Topic: Oil on the Water

[groze]

At 2:25PM  the oil finally stopped flowing. Hopefully the latest fix will work.

That is just a temporary fix until a relief well/tank comes in.   BP should of had shut off values and a bypass pipe. 

If the U.S. has oil come from our own wells in the gulf and other locations.  Why is the U.S. not using them instead of relaying on foreign oil?  I think we could have lower gas prices if the U.S. did this.  JMO

[mackbig]

Not so much.  Supply and demand creates price.  We are net exporters of oil, and we pay as much (more after tax) than the US for gas.  Unless the government takes over the oil patch (a la Venezuela) gas prices wont go down (relative to market prices) no matter how much oil you produce.

Andrew

If the U.S. has oil come from our own wells in the gulf and other locations.  Why is the U.S. not using them instead of relaying on foreign oil?  I think we could have lower gas prices if the U.S. did this.  JMO

[groze]

Not so much.  Supply and demand creates price.  We are net exporters of oil, and we pay as much (more after tax) than the US for gas.  Unless the government takes over the oil patch (a la Venezuela) gas prices wont go down (relative to market prices) no matter how much oil you produce.

Andrew

If the U.S. has oil come from our own wells in the gulf and other locations.  Why is the U.S. not using them instead of relaying on foreign oil?  I think we could have lower gas prices if the U.S. did this.  JMO

I am from the U.S.   Let me rephrase my question.

I read & heard the U.S.& some other countries has dependencies on foreign oil. Why doesn't the U.S. start using its own oil,  instead of relying on another country's oil?

If the U.S. started using it own oil it could save money & make them money as well by selling to Canada.   It could even save consumers money at the pump in the long run. 

[SlowModem]

I am from the U.S.   Let me rephrase my question.

I read & heard the U.S.& some other countries has dependencies on foreign oil. Why doesn't the U.S. start using its own oil,  instead of relying on another country's oil?

If the U.S. started using it own oil it could save money & make them money as well by selling to Canada.   It could even save consumers money at the pump in the long run. 

From what I understand, it's a very complicated question.  And saving consumers money at the pump is not in the interest of the oil companies.  Oil companies want profit.  Oil from the US would end up being sold in Antartica if that's where the most profit would come from.

The only way for the price of gas to come down is for people to quit buying it.  And that's never gonna happen.  So we're gonna get fleeced and the oil companies are gonna make billions every year from now on until the oil runs out or alternative fuels are practical.

I am very glad they got the oil stopped.  I hope it stays stopped and I hope the cleanup will be as fast as possible.

[KeithBC]

Why doesn't the U.S. start using its own oil,  instead of relying on another country's oil?

If the U.S. started using it own oil it could save money & make them money as well by selling to Canada.   It could even save consumers money at the pump in the long run.  

What do you mean start using its own oil?  You'll all have been using up your oil for decades.  There ain't that much of it left.  That's why they have to drill in deep water off the Gulf coast - because all the easy to get at oil is used up.  That's why you have to import oil from Canada and other places.

[mackbig]

groze, I think Greg summed up my point pretty well.  I knew you were talking about the US. That was my point about supply and demand, oil is international so global demand dictates price.  But its not just oil.   

If you use widgets as an example instead of oil, to remove stigma of oil co "greed", politics and green trends etc. (but like any free market business, you want a return for you investment, its billions in profit just for the sheer size, but relative to the equity invested and the expense its a normal ROI)   Its not cheap to drill a hole a mile plus down on the bottom of the ocean....

If the US needed 1000 widgets per year, and they manufactured 1000 widgets, the same widgets are produced around the world, the rest of the world needs 9000 widgets, and global production was 9000.  The going price of a widget is $100.  Do you think the US manufacturers would sell them for $80 to americans?

I fully agree it would be great to be non reliant on foreign oil.  In Canada we are self reliant, but if the Saudi's or any other OPEC's turned off the taps, we would still get hooped at the pumps.

Andrew

[groze]

A little off topic

KeithBc
If we are using are own oil,  why are we still using foreign oil?  I listen to news reports, they say we are depended to much on foreign oil. 

Mackbig
I understand the  supply & demand but that is only part of the equation.  The U.S. stock market affected the prices of the barrels of oil, which effects the price at the pump and from my understanding those barrels come from a foreign county and are priced by OPEC.

In Canada we are self reliant, but if the Saudi's or any other OPEC's turned off the taps, we would still get hooped at the pump

That is part of my point, if Canada is self reliant and OPEC turned off the taps.  Why would it cause the price to go up? I don't know if the U.S. is self reliant or not.

Why are we (U.S., Canada, & other countries) so reliant on foreign oil,  when we have enough in are own country?

[mackbig]

Groze, we are getting off topic... but one last try to convey the "why"

Saudi for example produces 12.5% of daily oil production.  If they stopped, 12.5% of the purchasers would need to find their oil elsewhere.  Since production is somewhat a fixed variable, the demand would far exceed the current supply.  Prices would then skyrocket. Let's say the price went from 50 to 75 per barrel.  In Canada while we dont "need" to import oil, we would be affected because if Suncor could get 75 by selling to the US, why would they sell it within Canada for $50 still?

OPEC does not actually set the oil price, it is traded on the commodities exchanges around the world, which like everything else is perceived supply and demand.  What OPEC does is set productions targets, which in turn ends up making the price what they think is appropriate.

The only way to avoid this is for the government to ban exports, and price fix locally.  The latter being the Venezuela or historically socialist or communist type scenarios.

Andrew

[SlowModem]

The only way to avoid this is for the government to ban exports, and price fix locally.  The latter being the Venezuela or historically socialist or communist type scenarios.

Andrew

Since you mentioned it, don't forget the association of Hugo Chávez and Citgo.

[mackbig]

Gas prices round the world
The CNN one is a little date, but...

http://money.cnn.com/pf/features/lists/global_gasprices/
http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_pricing

Andrew

[KeithBC]

KeithBc
If we are using are own oil,  why are we still using foreign oil?  I listen to news reports, they say we are depended to much on foreign oil. 

Yes you are dependent on foreign oil because the U.S. cannot produce enough oil to meet demand.  At one time, you were self-reliant, but demand went up and supply went down because you'all used it up.  There isn't enough left in the U.S. to meet demand any more.

I don't know if the U.S. is self reliant or not.

Not.

...we have enough in are own country?

Nope, you don't.

[SlowModem]

Yes you are dependent on foreign oil because the U.S. cannot produce enough oil to meet demand.  At one time, you were self-reliant, but demand went up and supply went down because you'all used it up.  There isn't enough left in the U.S. to meet demand any more.

There are a lot of wells in the US that are capped off until the supply runs out and the price goes up.

[mackbig]

Groze,
You quoted the correct people, but my quote is out of context.  Several times throughout the posts I refer to we and Canada in the same sentence, I also refer to the US in the third person.   I am Canadian. So when I said "we" in that quote (three posts ago), we was Canada.

The US is not a net exporter of oil.    You consume 19.5 million barrels per day, and produce 8 million

Andrew

Sorry if I qutoed the wrong person.

KeithBC if mackbig is talking about the U.S. here.   How come the U.S. is the a net exporter oil if we don't have enough to export?   I may not be understand net exports.

[groze]

Groze,
You quoted the correct people, but my quote is out of context.  Several times throughout the posts I refer to we and Canada in the same sentence, I also refer to the US in the third person.   I am Canadian. So when I said "we" in that quote (three posts ago), we was Canada.

The US is not a net exporter of oil.    You consume 19.5 million barrels per day, and produce 8 million

Andrew

Sorry, I removed my other post.

[mackbig]

No need to apologize or remove posts.

Andrew

[Mark / Ohio]

...There are a lot of wells in the US that are capped off until the supply runs out and the price goes up.

Yep.

  "The oil that has been gushing from a BP PLC well since an exploratory oil rig exploded April 20 is an uncomfortable reminder of the potential for leaking at abandoned wells. The well was being prepared for temporary abandonment when it blew out, setting off one of the worst environmental disasters in U.S. history.

Wells are abandoned temporarily for a variety of reasons. In the case of the BP spill, the well was being capped until a later production phase. Oil companies also may temporarily abandon wells as they re-evaluate their potential or develop a plan to overcome a drilling problem or damage from a storm. Some owners temporarily abandon wells to await a rise in oil prices."

Snip from: http://news.yahoo.com/s/ap/20100708/ap_on_bi_ge/us_gulf_oil_spill_abandoned_wells

Also there wells that could be drilled but are not due in part to fears of something happening like just happened in the Gulf. Case in point: http://en.wikipedia.org/wiki/Arctic_Refuge_drilling_controversy

There are still small producing wells for oil and NG all around this area.  Even more to my South and East.  They are a common sight out in the county.  Most have went to electric drive motors but you can still occasionally hear the pop..pop.. of an old style hit-miss drive engine echoing through a valley.



"# Ohio drilled 556 new wells in 2009.
# Ohio produced 5.1 million barrels of crude oil in 2009." ...

Snip and photo from:http://www.oogeep.org/industryinformation/statistics.html

We have not quite "used it all up" yet.  Though granted it is not quite as easy to get it out of the ground as it used to be.  

Here's a town about 10 miles to my SE.  Notice the old picture with all the big derricks back pre 1930's.  There's only one left today on display in the city park.



http://www.bremenvillage.com/history.htm

[mackbig]

The US currently has 21 Billion barrels of proven reserves left, only 8 years worth.  But if oil goes above $100 per barrel and stays there "oil shale" may become worth while, that is estimated to contain another 1.2 trillion barrels of oil.  But at a measly 40 litres per ton of shale, that sound like a tough extraction. In Canada the oil sands were not economically viable till oil hit 30 per barrel. I remember when oil was $10-15 and it seemed we never get there.

I learned quite a bit researching Groze's questions.  Too bad he removed the post, hope did not scare him off.  I was not being or trying to be confrontational, just trying to post facts and get him on the right track.

Andrew

[SlowModem]

I learned quite a bit researching Groze's questions.  Too bad he removed the post, hope did not scare him off.  I was not being or trying to be confrontational, just trying to post facts and get him on the right track.

Andrew

Andrew,

A factual statement is how I took it.

[groze]

The US currently has 21 Billion barrels of proven reserves left, only 8 years worth.  But if oil goes above $100 per barrel and stays there "oil shale" may become worth while, that is estimated to contain another 1.2 trillion barrels of oil.  But at a measly 40 litres per ton of shale, that sound like a tough extraction. In Canada the oil sands were not economically viable till oil hit 30 per barrel. I remember when oil was $10-15 and it seemed we never get there.

I learned quite a bit researching Groze's questions.  Too bad he removed the post, hope did not scare him off.  I was not being or trying to be confrontational, just trying to post facts and get him on the right track.

Andrew

I am still here.    I was just a little  about misunderstand that you were talking about Canada not the United States in an earlier post, when using the word we.     It has nothing to do with you Andrew.  I make mistakes, I am human    

I thought I would start a new thread, to get the this thread back on topic.   

Here is the link to that thread.

http://www.wxforum.net/index.php?topic=8385.0