USA: An oil rich nation after all

posted at 8:05 am on March 17, 2012 by Jazz Shaw

The President has been traveling on Campaign Tourapalooza 2012 this month and seeking to explain rising oil and gas prices. One of his favorite tag lines has been to say that you “can’t just drill your way to lower gas prices.” (And he’s partly correct there, but more on that later.) But he’s also tossing out another figure when he makes these remarks.

“With only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices,” he said. “Not when we consume 20% of the world’s oil.”

So is that actually true? Are we an oil barren nation? As John Merline points out at Investors Business Daily, it’s not even close to being accurate unless you’re really picking and choosing your terms. This is because the figure that Barack Obama is quoting relies on estimates of proved reserves.

But the figure Obama uses — proved oil reserves — vastly undercounts how much oil the U.S. actually contains. In fact, far from being oil-poor, the country is awash in vast quantities — enough to meet all the country’s oil needs for hundreds of years.

The U.S. has 22.3 billion barrels of proved reserves, a little less than 2% of the entire world’s proved reserves, according to the Energy Information Administration. But as the EIA explains, proved reserves “are a small subset of recoverable resources,” because they only count oil that companies are currently drilling for in existing fields.

When you look at the whole picture, it turns out that there are vast supplies of oil in the U.S., according to various government reports.

Proved reserves is a valuable number to keep track of, no doubt. It gives you a good snapshot of the amount of oil you’re currently tapping into, and that allows you to develop solid estimates of what’s going to be entering the pipeline each season. But by the same token, it’s not any sort of reflection of what your total assets are. That’s like saying that Bill Gates only has $20K of liquid cash in his primary checking account this month so he must be close to filing for bankruptcy. Here’s a more complete picture for you:

Oil Scarcity

  • At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered
  • About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.
  • Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope
  • Up to 12 billion barrels in ANWR, according to the USGS.
  • As much as 19 billion barrels in the Utah tar sands
  • A stunning 1.4 trillion barrels of oil shale the massive Green River Formation in Wyoming

The main problem is that most of these resources are roped off. Just knowing the oil is there comes as little comfort if there are never going to be any leases issued by the government for energy companies to explore. And our ability to access the shale oil – while technically well withing our capability today – will be significantly hamstrung as long as activists continue to fight fracking and horizontal drilling.

But before we get too carried away, it’s still worth noting that one part of Obama’s claims is actually true. Even if we opened the floodgates and were able to jack up our domestic production by 20% overnight, it wouldn’t do much to move the needle on gas and oil prices in general. That’s because, as we’ve noted before, the idea of “energy independence” is something of a misnomer. Energy is traded on a global market, not compartmentalized by nation. When we produce more than we need, the rest is immediately sold as exports with few exceptions. When we don’t produce as much, we import more. It’s just the way the free market works.


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Even if we opened the floodgates and were able to jack up our domestic production by 20% overnight, it wouldn’t do much to move the needle on gas and oil prices in general.

I disagree. In capitalism, businesses react to what their competitors are doing. If we began approving leases and wildcatters started poking holes in the ground everywhere, the current oil suppliers would react by lowering their prices to make it more cost effective for us to keep buying from them. That would have an instant effect on prices at the pump. We saw this in the summer of 2008. Bush began talking about opening up leases and, despite the fact we were still in the peak demand period, prices fell.

Also, if we jacked up production by 20%, increased supply and flat demand would necessarily produce a price reduction and quickly.

Odysseus on March 17, 2012 at 10:28 AM

The vast majority of the oil we import does not come from the ME. BobMbx on March 17, 2012 at 10:26 AM

I know. But not having to buy ANY from the ME would not only lower costs, but feel schweet.

Akzed on March 17, 2012 at 10:28 AM

Libfree I see the leech comment got to you…funny how the truth bites eh? You know you suckle at the teet of the government and the free market. Losers like you would starve to death in the times prior to the industrial revolution.

CW on March 17, 2012 at 10:28 AM

Another simple question: how much would we save if we ended the practice or having 75 summer blends of gas, like we did when we waived the requirement in the Katrina aftermath?

Akzed on March 17, 2012 at 10:26 AM

Some think as the summer approaches Obama will relent and end that silliness.

CW on March 17, 2012 at 10:30 AM

Your last paragraph ignores the supply and demand side of the equation. What does exports and imports have to do with anything if not supply and demand which as any econ101 student knows effects pricing in a free market. Are you making the argument that markets are not free? If so, you may have a point as American oil markets haven’t been free in over a Century.

aposematic on March 17, 2012 at 10:31 AM

Another simple question:

If draining the emergency reserves would lower prices as Obooba admits, why won’t pumping and refining oil do the same?

Akzed on March 17, 2012 at 10:27 AM

It would be a one time, temporary reduction in the price of gas. This time next year we would be in the same space. I know this is antithetical to that free market, financial quarter style of thinking, but at least *TRY* and think beyond the next 12 months would you.

libfreeordie on March 17, 2012 at 10:31 AM

Something that belongs to you. You are saying that every American citizen has an equal ownership claim on every drop of oil within the United States territory? I would agree, but I’m a fricking Marxist. What you’re describing is collective ownership of the land and a demand that American citizens be compensated for the use of OUR land. Absolutely stunning.

libfreeordie on March 17, 2012 at 10:15 AM

Are you retarded? I have no claim to any oil on private lands. I’m talking about oil on public lands. That belongs to the people. The people have a right to be compensated for a resource on a public land. I’m also talking about a per barrel fee to compensate me for removing oil from my land. Not a tax. If I charge 20 bucks a barrel, and the oil company has about 30 dollars in drilling and recovery cost, they would profit about 50 dollars a barrel, assuming the price of oil is 100 bucks a barrel. Good on them. If the price drops to 50 bucks they make nothing. Tough on them. Assuming they still want to drill at that price, I still get my 20 bucks.

trigon on March 17, 2012 at 10:31 AM

When you have an administration that believes that resources and human potential are limited you will inevitably end up with limited opportunity and limited resources/higher prices.

LifeTrek on March 17, 2012 at 8:13 AM

.
Barack Obama doesn’t believe we’re “limited”.

He believes we (America) should be brought down. And he’s doing his part the best he can, to bring that to pass . . . period. : (

listens2glenn on March 17, 2012 at 10:31 AM

Just FYI, I won’t be responding to your posts anymore. You can continue to address me if you like. libfreeordie on March 17, 2012 at 10:23 AM

Aw, poor CW, he can talk to the hand all he likes!

Hey libf, somehow we got along without your wretched input for years around here, ok?

Akzed on March 17, 2012 at 10:31 AM

If draining the emergency reserves would lower prices as Obooba admits, why won’t pumping and refining oil do the same?

Akzed on March 17, 2012 at 10:27 AM

Bingo!!!

+1000000

coldwarrior on March 17, 2012 at 10:32 AM

Present all the silly facts and figures you want but nobody really knows what will happen until we try. Bottom line is that we have absolutely nothing to lose by going after the reserves–drilling, exploring, extracting, refining will at the very least help the economy by creating jobs–and I’d bet more jobs than Opromiseme has created so far, which is at the very least what the Keystone Pipeline would do. And we have everything to gain if even half the estimates of reserves expected are there.

stukinIL4now on March 17, 2012 at 10:32 AM

Even if we opened the floodgates and were able to jack up our domestic production by 20% overnight, it wouldn’t do much to move the needle on gas and oil prices in general.

Of course it would move prices. Oil prices are forward looking and reflect anticipated supply and demand. Hence the name, oil futures. If tomorrow, some farmer dug up a 1 ton block of gold on his land, prices would drop worldwide on Monday in anticipation of that new supply. That’s the way it works.

RadClown on March 17, 2012 at 10:32 AM

bayam on March 17, 2012 at 10:23 AM

I read an article over a year ago that talked about scientists at a Texas university that had proven they could convert coal to oil… at a cost less than $1/gallon. Lots of things can be converted to oil. I’ve read about bio-material and garbage being converted to oil. But what is significant about this is the energy density of coal. It’s almost a one-to-one conversion (whereas all the other approaches use LOTS of input).

We don’t have a problem with energy production. We have a problem with liberals fools trying to restrict our opportunities so they can rule over us like tyrants.

dominigan on March 17, 2012 at 10:32 AM

libfreeordie on March 17, 2012 at 9:32 AM

Oh yea. NOW we can’t blame our beloved POTUS.

But I sorta remember some hypocrite Nailing President Bush at times for high gas prices in 2008.

Moreover, the Democrat Party seem to use it as a whip on everyone every chance they get.

Unless they are holding office.

Like the Soviets. Only Capitalists can oppress. Until you speak to someone who lived in a worker’s paradise overseas. Or even Chicago.

IlikedAUH2O on March 17, 2012 at 10:33 AM

dominigan on March 17, 2012 at 10:32 AM

That oil is not the oil for gasoline.

IlikedAUH2O on March 17, 2012 at 10:34 AM

It would be a one time, temporary reduction in the price of gas. This time next year we would be in the same space. I know this is antithetical to that free market, financial quarter style of thinking, but at least *TRY* and think beyond the next 12 months would you. libfreeordie on March 17, 2012 at 10:31 AM

I’m not advocating tapping the reserves dope, Obooba is, on the basis of the short-term price effect, which means that he admits that supply and demand are related.

You can’t be that stupid. Well, I’m sure you are. The only alternative belief is that you are lying. Of course, both could be in play.

Akzed on March 17, 2012 at 10:34 AM

Odysseus on March 17, 2012 at 10:28 AM

Dear God, so many…so many of you are just willfully ignorant on the nature of the global oil market. Its like a tsunami of ignorance.

libfreeordie on March 17, 2012 at 10:34 AM

It would be a one time, temporary reduction in the price of gas. This time next year we would be in the same space. I know this is antithetical to that free market, financial quarter style of thinking, but at least *TRY* and think beyond the next 12 months would you.

libfreeordie on March 17, 2012 at 10:31 AM

Seriously coming from you that is just the height of irony.

http://www.usdebtclock.org/

Wow you are just a joke.

CW on March 17, 2012 at 10:35 AM

Of course it would move prices. Oil prices are forward looking and reflect anticipated supply and demand. Hence the name, oil futures. If tomorrow, some farmer dug up a 1 ton block of gold on his land, prices would drop worldwide on Monday in anticipation of that new supply. That’s the way it works.

RadClown on March 17, 2012 at 10:32 AM

*Deep Breath*

Oil futures markets also examine future DEMAND.

libfreeordie on March 17, 2012 at 10:35 AM

It would be a one time, temporary reduction in the price of gas. This time next year we would be in the same space. I know this is antithetical to that free market, financial quarter style of thinking, but at least *TRY* and think beyond the next 12 months would you.

libfreeordie on March 17, 2012 at 10:31 AM

Draining the oil reserves, YES. Opening up drilling everywhere, NO.

We ARE thinking beyond 12 months. It is liberals that are huddled in a fetal position in a box of their own making.

dominigan on March 17, 2012 at 10:35 AM

Poor, hapless, cliche-riddled Obama. Won’t he look bad in future history books when science finally gets around to admitting what Russian-Ukranian scientists have known for years … that oil is a renewable resource.

I know it’s a radical idea but check it out: google “abiotic oil.”. Here’s a link for starters.

http://www.rense.com/general63/staline.htm

Obama mocked Rutherford Hayes for not seeing the future clearly (a lie, of course). Won’t it be exquisitely enjoyable when President Romney can turn it back on him.

MaxMBJ on March 17, 2012 at 10:36 AM

tsunami of ignorance.

libfreeordie on March 17, 2012 at 10:34 AM

So you are including Obama right? Seems again he thinks an increased supply is a good thing right?

You really are a joke.

CW on March 17, 2012 at 10:36 AM

Oil futures markets also examine future DEMAND.

libfreeordie on March 17, 2012 at 10:35 AM

And that is already built into the futures. That won’t change. But what can change is our ability to meet those future demands.

With liberals its always what we can’t do… never what we CAN do.

dominigan on March 17, 2012 at 10:37 AM

I have no claim to any oil on private lands. I’m talking about oil on public lands. That belongs to the people. The people have a right to be compensated for a resource on a public land.

trigon on March 17, 2012 at 10:31 AM

In a thread full of idiotic posts, this takes the cake. What you have a right to is a reasonable expectation that your government will use revenues from oil production to offset the cost of governance.

If someone buys a donut at a national park made from ingredients grown on government farms, should you get a cut of the profit?

Inignort on March 17, 2012 at 10:37 AM

MaxMBJ on March 17, 2012 at 10:36 AM

That is true. That’s why dry wells refill.

Romney should drill on the WH lawn. Even if there’s no oil there, a working oil rig would be nice symbolism. Since it would be nothing more than symbolic, libtards should love it.

Akzed on March 17, 2012 at 10:38 AM

I’m not advocating tapping the reserves dope, Obooba is, on the basis of the short-term price effect, which means that he admits that supply and demand are related.

No one is denying that supply and demand are related. If that’s what you think the debate is about no wonder you’re offering up this superficial analyses of oil prices. Read and learn: http://www.smartplanet.com/blog/energy-futurist/oil-demand-shift-asia-takes-over/400

libfreeordie on March 17, 2012 at 10:38 AM

They pretend to be John Wayne until they need their nanny.

Don’t you just love the conservatives who now decide that every US citizen has an ownership interest in every drop of oil in the country?

This runs from Bill O’Reilly to some of the worthies around here.

This is further left than our administration!

He is not my favorite anymore but Newt is right. We can beat this thing without socialism. As a matter of fact. socialism will insure that we NEVER beat it.

IlikedAUH2O on March 17, 2012 at 10:39 AM

Jazz:

Please. I stress this. Not all oil is the same, and it’s not produced the same. In Saudi Arabia, it’s far cheaper to produce oil there than it is to produce in North Dakota. It’s still cheaper to produce in Africa on land than it is in Eagle Ford.

Production costs of shale are 86 bucks a barrel in some places, and no, technology is not capable of reducing these costs because of the general nature of drilling technologies and pumps.

So, yes, we can produce a lot of oil here, but it’s EXPENSIVE to drill it. We can be energy independent, but about $120 a barrel would be the new norm.

Washington Fancy on March 17, 2012 at 10:39 AM

In a thread full of idiotic posts
Inignort on March 17, 2012 at 10:37 AM

More irony. It never ends with you freaks.

CW on March 17, 2012 at 10:39 AM

And that is already built into the futures.

Read and learn: http://www.smartplanet.com/blog/energy-futurist/oil-demand-shift-asia-takes-over/400

libfreeordie on March 17, 2012 at 10:40 AM

You guys got it all wrong. The president has a point. If we inflate our tires,use wind power, solar energy, algae, sprinkle some fairy dust, problem solved. Jezz, what a bunch of flat earthers.

newportmike on March 17, 2012 at 10:40 AM

Read and learn:
libfreeordie on March 17, 2012 at 10:38 AM

FO you pretentious bit8h.

CW on March 17, 2012 at 10:40 AM

I know it’s a radical idea but check it out: google “abiotic oil.”. Here’s a link for starters. http://www.rense.com/general63/staline.htm MaxMBJ on March 17, 2012 at 10:36 AM

Otherwise the question to be answered is, How did all those dinosaurs get five miles under bedrock to die and become oil?

Plus, I want to see how the decaying process increases the energy of flora and fauna.

Akzed on March 17, 2012 at 10:41 AM

If tomorrow, some farmer dug up a 1 ton block of gold on his land, prices would drop worldwide on Monday in anticipation of that new supply. That’s the way it works.

RadClown on March 17, 2012 at 10:32 AM

Hmmmm…..sure. But, gold is not a consumable where oil is. Meaning that you have to keep putting gas in tank or you can’t move the car, but you only have to buy the gold trinket once, and you will always have it and its value. I have a box of receipts for gas purchases. I have the gold ring I bought 20 years ago, still on my finger.

So as more gold is mined, the total supply increases. With oil, the more you find, the more it gets consumed.

Apples and oranges.

BobMbx on March 17, 2012 at 10:42 AM

So, yes, we can produce a lot of oil here, but it’s EXPENSIVE to drill it. We can be energy independent, but about $120 a barrel would be the new norm. Washington Fancy on March 17, 2012 at 10:39 AM

The oil on public lands is in many cases extractable with good ol’ regular wells. It’s just that the envirowhackos and Democraps won’t allow it so they can maintain control.

Akzed on March 17, 2012 at 10:44 AM

Present all the silly facts and figures you want but nobody really knows what will happen until we try.

No, we can predict it through simple microeconomic models.

If the US *quadrupled* oil production over the next decade, it would come nowhere close to meeting demand growth or bringing what will become skyrocketing prices under control.

Can you try to comprehend the meaning of global oil demand increasing by 50% in just over a decade? The entire world cannot come even close to meeting that type of demand. The only chance the US has to protect itself to the coming economic shock is to transition to other fossil fuels – no, solar cannot scale quickly enough. Forget about the ‘save the world with green’ idiots for a moment and don’t counter with another argument that’s just as foolish.

bayam on March 17, 2012 at 10:45 AM

I have no claim to any oil on private lands. I’m talking about oil on public lands. That belongs to the people. The people have a right to be compensated for a resource on a public land.

trigon on March 17, 2012 at 10:31 AM

So you’re arguing that, prior to the BP oil spill, BP should have been compensating every American with a percentage of the profts earned per barrel? Because they weren’t drilling on “private” land.

libfreeordie on March 17, 2012 at 10:45 AM

libfreeordie on March 17, 2012 at 10:34 AM

You need therapy.

Global market? Then why is it cheap in Venezuela?

Government fiat.

But free markets work best despite what our Lying Liar in Chief says.

IlikedAUH2O on March 17, 2012 at 10:45 AM

Our Liar said that no expert or economist claimed that there was a solution to our present high gas prices.

And Newt was out to lunch.

That is a lie.

IlikedAUH2O on March 17, 2012 at 10:46 AM

IlikedAUH2O on March 17, 2012 at 10:45 AM

It’s .12 a gallon in Venezuela.

Akzed on March 17, 2012 at 10:47 AM

Fine, but oil pumped and refined here would be cheaper than oil $hipped in from Muslimville.

Akzed on March 17, 2012 at 10:20 AM

Why would an oil company willingly sell market to a domestic market when there are more profits to be made on a global market?

libfreeordie on March 17, 2012 at 10:25 AM

Who owns the oil overseas? Certainly not the private oil companies.

Kermit on March 17, 2012 at 10:47 AM

Don’t you just love the conservatives who now decide that every US citizen has an ownership interest in every drop of oil in the country?

This runs from Bill O’Reilly to some of the worthies around here.

This is further left than our administration!

I know! By far this is my favorite HA thread ever for this reason. It really does expose how few hardcore conservatives even understand what they claim to believe in, and what they claim to despise.

libfreeordie on March 17, 2012 at 10:48 AM

Oh hi there Hugo Chavez! Didn’t think I’d see you on here.

Hmmm? What’s that? You’re not Hugo Chavez? How odd, because it looks an awful lot like you’re proposing that the state could claim some control over American oil reserves and distribute those resources themselves at a discounted price. There is no other way you could prevent multi-national oil companies from selling U.S. oil supplies to the global market.

libfreeordie on March 17, 2012 at 9:38 AM

I think you need to read what I wrote again. This time concentrate on what I said, not what you want to see. Thanks!

jnelchef on March 17, 2012 at 10:48 AM

Even if we opened the floodgates and were able to jack up our domestic production by 20% overnight, it wouldn’t do much to move the needle on gas and oil prices in general.

So why do we pay farmers NOT to grow crops to keep the price of those crops off the market?

Wander on March 17, 2012 at 10:48 AM

I know it’s a radical idea but check it out: google “abiotic oil.”. Here’s a link for starters. http://www.rense.com/general63/staline.htm MaxMBJ on March 17, 2012 at 10:36 AM

Otherwise the question to be answered is, How did all those dinosaurs get five miles under bedrock to die and become oil?

Plus, I want to see how the decaying process increases the energy of flora and fauna.

Akzed on March 17, 2012 at 10:41 AM

The “dinosaurs” are microscopic organisms like algae which die and decompose very slowly in very salty water where seas once existed.

Kermit on March 17, 2012 at 10:50 AM

IlikedAUH2O on March 17, 2012 at 10:45 AM

Why is oil cheap in Venezuela? Because the state owns oil reserves and reaps the profits on its global sale. They then subsidize oil distribution within the nation, keeping the price low. It is essentially a form of socialist redistribution. Aren’t you opposed to that?

libfreeordie on March 17, 2012 at 10:52 AM

I read an article over a year ago that talked about scientists at a Texas university that had proven they could convert coal to oil… at a cost less than $1/gallon. Lots of things can be converted to oil. I’ve read about bio-material and garbage being converted to oil. But what is significant about this is the energy density of coal. It’s almost a one-to-one conversion (whereas all the other approaches use LOTS of input).

We don’t have a problem with energy production. We have a problem with liberals fools trying to restrict our opportunities so they can rule over us like tyrants.

dominigan on March 17, 2012 at 10:32 AM

YES. Build those factories beside the idled coal mines in West Virginia and Wyoming!

slickwillie2001 on March 17, 2012 at 10:52 AM

IlikedAUH2O on March 17, 2012 at 10:45 AM

It’s .12 a gallon in Venezuela.

Akzed on March 17, 2012 at 10:47 AM

It’s state owned oil company loses BILLIONS annually and its oil production has declined by 35% over the last 9 years, when “white collar” workers went on a general strike and were dismissed.

The two countries with proven reserves greater than Saudi Arabia are….

Canada & Venezuela

Kermit on March 17, 2012 at 10:52 AM

It is estimated that the USA could cut down imports by about 5 million barrels per day, “IF” they changed over to natural gas for our trucking fleet. Increase oil production from 7 to 10 million per day is doable. That would decrease our import needs from 13 million to 5 million per day. Progress in the right direction.

ny59giants on March 17, 2012 at 10:54 AM

Here is the US government report on our fossil fuel supplies.

Charlemagne on March 17, 2012 at 10:55 AM

I read an article over a year ago that talked about scientists at a Texas university that had proven they could convert coal to oil… at a cost less than $1/gallon. Lots of things can be converted to oil. I’ve read about bio-material and garbage being converted to oil. But what is significant about this is the energy density of coal. It’s almost a one-to-one conversion (whereas all the other approaches use LOTS of input).

We don’t have a problem with energy production. We have a problem with liberals fools trying to restrict our opportunities so they can rule over us like tyrants.

dominigan on March 17, 2012 at 10:32 AM

YES. Build those factories beside the idled coal mines in West Virginia and Wyoming!

slickwillie2001 on March 17, 2012 at 10:52 AM

We have heard that over and over and over again. WRONG.

Coal to Liquids has existed for over half a century. Sasol, the South African Country actually has the best proven technology out of necessity during the embargo of South Africa during “Apartheid” days.

I was involved with a CTL demonstration plant at Shell Refining, Deer Park (Houston) TX. It is not that simple. Sure it may exist in the lab at some university but the most efficient way to take bauxite to aluminum worked fine in a lab then at the first commercial plant made copious amounts of fully chlorinated PCB’s.

Stay away from Rense et al, those internet sources (like Free Republic) will only dumb you down.

Kermit on March 17, 2012 at 10:57 AM

Kermit on March 17, 2012 at 10:50 AM

We have half a dozen solutions sitting on the shelf.

Our leader wants to remove fossil fuel. If the peasants suffer, so be it. Remember Stalin and the breaking eggs to make omelets remark?

Nothing can be done in months but Nat Gas, fuel cells, and shale exploitation and drilling are all there and have been.

He wants algae or solar flashlights or some other comic book idea. Guy is not too good technically which I can forgive until I see how he hurts people.

The $5 is not too bad anyway if you look at most of the world. We should be paying $9. But taxi drivers..the poor…

IlikedAUH2O on March 17, 2012 at 10:58 AM

Fine, but oil pumped and refined here would be cheaper than oil $hipped in from Muslimville.

Akzed on March 17, 2012 at 10:20 AM

Why would an oil company willingly sell market to a domestic market when there are more profits to be made on a global market?

libfreeordie on March 17, 2012 at 10:25 AM

Oil company produces and sells on international market. Selling closer to the point of origin reduces the marginal cost of production by reducing transportation/tariff import/export costs. Oil company can now increase net profit by either selling at market price the oil with lower cost of production, or it can increase sales by undercutting other suppliers with higher marginal costs of production.

libbie appears to be a person who starts from a conclusion and then rallies all the supporting arguments, no matter how silly, and ignores all contrary evidence.

Odysseus on March 17, 2012 at 10:28 AM

Dear God, so many…so many of you are just willfully ignorant on the nature of the global oil market. Its like a tsunami of ignorance.

libfreeordie on March 17, 2012 at 10:34 AM

Actually, Odysseus is quite right, and history bears him out. The willful ignorance here is on your part, not his.

novaculus on March 17, 2012 at 10:59 AM

Dear God, so many…so many of you are just willfully ignorant on the nature of the global oil market. Its like a tsunami of ignorance.

libfreeordie on March 17, 2012 at 10:34 AM

“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.”

-Ronaldus Maximus-

MooCowBang on March 17, 2012 at 10:59 AM

It is estimated that the USA could cut down imports by about 5 million barrels per day, “IF” they changed over to natural gas for our trucking fleet. Increase oil production from 7 to 10 million per day is doable. That would decrease our import needs from 13 million to 5 million per day. Progress in the right direction.

ny59giants on March 17, 2012 at 10:54 AM

Sensible ideas. Also electric engines for trucking make much more sense than the Chevy Volt. Since charge stations could be placed along predictable routes.

libfreeordie on March 17, 2012 at 10:59 AM

The “dinosaurs” are microscopic organisms like algae which die and decompose very slowly in very salty water where seas once existed. Kermit on March 17, 2012 at 10:50 AM

So oil sinks in water? Before it becomes oil?

Akzed on March 17, 2012 at 10:59 AM

libfreeordie on March 17, 2012 at 10:52 AM

Yes, I am opposed to that because I have a brain and some education. The side effects of state controlled anything greatly outweigh the benefits with only limited exceptions.

IlikedAUH2O on March 17, 2012 at 11:01 AM

libfreeordie on March 17, 2012 at 10:59 AM

And all you probably know about is eight hour downtimes. What a deal!

IlikedAUH2O on March 17, 2012 at 11:02 AM

Oil company produces and sells on international market. Selling closer to the point of origin reduces the marginal cost of production by reducing transportation/tariff import/export costs. Oil company can now increase net profit by either selling at market price the oil with lower cost of production, or it can increase sales by undercutting other suppliers with higher marginal costs of production.

God you’re thick. U.S. oil demand has steadily fallen over the past decade. Yes, decreased. If I was an oil company there is no way that the transportation costs would encourage me to abandon a global futures market thats trending upwards in favor of a U.S. domestic market that is trending downwards. Once again, free market conservatives abandon all their principles when it comes to oil.

libfreeordie on March 17, 2012 at 11:03 AM

… Guy is not too good technically which I can forgive until I see how he hurts people…

IlikedAUH2O on March 17, 2012 at 10:58 AM

Worse than you think. He could have used all the nonsense posted in websites like this, during the BP Macondo Spill, to actually keep the majority in the House during the 2010 elections.

There WERE Dutch Ships and Dutch skimmers out in the Gulf of Mexico within 60 days after the blowout. There was a lot of other very bad information published on what was coming ashore and a whole host of other outright lies. The only real danger was to Louisiana’s coast where grasses meet the sea, not sandy beachs.

Kermit on March 17, 2012 at 11:03 AM

I listed a bunch of technical solutions that work some time ago. Instead we get the Fisher and the Tesla and Solyndra from our leaders.

How do I know they work? Because they are being used.

IlikedAUH2O on March 17, 2012 at 11:04 AM

The “dinosaurs” are microscopic organisms like algae which die and decompose very slowly in very salty water where seas once existed. Kermit on March 17, 2012 at 10:50 AM

So oil sinks in water? Before it becomes oil?

Akzed on March 17, 2012 at 10:59 AM

It is covered up with silt that forms sedimentary rock layers, like SHALE. Some becomes oil, some natural gas, and most of the rest becomes nothing.

Kermit on March 17, 2012 at 11:05 AM

Kermit on March 17, 2012 at 11:03 AM

I was a volunteer in the Gulf after the spill.

IlikedAUH2O on March 17, 2012 at 11:05 AM

Hot, oily, dirty, lonely, depressing work.

IlikedAUH2O on March 17, 2012 at 11:06 AM

I went down when this administration was telling everyone not to go.

IlikedAUH2O on March 17, 2012 at 11:07 AM

But not having to buy ANY from the ME would not only lower costs, but feel schweet.

Akzed on March 17, 2012 at 10:28 AM

Not buying from Hugo would feel schweet, too.

The “dinosaurs” are microscopic organisms like algae which die and decompose very slowly in very salty water where seas once existed.

Kermit on March 17, 2012 at 10:50 AM

Looks like Barry was right about algae, just not in the way he intended. Seriously, though, you’re right. The “dinosaurs to oil” notion is just a popular myth.

Bigfoot on March 17, 2012 at 11:09 AM

Remember? Audubon and the Sierra club and everyone else said there was nothing for anyone to do? The administration created websites telling folks to stay away. You couldn’t help the suffering critters or the folks going broke or killing themselves.

IlikedAUH2O on March 17, 2012 at 11:09 AM

IlikedAUH2O on March 17, 2012 at 11:05 AM

The “Dutch” (actually Netherlands Antilles but for tax purposes) ships were fitted with the Dutch open ocean skimmers at Gulf Copper and Marine Works’ yard at Galveston before heading out to sea.

Kermit on March 17, 2012 at 11:10 AM

IlikedAUH2O on March 17, 2012 at 11:09 AM

Vast majority of the “fisherman” could not make valid claims due most of their catch is sold for cash with no accounting to back up their claims. Many live like paupers but have loads of $100′s stashed away.

Kermit on March 17, 2012 at 11:12 AM

Another Obama myth: fuel efficiency (a la tire inflation gauge) will reduce consumption. We’ve increased car fuel efficiency by 30%. Trouble is, this led to increase in car size, travel, etc. Net result: no fuel savings.

Read about it here: http://www.wyattresearch.com/article/the-myth-of-fuel-efficiency/24648

Obama, like most liberals, does not have a creative mind. He has a cliche-addled brain.

MaxMBJ on March 17, 2012 at 11:13 AM

I love this story. Our Liar in Chief had just said to stay home and I pulled up to a federal park. I found the park ranger and expressed the confusion and went on a tirade of talking about whether I was needed.

The Ranger with his assistant who had come a runnin’ since I had five young buzz cut guys with me, just ask “What size boots do you wear?”.
Then told her to go get protective gear.

I said I was glad he had the clothes. He said wait till you are in this hear for hours.

More former Obama volunteers had come to hate him and don’t mention the locals. Worse that I dislike the man.

IlikedAUH2O on March 17, 2012 at 11:16 AM

Energy independence = thorium reactors + improved energy grid + (most likely) hydrogen fuel cells (a few decades down the road).

That said, opening up the land to oil exploration will have a non-negligible impact on oil prices today, and will ensure that when oil shocks hit in the future we at least make a profit off them.

JSchuler on March 17, 2012 at 11:18 AM

libfreeordie on March 17, 2012 at 11:03 AM

Ridiculous. I clearly took into account the fact that the market is global. If the market was perfectly homogenous, the pre-tax price of oil would be the same everywhere. It isn’t.

Doesn’t have a clue. Impervious to any fact that contradicts preposterous but deeply-held beliefs necessary to maintain fantasy world in which it resides.

novaculus on March 17, 2012 at 11:19 AM

Kermit on March 17, 2012 at 11:12 AM

Yea. But they were not brain surgeons. Much like truckers or whomever.

Some were running boats with booms upside down.

I have libs get absolutely irrational over my stories. And I’ll polygraph on the salient facts.

One woman just accused me of KILLING wildlife. “I hope you didn’t use freshwater!” she said.

Darn. I had Phds and marine biologists and Coast Guard peeps everywhere.

And I would use fresh water? I was drinking that too fast, fool!

IlikedAUH2O on March 17, 2012 at 11:23 AM

Why would an oil company willingly sell market to a domestic market when there are more profits to be made on a global market?

libfreeordie on March 17, 2012 at 10:25 AM

Wow…you truly are an imbecile.

Not only does your comment not make any sense whatsoever, but it makes no sense…whatsoever. Lets try to break it down, shall we?

Im guessing (which is the best I can do with liberals) that you are asking why oil companies are trying to make a profit selling their goods in the U.S. instead of overseas?

If this is your question, then the answer is simple. No one uses more oil than the U.S. It is our lifeblood. We use it for everything. So consequently, we (the U.S.) are the biggest market for oil. I dont think there is any question on this fact. When oil companies know that, why would they brave unqulified sources of potential revenue, when they can sell in an absolute qualified source of kinetic revenue.

Understandably, usually there is no profit without risk, but in this case, why bother?

Now, its not to say that there is no market for oil overseas / globally. Of course there is. But there is no market like the U.S. market. Its pretty simple. No one is stopping oil companies from selling globally, except the oil companies themselves. Why make 1 dollar when you can make 100 from the same product.

Now, if Oblammo really and truly wants to bring down oil prices (so very highly doubtful), all he has to do is:

1) Allow more drilling on U.S. soil and waters. If we have the oil here, and can attain it for pennies on the dollar, we dont have to pay someone over there to bring it to us.

and

2) Stop using taxpayer dollars to fund ill-advised speculation on “emerging energy products” like wind and solar. Im not saying that they will not be viable in the future. Im saying that they are not viable now. If they were, then he would not have to steal tax payer monies to fund companies that have no outside backing from private investment entities.

and

3) Stop closing down or over-regulating existing power plants in a phony and underhanded attempt to use taxpayer monies to subsidize wildly speculative risks on low-to-no return investments in the name of politicizing the energy sources of the United States. There should be no government interference in either the investing or speculation of “emerging energy sources”. This is for the free markets to decide. Instead of wasting our money on Solyndra-type fiascos, it should be used to shore up existing proven energy producers so that they can get their product out to market for U.S. citizen consumption at a cheaper rate.

Actually, Odysseus is quite right, and history bears him out. The willful ignorance here is on your part, not his.

novaculus on March 17, 2012 at 10:59 AM

Quite correct.

I hope this clears up your lack of understanding about how supply and demand, free market capitalism, and price points all work to together to bring the consumer the best product for the cheapest price.

MooCowBang on March 17, 2012 at 11:29 AM

“I read an article over a year ago that talked about scientists at a Texas university that had proven they could convert coal to oil”

Ummmm, obviously you don’t “get out” much. The Nazis were doing the coal to oil thing big time in WWII. It is a very old technology.
Why we in the US are pursuing this as alternative energy source is beyond me. The USGS estimates that the potential coal resources of Alaska is 4.5+ trillion tons. Most of that with today’s technology is unrecoverable (like the 1.5 trillion tons they think that lies offshore). Even still, out of those 4.5 trillion tons there lies a vast amount of coal that could be used for fuel. All that is missing is the political will to make it so.

Tarnsman on March 17, 2012 at 11:31 AM

Seems Bayam and Libfree should be spending their time,not with the 20 or so of us on this thread, but with Obama as he has spent a ton of money celebrating “his ” increase in oil production. Seems he has a little more control than us. Just a tad.

CW on March 17, 2012 at 11:34 AM

So as more gold is mined, the total supply increases. With oil, the more you find, the more it gets consumed.

Apples and oranges.

BobMbx on March 17, 2012 at 10:42 AM

In order for anything to have value it must have four characteristics: Demand, Utility, Scarcity and Transferability. Not every commodity or product has those things in equal parts of course, but whether something is consumable or not is not part of its inherent value. Gold can be recycled and put back on the market, but that is just a distinction in the way it can be supplied.

RadClown on March 17, 2012 at 11:38 AM

Tarnsman on March 17, 2012 at 11:31 AM

Cost cost cost. Sasol (South African company) has been doing it for decades but ONLY because of the oil embargo of SA during Apartheid.

Please, forget all the hype and the wannabe “Popular Science” sources.

Kermit on March 17, 2012 at 11:39 AM

Tarnsman on March 17, 2012 at 11:31 AM

Every heard of DOE? They poured BILLIONS into demonstration plants of technology developed by different companies, back in the 1970′s and 1980′s.

Kermit on March 17, 2012 at 11:40 AM

Oh and please don’t get me started with anyone’s idea the “Fischer-Tropsch” is some secret hidden gem. It is only a type of reaction widely used in the petrochemical industry. A lot of those FP processes have recently been replaced with more efficient low pressure reactions.

BTW, if you use nitrogen fertilizer you are using products of Fischer-Tropsch. That is how ammonia is made. It is also how methanol is made.

Kermit on March 17, 2012 at 11:43 AM

Just FYI, I won’t be responding to your posts anymore. You can continue to address me if you like. libfreeordie on March 17, 2012 at 10:23 AM

Aw, poor CW, he can talk to the hand all he likes!

Hey libf, somehow we got along without your wretched input for years around here, ok?

Akzed on March 17, 2012 at 10:31 AM

…I know someone whose posts he/she can respond too!…Dr. Telsa! Give them their own thread!
Input?!
(Last night was the first time I ever actually SAW mental illness on the web!)

KOOLAID2 on March 17, 2012 at 11:50 AM

For the first time in world history, we have a leader of a nation committed to lowering his country’s standard of living…Obama as we know is committed to higher energy costs. Why do we know this? Well, energy secretary Chu and interior secretary Salazar have said that they are not concerned with the price of gas. As well, we know candidate Obama said that under his plan, electricity costs will necessarily skyrocket…Now, since everything we consume including food, gas for our cars and heating and cooling of our homes requires gas or electicity, it is clear that Obama means to lower our standard of living. He wants a poorer America…Our President is committed to a poorer America…What in the wide wide world of sports is wrong with this man??? And yet, all the whle this man lives a spectacularly extravagant lifestyle on the taxpayers credit card…NUTS!

Nozzle on March 17, 2012 at 11:53 AM

For the first time in world history, we have a leader of a nation committed to lowering his country’s standard of living… He wants a poorer America. Our President is committed to a poorer America. What in the wide wide world of sports is wrong with this man??? And yet, all the whle this man lives a spectacularly extravagant lifestyle on the taxpayers credit card…NUTS!

Nozzle on March 17, 2012 at 11:53 AM

Agreed. Why can’t one of the GOP candidates express these type of sentiments as simply/eloquently as you did? There are so many other points like this on which one could and should shred him!

yubley on March 17, 2012 at 11:59 AM

I wonder why we don’t make more use of natural gas for heating in the Northeast now that gas seems to be permanently cheaper than oil. A substantial portion of American oil use (10%?, 30%?) is for home heating oil. I live 200 yards from the main Texas-Boston pipeline and spend several thousand dollars a year on oil. It appears at least on the surface to be a cheap fix. I know that a barrel of home heating oil will convert to less than a barrel of auto fuel (and refineries would have to shift a bit), but it seems to me to be an easy way to quickly and cheaply substitute abundant gas for oil. It would take some time, but there would be a permanent drop in demand.

levi from queens on March 17, 2012 at 11:59 AM

We fought to bring capitalism to the globe, but global capitalism sucks sometimes. If you are an oil producer and there’s a global market that offers you $100 a barrel and the U.S. government (hypothetically) which offers you $50 a barrel. Which would you choose? The profit principle means that domestic oil suppliers have *zero* incentive to sell oil domestically for less than they can get for it on the international market.

What’s sickening is that the GOP is trying to purposefully obfuscate this fact and continues to blame Obama for gas prices that are set by a global market.

libfreeordie on March 17, 2012 at 9:32 AM

You seem to assume that the ‘government’ offers what it wants to producers regardless of the market price.
How do you reach that assumption? The government does not set the domestic price of oil – as you well know. Why are you trying to lie about that?

If the US producers put more oil onto the global market, it will result in a global reduction in the price of oil -as it has in the past. As you also know quite well.
And you also know that the ‘global market’ is only a part of the price of gas.
“What’s sickening is that the GOP democrats is are trying to purposefully obfuscate this fact…” and the fact that the energy crisis is the fault of your pResident and his crony capitalist pals in the “green energy” scam.

Solaratov on March 17, 2012 at 12:08 PM

Tarnsman on March 17, 2012 at 11:31 AM

For the last time, it is not oil.

It is liquid coal and has drawbacks.

http://www.worldcoal.org/coal/uses-of-coal/coal-to-liquids/

IlikedAUH2O on March 17, 2012 at 12:12 PM

Something that is not being taken into account here is that the price of oil is pegged to the dollar and this administration has printed money thereby devaluing it. The market takes this into account causing higher prices per barrel.

tommy-t on March 17, 2012 at 12:15 PM

libfreeordie on March 17, 2012 at 9:32 AM

Did anyone ask XOM how much oil we could produce domestically if the Dems didn’t act like a dog fighting a bath over the whole thing?

Oh, go back to Senator John Kerry for starters. You know, the man who saved the arctic and who never owned a big SUV? That guy.

Then we have the anti-nuke and anti-coal zealots…

a Tesla or Lief car makes sense for me since my electical power comes from ..drumroll..OIL!

IlikedAUH2O on March 17, 2012 at 12:17 PM

Then we have those huge batteries in the trash and ground water…

IlikedAUH2O on March 17, 2012 at 12:18 PM

No, the problem is global demand. The middle class in the developing world, particularly India and China, is growing every single year. They are (like Americans) demanding a particular lifestyle, buying cars, heating/cooling their homes for year round comfort etc. etc. This means that the global demand for oil is much, much, much greater than could be accounted for by an increase in U.S. production. We would be sacrificing our beach fronts (an the tourism dollars there), we would enrich multi-national oil companies and the price of gas might fluctuate for a few months, at best. Sounds like a great idea!

libfreeordie on March 17, 2012 at 9:44 AM

And yet, you leftists are hell-bent on destroying the middle class here in America.

I’m beginning to think that you don’t know sh!t from Shinola when it comes to the “global market” – or any other market.

You are saying the same thing that democrats/leftists have been saying for years: “If we have more oil, it won’t effect the price of gas — and, if it did, it would only be temporary. So let’s not drill for any more oil. Besides, it’d take ten years to develop the oil field, so we’ll wait for ten more years and see what happens.”

And with it all, I’d bet that you haven’t switched to riding a bicycle to work and shop.

Solaratov on March 17, 2012 at 12:20 PM

For the life of me I will never understand why liberals hate oil. Oil has resulted in a huge increase in the quality of life across the globe. Is it willful ignorance? Is it an agenda driven narrative? Is it because they don’t what folks to have a better quality of life. Is it because they do not embrace and understand history. What exactly is the reason for this hate of oil?

Bmore on March 17, 2012 at 12:38 PM

.=? .=?

Bmore on March 17, 2012 at 12:39 PM

I will save that post for later when you start claiming fees are not taxes yourself. We know you have.

CW on March 17, 2012 at 10:17 AM

Hasn’t libfree always maintained that a fee is not a tax?

Solaratov on March 17, 2012 at 12:39 PM

I might also ask. Why do liberals hate capitalism?

Bmore on March 17, 2012 at 12:40 PM

CW on March 17, 2012 at 10:12 AM

Just FYI, I won’t be responding to your posts anymore. You can continue to address me if you like.

libfreeordie on March 17, 2012 at 10:23 AM

In other words, you Lost the Debate.

Del Dolemonte on March 17, 2012 at 12:43 PM

Dear God, so many…so many of you are just willfully ignorant on the nature of the global oil market. Its like a tsunami of ignorance.

libfreeordie on March 17, 2012 at 10:34 AM

“She’s Breaking Up! She’s Breaking Up!”

Del Dolemonte on March 17, 2012 at 12:45 PM

This means that the global demand for oil is much, much, much greater than could be accounted for by an increase in U.S. production. We would be sacrificing our beach fronts (an the tourism dollars there), we would enrich multi-national oil companies and the price of gas might fluctuate for a few months, at best. Sounds like a great idea!

libfreeordie on March 17, 2012 at 9:44 AM

If we increase our supply, China can purchase more of our oil to offset what we borrow from China to pay for Sandra Flukes birth control pills.

You are an economic moron, by the way. When Bush opened up drilling in 2008, the price of gasoline dropped a dollar a gallon to $1.85 per gallon. When the democrats won the house and senate, they immediately shut down offshore drilling and prices have risen. Obowa, who received 1 million from BP for his campaign, closed offshore drilling in the gulf, where 1 well was producing 10,000 bpd. So much for the “it takes 10 year to produce oil theory”. A new rig there could drill 15 wells like that per year reducing our foreign oil dependence TODAY.

Did you cry for oil companies when prices dropped? The reason oil companies make money is to pay their stockholders, people like you and I, that own stock in these companies in our 401k’s. You can thank the feds for the ridiculous rules, permit fees and operating expenses issued on oil companies. The real villian is the federal gov’t that steals 40% in taxes on every gallon of gas sold and 20% more in fees and fines levied in drilling permits issued and even more in taxes collected for doing nothing. Talk about a way to kill a business.

When you hear what oil companies make, keep in mnid that is gross income and they typically make 8% to 10% profit per year. The federal gov’t TAKES 45% in company profits for doing nothing.

dthorny on March 17, 2012 at 12:45 PM

When will the msm report on Exxon’s record profits from the high gas prices? And will they ever report on how high prices only seem to hurt the poor?
Who am I kidding.

multiuseless on March 17, 2012 at 12:46 PM

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