblis on March 6, 2012 at 4:43 PM

Oil is a fungible commodity – and where it happens to be drilled is only one of many factors in its cost- while the world is relatively peaceful.

But when a critical mass of countries stop working and playing well with others, oil becomes a STRATEGIC resource. And countries become “energy independant” whether they want to or not.

At that point, everything changes. Everybody stops worrying about a few cents on the gallon and starts worrying about things like harvesting food before it rots.

logis on March 6, 2012 at 5:02 PM

Jazz only the dumbest of dumba$$es believe the crapola about Keystone XL crude being exported.

It is a replacement for Venezuelan crude and at present most countries don’t have the capacity to refine that type (20 API and below) crude efficiently and economically outside of the U.S.

Stop talking with production and marketing people and try finding out something from refiners instead.

Kermit on March 6, 2012 at 7:50 PM

Energy independence may be possible but energy independence isn’t the point, I wish conservatives would get off the concept. Energy independence on it’s own means nothing. If the cost of energy independence means paying $140.00 per barrel of oil when we could buy if from Canada or Mexico for $90.00 a barrel, energy independence would be stupid.
Opening up the the U.S. for oil and both onshore and offshore while at the same time examining the tax structure to keep the cost of production down is what matters. This wouldn’t just help the U.S. economy it would also lower and stabilize the price of energy worldwide. That’s what is important, forget about the energy independence argument, it means nothing.

lowandslow on December 6, 2011 at 7:46 PM

lowandslow on March 6, 2012 at 8:19 PM

It’s not about energy independence. If we can buy the product from somewhere else cheaper, who cares. The problem is the government has made the business environment for producing in the U.S. a determent not an asset. EXXON, BP, Conoco, etc. would love to have more production here but it’s more profitable to do it in other countries.
That’s what’s wrong with buying a foreign product. Don’t worry about energy independence, it’s a bad argument.

lowandslow on December 5, 2011 at 6:20 PM

lowandslow on March 6, 2012 at 8:23 PM

But they’re all wrong on this “energy independence” garbage. I don’t care if we’re energy independent or not. The issue should be that we’re the most economically viable place for producers so the price everywhere comes down.

lowandslow on February 4, 2012 at 2:59 PM

lowandslow on March 6, 2012 at 8:28 PM

I would have thought of “energy independence” in more limited terms, such as if the US produces more useable energy than it needs, then if some cartel (i.e. OPEC) decided to not sell oil to the US it would not really matter. It might also mean that if the US was exporting oil because it was producing over it needs, for instance, then the flow of dollars would be toward the US not away from it. I can see the point that the price of energy might not come down, but that is different from not being able to have or buy it in the first place.

Russ808 on March 6, 2012 at 8:37 PM

I recall as well that it is often cheaper to ship Alaskan crude oil to Pacific Basin markets than to US refineries, so we may be exporting crude oil at the same time we are importing it.

slickwillie2001 on March 6, 2012 at 4:33 PM

Cost of freight.

The REASON that Canadian Syncrude will not be exported at the terminus of Keystone XL (Nederland, TX) is that heavy crude is needed at several Gulf Coast refineries to replace declining Venezuelan production. Not all crude is for all refineries. Kick Venezuela to the curb.

Please understand crude oil refineries before you make other ignorant statements on the topic.

Kermit on March 7, 2012 at 9:04 AM