I don't know if this was addressed in the thread yet, but the reality of the oil markets as it pertains to American energy "independence" is a result of the net flow of money into and out of the country - basically we're oil independent only when our exports of crude oil exceeds our imports of crude oil (both in dollars). Crude oil is not a homogeneous product that is identical around the world. Some of it is classified as "light, sweet", some of it is "sour" or "heavy" and anywhere in between. Oil refineries have a recipe that they put together from a variety of different crude sources that they dial into for their production. So it's likely that a number of our refineries may need the heavier crude out of Venezuela despite the lighter and sweeter crude that might be down the road that is made in the U.S. due to how the refinery was tuned for processing the inputs. It costs money and downtime for a refinery to change the input mix, so logic dictates there's no reason to do that at this time while the oil markets are largely free and open.

It still makes the most sense for the U.S. to maximize fossil fuel production for energy security. One because it helps keep costs lower on the open market. Second, it's good to have access to the energy IF oil markets become closed - whether by an OPEC embargo or some other major world events like the break down of international trade to a new system very similar to what we had in the past with the mercantile systems between countries and colonies. I think Zeihan predicts the U.S. will be a member of a modified form of a mercantile system where it will be the hegemon among a group of like minded countries - likely the U.S., Mexico, Canada, UK, Japan, Australia, New Zealand and South Korea.

So, looks like the Biden admin is now blaming Russia for OPEC giving him the cold shoulder. It's always Russia.

(10-05-2022 07:31 PM)Hambone10 Wrote:  

(10-05-2022 01:05 PM)CrimsonPhantom Wrote:  White House says oil output cuts show OPEC+ ‘aligning with Russia’

Great job on foreign policy, Joe. More on this later.

(10-05-2022 01:14 PM)Redwingtom Wrote:  Your complete ignorance about "Keystone" is astounding.

He didn't "cancel Keystone". He pulled a permit for a pipeline EXTENSION to Keystone. An extension that was around 10% complete, construction was stopped in 2020 by a lower court for environmental issues when trump was president, and SCOTUS effectively killed it when they didn't block the lower courts hold on construction. You won't find any credible industry expert that expected a drop of oil from that extension for Y E A R S, if ever. Additionally, that oil is pretty much all making it here now regardless, just by other means.

Wow... talk about IGNORANT.

First, this is one of the smallest points I made... so of course its the one you pounce on... second, its a distinction without a difference... third, and most on point to your ignorance that you seem determined to put on display...

Oil is a fungible commodity and traded quite freely in the futures market.... meaning oil prices in the future STILL impact oil prices today.... because 'reserves' are traded and calculated... and bought and sold. We can sell oil in the future based on such things....and then we can buy it back and sell it forward again if the delivery is delayed. We can borrow from existing reserves today and sell it... and then buy it back when the new supply comes on even years into the future. That's why they call them futures.... and it also works in reverse.

And now to the REAL kick in your nuts...

I said the canceling of Keystone (which you have pedantically corrected to the canceling of the extension of keystone) AND OTHER UNFRIENDLY SUPPLY ACTIONS (which I expanded on a bit later speaking of the canceling of some leases, but this is only part of it).... And you pounce like a fat kid on a cupcake about a trivial correction to one of them?? PLEASE Tom; be serious.

Quote:Additionally, when I bring up the pandemic, the issue with rising prices is when we emerged from it, not when it hit and nobody was driving! Further, we lost dozens of small oil companies during the pandemic, we lost rig count during the pandemic, and we lost 5 refineries during the pandemic. So when we emerged from it, we could not immediately meet the production we had before it, so less supply, higher prices.

First, did you miss where I spoke of the precipitous drop to below $20?? Pay attention, Tom. I didn't credit Trump for that... In fact, I took it out of my calculation of 'prices under Trump'.

Again, refined prices are not the same as crude prices.... so a drop in refining capacity (your claim) results in a RISE in supply (and a drop in the price) relative to the ability to refine it... I told you I did that intentionally. So once again, you're wrong. As to the rest of it... as I said... According to the BLS (what do THEY know, right?)... and of course... the economy (based in part on the supply chain issues you noted) wasn't at the level of demand as we emerged from the pandemic as we were entering it. You act as if no businesses closed, nobody lost their job or worked from home, OPEC didn't change their supply after getting their teeth kicked in and now having recent high prices... all things I mentioned and you obviously failed to read or comprehend. Yes, global demand for oil is continuing to increase... just as some of the supply that you previously said made no difference would be coming online.

Your failure to comprehend what I'm saying (even if any of the blame for that lay with me) doesn't demonstrate a lack of knowledge or understanding on MY part.

Quote:And you're completely ignoring the fact that US production has steadily increased under Biden. Since Biden took office, US production is up over a million barrels a day. We are expected to reach all-time highs in 2023 based on current estimates, yet prices are still going up. Yeah, seems that it might just be a tad more complex than pulling some cost out of your ass as to what it might have been had Putin did something.

SInce Biden took office? You mean just after the LOW point of the economy?? Are you familiar with the term, 'Dead Cat Bounce"?? OF COURSE it has increased... off of the 2020 lows. Even a blind squirrel occassionally finds a nut.

According to the EIA, the US consumed 6% less fuel in 2021 than in 2018 https://www.eia.gov/tools/faqs/faq.php?id=23&t=10

Quote:You also seem to be completely ignorant of what trumps' deal with OPEC in April of 2020 did to the US oil industry.

So because I don't list every single event during that time, I'm ignorant? Kiss my ass Tom. You said it was a complex issue... and I gave some context to some of that complexity. If you have something to add, feel free... but be an adult.

NOW let's look at your claim...

Here is the headline from the NY Times in April 2020 about this...
https://www.nytimes.com/2020/04/12/busin...virus.html

Oil Nations, Prodded by Trump, Reach Deal to Slash Production

The deal will reduce output by 9.7 million barrels a day. While significant, the cut falls far short of what is needed to bring oil production in line with demand.

What Trump did kept oil from falling below $20... which would have been addining insult to an injured economy... and IN NO WAY explains what happened as demand increased later in 2020 and since. Seriously, Tom... If you're going to try and call me ignorant, you'd better brush up on your own facts... and lear a little about commodities.

Quote:Although, your subtle claim that Putin invaded Ukraine because of Biden was a nice touch.

The facts are what the facts are, Tom. Us being energy independent takes power away from places like Russia, China and OPEC.... and if we are energy independent, we aren't talking about eliminating sanctions against Iran.... and the loss of supply from Russia to the rest of the world is less consequential and removes bargaining power from them and increases the 'cost' to them of our sanctions. Those are all facts. You are free to believe that Putin still does what he does if we are energy independent, but only a fool wouldn't recognize that it is less likely based solely on that one issue and aspect.

(10-05-2022 01:43 PM)VA49er Wrote:  Yet again draining the strategic reserve for political purposes.

Well, that IS the DNC's strategy. Never let a crisis go to waste... even one of your own doing.

(10-05-2022 03:29 PM)Eldonabe Wrote:  It wont run out, it will be severely depleted, but it won't run out - I feel like he will have a change of heart on about November 9th or so when trying to hold down prices doesn't matter to him anymore....

Well, VP Biden's president DID tell the same man (indirectly) that he'd 'have more flexibility' after the election... so at least he's consistent,.

Excellent post. Zero chance you'll get a real response to these points. I haven't scrolled past this yet, but did Tom bring up Trump instead of addressing the issue?

(10-06-2022 07:09 AM)Redwingtom Wrote:  

(10-05-2022 03:28 PM)Hambone10 Wrote:  It's actually WAY worse than that. The strategic reserve is part of our national defense system... and the people mostly responsibe [sic] for the supply of oil are not always friendly with us... so they're draining our ability to fight them

Not how the sale of oil in the SPR works. When the president authorizes a sale, it's done through what's called an exchange. Companies bid on the oil up for release and the highest bidder wins. Those companies, which are normally American companies like Valero, Phillips 66, Chevron, and Motiva Enterprises, etc. then can do with the oil as they please...in some cases it ends up overseas when they don't have a need for that type of oil or if the don't have the capacity to refine it. And here's the important part. Those companies are then required to return that oil back to the SPR, but with a premium of an additional quantity of oil.

So clearly you're AWARE of the futures market, but you still don't understand English.

Yes, they have to return it... IN THE FUTURE... which drives up FUTURE costs and deflates CURRENT costs, just as I described... which essentially makes a LIE out of the idea that these actions bring down the price of oil/gas. They are essentially just pushing that cost into the future, which already includes the impact of inflation...

The point of the SPR that I was referring to was that it also serves as a supply of fuel for our military should a global issue happen and interrupt fuel supplies... and with Russia (according to Biden) controlling Opec now and China not being the best military partner for us, we are in a more vulnerable position... until that fuel is returned... and if there is a supply issue because of war, they would simply push it out perpetually as I said... and then of course beg the government to 'forgive' it, because of the war.

I'm sorry that obvious point went so far over your head.

I COULD add (since you brought it up) that it also means that if inflation overall drops in the future in the US, that it will remain higher for oil and gas in the future because of these acts... Robbing from tomorrow to make yourself look better today.... but the point I made still stands... despite your cattarwalling

(10-06-2022 07:17 AM)Redwingtom Wrote:  

(10-05-2022 07:31 PM)Hambone10 Wrote:  The facts are what the facts are, Tom. Us being energy independent takes power away from places like Russia, China and OPEC.... and if we are energy independent, we aren't talking about eliminating sanctions against Iran.... and the loss of supply from Russia to the rest of the world is less consequential and removes bargaining power from them and increases the 'cost' to them of our sanctions. Those are all facts. You are free to believe that Putin still does what he does if we are energy independent, but only a fool wouldn't recognize that it is less likely based solely on that one issue and aspect.

What's your definition of us being "energy independent"?

Are you using the metric trump claimed...which Biden still meets today...or the one where we totally remove ourselves from imports (and maybe exports) on the global market?

'Energy independent' is not a term that requires constraints such as what you are putting on here. It's a self-evident claim and only a partisan hack like you would try and do what you're doing above. I have argued for it for decades...

That said, since you brought it up....

https://www.eia.gov/todayinenergy/detail.php?id=51338

From 2005-2020, we were on a sharp decline in our net trade... meaning we were exporting more and importing less.... to the point where yes, under Trump, we were a net exporter. That took a SHARP turn almost the moment coinciding with Biden's election... and is only PROJECTED now to drop again... but it is impossible to deny that a 15 year trend towards more exports and less imports suddenly and immediately changed course.

My point is that had the trend continued, that we could have better absorbed the interruptions caused by Russia and perhaps even been a 'SUPPLIER" to Europe, which would also lessen Russia's influence over them.... Hint... nations ALL publicly support sanctions against 'bad actors' in the world... but when those words mean greater hardship for their people and they are coming up for election, their resolve is often tested and sometimes loyalties are betrayed.... Think France, Iraq and Telecom.

I stand by my comments and nothing you've written above in any way refutes anything I've said. All you've tried to do is reframe my comments to IMPLY that they are not on point or are incorrect... and you failed.

Carter is laughing

Gets better.. They want to reduce more offshore drilling but want to ease sanctions against Venezuela to get some relief.

(10-06-2022 11:06 AM)Hambone10 Wrote:  So clearly you're AWARE of the futures market, but you still don't understand English.

Yes, they have to return it... IN THE FUTURE... which drives up FUTURE costs and deflates CURRENT costs, just as I described... which essentially makes a LIE out of the idea that these actions bring down the price of oil/gas. They are essentially just pushing that cost into the future, which already includes the impact of inflation...

Yes, Brainiac, everyone is aware of this. But the reason it was used now was to lower prices at the pump when they're at the levels they were, over $5 per gallon. Then the hope is that when the oil prices come back down, prices have eased and the effect of the prices then increasing is easier to absorb because prices would then be lower.

It's the main reason why I've been on record in the past as not being a big fan of using the SPR for a temporary relief at the pump. Incidentally, the Department of Treasury estimates that the SPR release lowered the price of gas per gallon between $.17-$.42 in one method and $.38 in another.
https://home.treasury.gov/news/press-releases/jy0887

There is just NO worthwhile debate to claim that gas prices did not come down as a result of the SPR release, just as there is no debate that they'll likely go back up when it's all returned.

WaPo Columnist on OPEC Decision: Biden Did ‘Fist Bump’ with MBS, Now, Saudis are Giving More Money to Putin

Quote:Washington Post columnist Eugene Robinson had some fierce criticism for Biden’s foreign policy and for the rising threat in Europe stemming from the Russia-Ukraine war. Watch:

https://rumble.com/v1mzx2g-eugene-robins...ney-t.html

“Eugene Robinson, I want to bring you in here, because you look inside Russia, you look around the world, whether you’re looking at Modi, or Xi, or Erdogan. And Vladimir Putin is isolated. He doesn’t have many friends at home or left on the world stage,” Joe Scarborough said. “But you write about one of them this morning, and that would be MBS in Saudi Arabia, who gave Vladimir Putin a big, big 70th birthday present by giving him a lot more money to kill a lot more Ukrainians. As you said, Biden gave MBS a fist bump, his reward: a gut punch. Explain.”

“Well, you know, the Saudis, who lead OPEC, engineered this cut in production, OPEC+ oil production of 2 million barrels a day, which will raise the price of oil, and that’s all good for Vladimir Putin, and obviously MBS knows that,” Robinson said. “This is his call. This is — you know, Biden — President Biden tried to sort of reset this relationship on a more reasonable footing, and, you know, no good deed goes unpunished. He went and did the fist-bump, and now, yeah, so more money for Putin.”

“I mean, it is fascinating because on the one hand, you know, world leaders are not coming out, you know, in India and China or whatever,” Robinson went on. “They have doubts about this war than he’s waging, MBS probably has doubts about it, too. Yet, they’re not taking actions to put pressure on Putin to stop what he’s doing.”

Robinson then drew parallels to the origins of World War I.

“I keep looking back to the years before World War I and the sort of great power dynamic that seems to be taking shape… before World War I, there was this sort of momentum that built, that nobody quite knew how to stop,” he went on. “So, now, you know, you look at Putin talking about existential threats to Russia. Well, in fact, his invasion has moved the center of gravity of NATO to the east, closer to his borders, and has strengthened NATO, and now Finland and Sweden want to come into NATO, which makes the Baltic Sea into a NATO lake.”

“So, it’s a self-fulfilling prophecy almost for Putin, and that’s what makes it so difficult for me to see how we end this cycle, how we get on a better track, because the track we’re on now seems to be a really, really bad one,” he added. “The momentum seems to be heading in a really, really bad direction and no one seems able to stop it. So, if anybody has an idea of what that magic lever is that somebody can push or pull, it would be a good time to surface it.”

Link

(10-06-2022 07:46 AM)VA49er Wrote:  So, looks like the Biden admin is now blaming Russia for OPEC giving him the cold shoulder. It's always Russia.

I mean---Im sure Russia did push for the meeting and push for cuts---that said---the US predicament of needing energy help from other nations is entirely and completely due to Biden immediately and inexplicably declaring war on one of (if not the) most important industries in our nation on the very first day of his administration. Cheap energy is this nations life blood and Biden foolishly is attempting to destroy it---and our economy----for little more than PR purposes. Current green technology is nowhere near ready to take over for fossil fuels---and to pretend it is while generating an energy policy that cannot withstand reality----wreaks of a level of disinformation and fraud that is unprecedented in scale. If anything should be remembered as "The Big Lie"----its the Biden Administration energy policy.

Instead of saying how disappointed he is in OPEC we could actually show some level of balls and tell those clowns we are going to stop propping up their militaries and selling them weapons unless they reverse course. Of course though both parties of this country will allow the Saudi's to do whatever they want and just bend over and take it. Biden talked a big game about actually holding them accountable for being some of the worst people on the planet, but just like every other President of my lifetime he's just kissed their asses and gotten nothing out of it but being embarrassed.

(10-07-2022 02:56 PM)b0ndsj0ns Wrote:  Instead of saying how disappointed he is in OPEC we could actually show some level of balls and tell those clowns we are going to stop propping up their militaries and selling them weapons unless they reverse course. Of course though both parties of this country will allow the Saudi's to do whatever they want and just bend over and take it. Biden talked a big game about actually holding them accountable for being some of the worst people on the planet, but just like every other President of my lifetime he's just kissed their asses and gotten nothing out of it but being embarrassed.

(10-07-2022 02:56 PM)b0ndsj0ns Wrote:  Instead of saying how disappointed he is in OPEC we could actually show some level of balls and tell those clowns we are going to stop propping up their militaries and selling them weapons unless they reverse course. Of course though both parties of this country will allow the Saudi's to do whatever they want and just bend over and take it. Biden talked a big game about actually holding them accountable for being some of the worst people on the planet, but just like every other President of my lifetime he's just kissed their asses and gotten nothing out of it but being embarrassed.

We can do that----but it wont matter. There are plenty of people to buy weapons from. Besides, selling them weapons is profitable. We just need to be done with relying on their oil and protecting their nation (and its supply/export routes).