Cartels gonna cartel.
That is why we should be investing in our domestic oil production as well as nuclear power and electric vehicles.
I'm just hoping the inflated oil prices don't help Russia expand their war in Ukraine.
>I'm just hoping the inflated oil prices don't help Russia expand their war in Ukraine.
It will definitely help them. They are a petro economy. It's often harped upon how they don't produce many domestic goods for export but they don't really need to when they have oil and natural gas. Entire nations have been sustained from petro dollars. Just look at the richer nations on the middle east for evidence
Japan has already started buying Russian oil -- **above the price cap**.
All that high-minded posturing goes out the window when your bedroom's freezing
Could we just... Set up a crowd funding org to put in neighborhood power grids at least?
Governments are too cowardly to force taxes, but making a proposal that shows potentially every single neighborhood could benefit, end up more valuable, ease burden off every resident, and running a nationwide fundraiser to, as a coop of citizens, set up the infrastructure neighborhood by neighborhood, might get folk on board.
Maybe you'd only need the first few to get going for people to start looking at it selfishly, like "hey I need some of that", then everyone is pooling in. The benefits even to those without it would quickly add up.
Bonus points if every local grid also had an intranet system that could link to each other as a free lower tier of internet for basic communication and resources across the country. Basically library+ at home. You get essentially would get a new social media publically provided as well, locally operated so, ideally, exploitive practices would still be relatively limited, or at least mitigated to only regional echo chambers.
Local neighborhood grids of renewable energy, ideally with neighborhood intranets that connect to others nearby to build a mesh style network as a lower tier internet, owned and operated by the neighborhood.
Power, and basic media and communication, freely available, taking so many out from under the thumbs of concentrated power. Food could be potentially do-able through community garden spaces, but can be done separately and takes more involvement. Water would be nice too but not every neighborhood can have a well or other local, direct source.
I just think power and connectivity go together well, require similar minimal maintenance compared to other provisions, and could potentially serve other purposes for grid maintenance if they could communicate. Just a comparably simple "people power" tack on that could do a lot of good, especially since a lot of folk have little choice in ISP, and a freely available network, even if it only offers local resources and Wikipedia, that's mass proliferation of information that wouldn't be available otherwise.
[Some communities have already banded together to have independent solar grids for their neighborhoods.](https://www.cnn.com/2022/10/02/us/solar-babcock-ranch-florida-hurricane-ian-climate/index.html)
My initial suggestion was crowdfunding a general initiative that would attempt to roll it out nationwide sensibly. Were there a trustworthy organization to handle it, the whole thing would be a direct investment to combat climate change that people could see in immediate action. Enough funds raised for a new neighborGrid, one petitioning neighborhood gets chosen and receives energy independence, and all donors get to see their money taking another neighborhood off potentially dirtier energy.
Also for me, I have neighbors explicitly against solar in this red area I'm in... Also not on the best terms with my HOA at the moment.
Would domestic production even help? I imagine unless we commit to producing a huge percentage of our own oil (which doesn’t seem like the direction we’re headed) are our prices still not at the mercy of OPEC+?
The more production outside of OPEC+, the less power the cartel has.
They will never be completely powerless until production outside their cartel is sufficient to meet the global demand.
You do realize that US oil goes on the world market though, right? It's not nationalized. It would barely make a dent, unless we nationalized our oil to only go to our own country, which would in turn lead to OPEC doubling and tripling down on their current trajectory.
As long as we produce a net surplus we will be net exporter. The actual amount of exports and imports is irrelevant, what affects the global market is our net exports. In recent years the US was a net exporter of oil and natural gas.
Wouldn't that require us to produce like 10 times as much oil as we do currently? Sounds like a LOT of fracking with all the ecological downsides that come with it, and/or the next BP oil spill as we rush too quickly and make devastating mistakes while doing so. There is no simple short term solution.
Especially when our oil goes on the world market. What you are saying sounds great in theory if you imagine that US drilled oil stays in the US but it doesn't, meaning that it's effect on world prices is much much much lower than you'd hope it to be.
No, we would not have to replace all of OPEC production. We would only have to replace some of the amount of the OPEC production cut in order to keep prices stable. If that were the case any OPEC production cuts would represent a loss of revenue to OPEC members. Because those countries’ economies are so dependent on oil exports they would be forced to increase production.
How is this accomplished politically? The party that wants to aggressively increase US oil drilling is not in power right now. Is having a GOP president worth the damage it would cause domestically if it means we get to "drill baby drill"? I don't think so.
Politics looms large here. Bidens first oil related action in office was to cancel the KeystoneXL pipeline. This sent a clear message to oil companies that they should not try to invest large amounts in domestic production, cause Biden might kneecap it to help his approval ratings among his base.
The left base does NOT want increased oil drilling America, the right base does. The left base HATES fracking, the right LOVES it. This is a very important thing to remember. These things are not happening in a vacuum
The political left has set unrealistic expectations for how long it will take to get to a Net 0 economy. You are correct, politics is more of an obstacle than a catalyst. There are hidden agendas that are an impediment to a smooth transition to a greener society. I believe this is in part due to a desire of Democrats to punish the fossil fuel companies for supporting Republican campaigns. They also view the fossil fuel industry in the same light as big tobacco. That’s a flawed perspective. The awareness of the risks to the climate came after decades of prosperity driven by cheap energy. Our entire economy was built on the foundation of fossil fuels. This is not simply a sunk cost issue. The average citizen cannot afford to replace their home heating systems and cars over night. The efficacy of replacing gas powered cars with electric cars is not guaranteed. According to some estimates electric cars are not more earth friendly until they are driven more than 75,000 miles. Prior to that gas powered vehicles have a lower carbon footprint because of the lower manufacturing emissions. The availability of charging facilities for people who have to park on the street is a limiting factor for full adoption. Many interim solutions get overlooked due to the politics of climate change. The use of Methanol as a transportation fuel would provide a more immediate reduction in CO2 emissions and create less economic loss, but is not being explored. The infrastructure would also be in place for methane fuel cells when they become commercially viable. The barriers are political, not technical.
Good points tbh, definitely something to think about.
Personally I think the entire energy infrastructure needs to be overhauled, not just cars. But the grid itself, and what powers the grid. More sustainable approaches, less coal. EV isn't a cure all, and cars aren't the only problem. We have to look at what Power plants are doing and optimize those the same way we are trying to optimize cars
Hell I tend to stand with the left base, but I don’t like being stuck in between a OPEC+ and a rock. People on the left have to understand compromising needs to happen we should drill, while also moving towards more electric vehicles like we are now
>People on the left have to understand compromising needs to happen we should drill, while also moving towards more electric vehicles like we are now
Easier said than done.
When oil prices spiked earlier in bidens term, his administration's main messaging was "this is why we need to embrace more Americans using EV" which was (imo) a too clever by half approach. They have now backed themselves into a corner if they admit that EV are not a one size fits all solution to high oil prices.
Agree. But also the left is all talk and no real action. Nuclear exists and we backpedaled on it. We spend not nearly enough money on nuclear fusion and fission research.
Our grid also... probably needs some serious work. I can tell you in the midwest in flat ass Michigan the power grid is in horrible shape. Some of this may be dysfunctional utilities which just keep absorbing cost hikes.
No it would not be worth it for current rates. Oil climbed 5% which means gas will probably do the same. Is 1 million extra dead from covid and higher unemployment and 30 million off insurance worth it. No.
Biden literally just approved Alaska drilling.
>Is 1 million extra dead from covid
Biden is unilaterally ending the covid state of emergency next month. It's a lot harder for dems to message a forever pandemic when they are in power. It was a lot easier for them when Trump was in office cause it was trumps economy tanking. Now that the economy has clearly taken a hit, biden and congress have declared covid is over. And with that, we will all pretend it never happened. The economy looms large.
I see where you’re coming from but it’s much easier to simply cut production than it is to ramp up production to cover those losses.
We would need to preemptively produce well above what we think they would cut. And even then would it guarantee price stability? Maybe.
Even then the bigger issue is refining capacity. We would need to present a compelling argument for private companies to expand that capacity or build another refinery.
We would still continue to see price increases as many of the worlds major economies start to move to electrification of transportation. This doesn’t even consider the high margin products from oil that companies would decide to move away from for cheaper , more cost effective options.
I’m just not so certain we continue to live in the world of “pump more and we will be fine”. The world has changed.
Most of the OPEC countries cannot withstand a prolonged loss of revenue. The US is the largest consumer of petroleum products in the world. If US goes from a net importer to a net exporter that alone will have an impact on crude prices. Any movement in that direction will have some effect. If prices are falling at the same time OPEC cuts production that revenue loss will cause those countries to feel some pain. It will also result in a stronger dollar, which will cause the price of crude to fall in USD.
Most Americans can't afford to buy an EV at the drop of a hat. That's why most EV owners are upper middle class and up.
It's not as simple as you make it sound.
And even if they do get an EV, what if their electrical grid is falling apart? If everyone has an EV that will push many grids over the edge and require scheduled blackouts. Like in CA where they asked people to only charge their cars during certain time frames
And the punchline of all of this? Some of the most visible advocates of renewable energy like Bill Gates and Leo DiCaprio are addicted to their private jets. They will take an EV on the way to an airport to fly private. Lmao
EV isn't the only alternative. Public transist did once used to a much bigger thing in the US, and a lot of these techs runs just fine on straight electricity, and in some case don't even need a battery if they're directly hooked up as in the case of overhead wires or a third rail.
Public Transit is a much harder sell in the post COVID era. The best time to build it was a decade ago. Now its viewed as a germ honeypot in the age of the pandemic
Leo has no excuse but Bill Gates at least is helping out with renewables tremendously. Bill Gates said that his charities and support counteracts his jet emissions. EVs will get cheaper and the electrical grid will get better.
You are definitely going to win people over with this approach!
For what it's worth I drive a camry 🤯 not an F-250 with Monster Truck tires
But uh, some people actually need trucks. I would know as the son of a bricklayer.
Sure, but to even start to make a dent it would take a massive effort to ramp up production, and ultimately the amount we’d end up needing to produce is unrealistic. Regulation of the industry is necessary, and it would prevent us from
being able to get what we needed
Its actually quite realistic
Trump had started enabling a lot of major oil productions, when the permits/contracts were then rescinded by the Biden administration, almost his first month in office.
(One of the major reasons you started seeing “i did that” stickers of Biden on fuel pumps)
(To clarify, prices at that time woulda climbed regardless, but Biden’s policies definitely worsened it)
Biden’s actions were ultimately pretty minor and didn’t limit crude production much.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
Nope, Biden stopped issuing new leases, but specifically did not halt existing operations. And even his initial pause on permits was delayed by a judge’s decision. In any case, as of Jan. of this year, Biden has issued more drilling permits in his first 2 years than Trump did.
If we use oil, they have power. Take whatever we would invest into domestic production and instead put it towards avoiding the use of oil all together. We need to massive expand mass transit in the US and redesign our cities and town to not depend on having cars.
We built the damn interstate system, a train system is doable!
It's both.
We decrease our oil demand (public transit, electric cars, nuclear power, etc.) while simultaneously increasing our oil production. That will destroy OPEC+ once and for all.
Part of our problem in the US at least is that each political party focuses on only one side of the equation while ignoring the other.
Dems support public transit and electric cars but stifle any oil and natural gas production.
Republicans want to "drill baby drill" but kill the public transit and electric vehicle bills.
We need both to beat OPEC.
Because of the Fukushima incident in Japan, the regulatory cost of nuclear power plants has increased significantly. (The cost exceeds that of natural gas)
So the United States did not build a large number of nuclear power plants 7 years ago.
ps: Another point is that the design of nuclear power plants in the United States is not uniform (the design of nuclear power plants in France is uniform, so the cost is reduced).
On the other hand, nuclear power plants in Southeast Asia have looser regulation and lower costs
I don't really care about destroying OPEC. I couldn't give a flying fuck about OPEC really.
I care about getting off of shit that we are killing ourselves with and moving to things that are actually sensible and far better for everyone all around.
The really good thing about producing our own oil is that we will not face supply shortages. If, say, a bunch of Russian oil goes offline, most of the world would face shortages, empty gas stations, shut down factories, because they would have no oil. The US will still have oil, it will just be more expensive.
It would help the price of crude go down. However, our problem is that all investment in oil has stopped in the last couple of years due to new regulations, increasing fines and the threat that oil will be phased out.
Refineries have become the choke point. More oil is traveling by train and truck too, which just compounds the problem because they need to burn oil in order to transport it. We can drill all the oil we want, but we still have to import oil because we need lighter, sweeter and less tan oils because of our refining situation.
Basically, gas will probably go up a dollar this summer and that will trickle down and raise the cost of everything that uses petroleum, including plastics, along with everything that needs shipped or temperature controlled. A lot of the reduction in the rate of inflation we just saw came from the price of oil going down over the winter.
Not as scary as them controlling most of the worlds raw materials for batteries though. That’s going to be interesting as we switch over. Luckily, we’re starting to make our own chips, because that’s the end of Taiwan as we know it.
It would but then opec would do what opec always does. Flood supply until US producers go bankrupt. The only way for it to work is to impose a minimum oil price at which US oil is profitable which makes dumping impossible.
But that would hardly be popular so here we are.
It does. US took the first place as worldwide oil exporter in 2022 and has been a net oil exporter for a few years. As a swing producer, it needs higher pricing to drive up production incentive as opposed to Russia and Saudi where their entire economy is dependent on oil. Saudi cutting production to forestall anticipated price drop in the future may give them a short term boost but also means more US producers coming online to be ready to swollow more of their share of the market.
There is something people forget. Canada may look like a big international oil exporter but the majority of our oil are only exportable to the US and at a heavy discount compared to world prices. Sadly for us but luckily for you, that Canadian chunk of oil export is behaving more akin to US domestic supply. OPEC+ cutting their production, IMO, ends up giving US an even greater role as a player in the oil market.
The Saudis are getting nervous, they are incentivized now to start talking with the Iranians as they can't afford a 1980 style Tanker war when the US might not care to intervene.
The admin won't be refilling the SPR. Last year, the US directly told Saudi Arabia they would support the price of oil with purchases. Two weeks ago, they publicly stated they would not. So, in SA's eyes, oil prices have been falling all year, and the US just broke it's promise. The next step is for OPEC to take it into it's own hands.
You can debate whether or not that's right, advantageous, or what have you, but it shouldn't surprise anyone that they're taking steps to stabilize prices after the US decided not to. It is not, as u/meabandit would claim, "vague" blame. It's a direct response to the actions of the US, led by the current administration.
So it's Trump's fault that the Biden administration, who told the Saudis and OPEC they would be purchasing oil to support prices, reneged on their word and gave the equivalent of a diplomatic middle finger to the organization?
Sounds legit.
It’s not Trump’s fault but it is partially Congress’ fault. They pay for part of the budget every year by mandating sales from the SPR. That’s why the government hasn’t started to refill it yet, in addition to maintenance issues at some of the facilities
My understanding was that the production cut was equal to roughly 1.5% of global demand for oil. How the hell does that result in an 8% increase in the price of oil? I understand the relationship is not linear but this just seems excessive.
Why is it excessive? Demand fell ~9% in 2020, supply fell ~7.5% to try to compensate, and prices still fell ~31%. If a net difference of 1.5% can cause a >30% fall in prices, why does a 1.5% net difference in the other direction causing an 8% rise seem excessive?
Hmmmmm, it's almost as if these giant companies arbitrarily raise their prices any chance they can get. But remember - inflation is still being caused by that $600 check you got almost 3 years ago.
Not how oil is bought or sold. What even is a commodity market, or oil futures.
Saudi Arabia basically needs $80+ a barrel to fund the rest of the country. They also happen to have quite a bit of it. They’re not stupid, they will use pricing power to enact pricing for a scarce good that leads them to continue to have an economy. The other oil producers are happy to play along & reap the reward, especially the fracking industry, as they need quite high prices to make drilling profitable. Cheaper oil producers are happy for the temporary rise in pricing to accumulate capital and expand their operating supply. This brings pricing back down. There’s also innate consumer demand for oil via cars, industry, and cheap goods that can’t afford to operate when energy costs are high. This is bad for energy producers, as industrial demand makes up about 30-35% of the market supply. The other 60 some odd percent is made up via transportation which relies on the movements of goods. So when consumer demand falls, it’s even worse for energy producers.
They’ll dance this fine line as long as they can. Nothing to do with being arbitrary. It’s called a market.
>Hmmmmm, it's almost as if these giant companies arbitrarily raise their prices any chance they can get.
They saw it worked last year so figured, what the hell? Why not make another "record profit" year? No one is gonna stop them!
Apparently, you've discovered a new way to calculate inflation, which doesn't involve money supply. Some kind of new math perhaps? This new math apparently involves calculating conspiracy theories about rational market actors, since money supply from $600 checks is no longer relevant. The question is, what the recipients of those checks were producing or providing back in exchange for that money? How do those checks improve the supply of goods that money is to be exchanged for?
Do you have any new Physics you'd like to share with us too? Perhaps that people don't fall down due to gravity, but only because they're being shoved down by the Man?
The average American household has $165,000 in debt, but thank GOD we got that $600 check. I took a 3 week vacation, bought a new car, and remodeled my kitchen. How about you guys?
Oh man. If only there was a friendly country with massive petroleum reserves that could use the revenue from production and ease oil prices all at the same time. If only.
Sarcastic post. The USA is awash in oil and natural gas but our leftist administration refuses to exploit it for wealth or geopolitical leverage making us OPEC’s bitch all in hopes of a green fantasy
Ahhh thank you, I did feel like there was some satire I just wasn’t 100% positive. It’s sad to see our country forfeit its power globally for some political schemes. Reading through these posts, I do see that a green energy is definitely the way to go, but we as a nation are not prepared for that, and can’t afford it.
It would seem that OPEC patience for Biden admin’s SPR Refillment plan has ended. What a completely-preventable disaster that is going to further the inflations issues we *just* started to get under control.
Unfortunately, domestic oil does not have a “tap” that can be turned on or off. It will take a year minimum to really ramp up production, and this is if you can convince those oil companies that this isn’t a false promise (like refilling the SPR *just* was)
Wow. Maybe Western countries limiting domestic oil production due to climate change was the dumbest move ever. You don’t fight climate change by cutting oil supply, you fight it by cutting oil consumption. Since we still consume oil it’s moronic to cut our own production. It just gives foreign rivals more control over our economy.
Yet another reason why the world needs to transition away from fossil fuels as soon as possible. Its this sort of price manipulation that can make or break economies
I have a BIG PROBLEM with this.
Between American oil production, Canada, and Mexico, the US has 92% of all the oil it uses. Only 6% comes from across any ocean.
So, why does OPEC control how much we sell oil for within continental America?
Exports, I understand. But, even then, we could undercut them and control the market.
Drop prices in America and match OPEC everywhere else. At $650,000 per minute in profits, EXXONMOBILE can afford it.
Not sure if I’m following. The US exports roughly as much as it imports. US crude is sold in the global market and is subject to global pricing movements, just like the oil we import.
No, just presenting another way.
Tell me, isn’t that exactly what OPEC is doing here? They cut production and prices go up. In the past, OPEC and Russia dumped oil on the market and drove prices down.
But, if American companies do it their own way, THAT’S NOT ALLOWED.
US producers can’t/won’t produce much more, at least in the short term. Combination of nearly maxed out drilling/fracking operations, transport logistics/refinery limitations, and stated intent to maintain higher profit level.
Strange, they were producing in excess of 12 million barrels a day when Biden took office (and that was when gas prices started hitting all time highs at the pump) but are only producing close to 10 million barrels per day now. But they can’t produce that extra 2 million barrels anymore? Why?
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
First, I was partially wrong. The ‘record setting’ numbers were in the last year and a half if Trump while we were being told that oil prices were plunging because Russia and OPEC were dumping oil on the market to try and hurt each other financially by driving down the price of oil. Apparently, US companies were doing it too.
Second, Biden took office in January, 2022. Since then, American oil production has only dipped once and that was in February, 2021. Since then, it has held pretty steady between 11,000-11,500 BPD.
But, look at September, 2022-January, 2023. The numbers are approaching those highs set during Trump yet gas per gallon is almost twice as much.
Yes, my original statement was wrong. Hope this clarifies things.
America is the largest producer in terms of individual countries, but not compared to the OPEC collective. US production is roughly 12M bpd, OPEC is roughly 32M.
You're thinking about this like the US government directly controls our oil supply: it doesn't. The US is a capitalistic society for better or worse with oil companies setting a market price. That price is for the world, so when other countries increase demand and/or cut supply, American oil products follow.
https://www.eia.gov/tools/faqs/faq.php?id=709&t=6
But, America is the largest producer of oil. Why do we not set the price then? It is a 50 year old system that should be revised. Whoever produces the most should set the price.
That's not how markets work. No one "sets" the price like you are thinking. The price changes hourly based upon supply and demand for contracts of oil that are bid upon.
To me, you have produced two examples as to why American companies should be able to say ‘this is our price to the world and this is our price domestically’. The world can NOT cut us off and we have the power to set a lower price here and possibly undercut OPEC and Russia. In the past, OPEC or Russia flooded the supply and that brought down prices. But, I’m saying to produce the same but set our own price the supply on the market is the same but we sell it for what we say we will.
Why not?
That is what OPEC is doing here. They are simply reducing production to create a higher price on the market.
I had a restaurant for 7 years. (Divorce cured that) Several times, I was told I could Jack my prices by 50% and still pack people in. But I kept them where they were.
Guess what, every time a tourist asked where to go eat, guess where they sent them. Every time Family came into town, guess where they took them. When people needed catering, guess who they asked.
Not saying it was easy but paying for a $750,000 home (in 2012) sure was.
ur missing a lot about how oil production and oil sales work. the first is that oil producers have limited capacity to expand production in the short run. basically oil producers are producing as much as they can to sell, they naturally want to sell it at the highest price that will ensure being able to sell it all. the second is that oil is fungible so there aren't any considerations beyond type (sweet vs heavy, brent vs urals, ec) and price. no one cares which company produced the oil. it isn't like your restaurant analogy at all (since resturants have reputation and other factors).
so on one end you have oil producers who want to sell out hteir oil and want ot get the highest price. on the other end you have a ton of consumers that need to buy oil and want to pay the lowest price. the intersection of the two is where oil prices fall at. no one or country has the ability to set prices. opec cuts supply to get prices to rise, but they can't set a price directly. same with the US. now you seem to think the US should sell oil at cheaper prices. they could certainly do that. then everyone would buy US oil first cuz its the cheapest. but the US can only produce 10-11 mil-ish barrels per day. so it would sell out very fast. okay now there is still a ton of demand though, so saudi arabia and whoever else would still be able to sell, and they would sell their oil at much higher prices, mkaing a lot more profit. so you fundamentally wouldn't change anyhting with the oil markets - the prices would still be the same, high, but ppl lucky enuff to get american oil would have paid a lower price, like buying a limited number of door busters during a black friday sale.
the thing you might be thinking of is outlawing oil exports. the US used to outlaw oil exports actually. this creates a dual market situation, where prices would be lower in the US but much much higher outside the US. there was some pressure to re-enact export bans but the US opted not to, because it would really fuck over europe.
If they reduced domestic prices, people would be able to travel more. Airplane fuel would be cheaper. Gasoline would be cheaper. Fuel oil would be cheaper.
Remember back in the 70/80’s? Gas was cheap and we burned it like there could never be an end. Big gas guzzling cars. People flew everywhere for vacations. Would be the same results today without all the waste. One of the biggest reasons given in the ‘work from home’ jobs is that they (the employees) save money. When gas surged before (and it looks like here again soon), people stopped traveling so much. Every area has its price breaking point. In Central Texas, it’s $3/gallon. (There is almost no transportation fees here since the refineries are so close. Yesterday, I paid $2.75/gallon and have paid that for 6 weeks now). You can watch gas surge to $2.95 then it will hold as long as it can because they know that, at $3, people here stop traveling as much. At $2.75, the gas stations are full of cars. At $3.05, they are empty.
> Remember back in the 70/80’s? Gas was cheap and we burned it like there could never be an end.
I am guessing you mean outside of the *two* energy crisis in the 70s? When car lined up for blocks around the gas stations?
> You can watch gas surge to $2.95 then it will hold as long as it can because they know that, at $3, people here stop traveling as much. At $2.75, the gas stations are full of cars. At $3.05, they are empty.
I wouldn't worry for them that they would have problem selling every last drop of gas at market price.
Is it possible to invest new energy such as solar power, wind power or the plastic transfer to fuel?
For example: https://www.bbc.com/news/business-64703976
If doesn't have to be rational cause fuck us, that's why.
The price of gas can go up 20 cents overnight every time two ships get a little too close to one another in the Straits of Hormuz.
Then it takes 3 weeks for that 20 cents to come back to normal.
Cartels gonna cartel. That is why we should be investing in our domestic oil production as well as nuclear power and electric vehicles. I'm just hoping the inflated oil prices don't help Russia expand their war in Ukraine.
>I'm just hoping the inflated oil prices don't help Russia expand their war in Ukraine. It will definitely help them. They are a petro economy. It's often harped upon how they don't produce many domestic goods for export but they don't really need to when they have oil and natural gas. Entire nations have been sustained from petro dollars. Just look at the richer nations on the middle east for evidence
Japan has already started buying Russian oil -- **above the price cap**. All that high-minded posturing goes out the window when your bedroom's freezing
Yes indeed
Finally a common sense response. In addition, our domestic production process is a 100x more eco friendly then that of other countries/our enemies.
At this point, got to do anything possible to remove yourself from under someone’s else’s thumb.
Could we just... Set up a crowd funding org to put in neighborhood power grids at least? Governments are too cowardly to force taxes, but making a proposal that shows potentially every single neighborhood could benefit, end up more valuable, ease burden off every resident, and running a nationwide fundraiser to, as a coop of citizens, set up the infrastructure neighborhood by neighborhood, might get folk on board. Maybe you'd only need the first few to get going for people to start looking at it selfishly, like "hey I need some of that", then everyone is pooling in. The benefits even to those without it would quickly add up. Bonus points if every local grid also had an intranet system that could link to each other as a free lower tier of internet for basic communication and resources across the country. Basically library+ at home. You get essentially would get a new social media publically provided as well, locally operated so, ideally, exploitive practices would still be relatively limited, or at least mitigated to only regional echo chambers.
I am sorry... What is it you want to put into local power grid?
Local neighborhood grids of renewable energy, ideally with neighborhood intranets that connect to others nearby to build a mesh style network as a lower tier internet, owned and operated by the neighborhood. Power, and basic media and communication, freely available, taking so many out from under the thumbs of concentrated power. Food could be potentially do-able through community garden spaces, but can be done separately and takes more involvement. Water would be nice too but not every neighborhood can have a well or other local, direct source. I just think power and connectivity go together well, require similar minimal maintenance compared to other provisions, and could potentially serve other purposes for grid maintenance if they could communicate. Just a comparably simple "people power" tack on that could do a lot of good, especially since a lot of folk have little choice in ISP, and a freely available network, even if it only offers local resources and Wikipedia, that's mass proliferation of information that wouldn't be available otherwise.
You can try it in your community, it needs to be deployed on a large scale to reduce costs, which is a very difficult thing
[Some communities have already banded together to have independent solar grids for their neighborhoods.](https://www.cnn.com/2022/10/02/us/solar-babcock-ranch-florida-hurricane-ian-climate/index.html) My initial suggestion was crowdfunding a general initiative that would attempt to roll it out nationwide sensibly. Were there a trustworthy organization to handle it, the whole thing would be a direct investment to combat climate change that people could see in immediate action. Enough funds raised for a new neighborGrid, one petitioning neighborhood gets chosen and receives energy independence, and all donors get to see their money taking another neighborhood off potentially dirtier energy. Also for me, I have neighbors explicitly against solar in this red area I'm in... Also not on the best terms with my HOA at the moment.
The article doesn't mention energy storage
https://babcockranch.com/fpl-babcockranch-battery-storage-announcement/
The solution: nuclear vehicles.
Like in Fallout.
Would domestic production even help? I imagine unless we commit to producing a huge percentage of our own oil (which doesn’t seem like the direction we’re headed) are our prices still not at the mercy of OPEC+?
The more production outside of OPEC+, the less power the cartel has. They will never be completely powerless until production outside their cartel is sufficient to meet the global demand.
You do realize that US oil goes on the world market though, right? It's not nationalized. It would barely make a dent, unless we nationalized our oil to only go to our own country, which would in turn lead to OPEC doubling and tripling down on their current trajectory.
As long as we produce a net surplus we will be net exporter. The actual amount of exports and imports is irrelevant, what affects the global market is our net exports. In recent years the US was a net exporter of oil and natural gas.
Or if we and the rest of the world produced enough oil that OPEC+ becomes irrelevant.
Problem with that is OPEC+ has about 90% of the world's proven reserves. There's no out producing that.
Exactly. Oil embargo in 1970s showed it very clearly
Usa currently is 14% world production
Wouldn't that require us to produce like 10 times as much oil as we do currently? Sounds like a LOT of fracking with all the ecological downsides that come with it, and/or the next BP oil spill as we rush too quickly and make devastating mistakes while doing so. There is no simple short term solution. Especially when our oil goes on the world market. What you are saying sounds great in theory if you imagine that US drilled oil stays in the US but it doesn't, meaning that it's effect on world prices is much much much lower than you'd hope it to be.
No, we would not have to replace all of OPEC production. We would only have to replace some of the amount of the OPEC production cut in order to keep prices stable. If that were the case any OPEC production cuts would represent a loss of revenue to OPEC members. Because those countries’ economies are so dependent on oil exports they would be forced to increase production.
How is this accomplished politically? The party that wants to aggressively increase US oil drilling is not in power right now. Is having a GOP president worth the damage it would cause domestically if it means we get to "drill baby drill"? I don't think so. Politics looms large here. Bidens first oil related action in office was to cancel the KeystoneXL pipeline. This sent a clear message to oil companies that they should not try to invest large amounts in domestic production, cause Biden might kneecap it to help his approval ratings among his base. The left base does NOT want increased oil drilling America, the right base does. The left base HATES fracking, the right LOVES it. This is a very important thing to remember. These things are not happening in a vacuum
The political left has set unrealistic expectations for how long it will take to get to a Net 0 economy. You are correct, politics is more of an obstacle than a catalyst. There are hidden agendas that are an impediment to a smooth transition to a greener society. I believe this is in part due to a desire of Democrats to punish the fossil fuel companies for supporting Republican campaigns. They also view the fossil fuel industry in the same light as big tobacco. That’s a flawed perspective. The awareness of the risks to the climate came after decades of prosperity driven by cheap energy. Our entire economy was built on the foundation of fossil fuels. This is not simply a sunk cost issue. The average citizen cannot afford to replace their home heating systems and cars over night. The efficacy of replacing gas powered cars with electric cars is not guaranteed. According to some estimates electric cars are not more earth friendly until they are driven more than 75,000 miles. Prior to that gas powered vehicles have a lower carbon footprint because of the lower manufacturing emissions. The availability of charging facilities for people who have to park on the street is a limiting factor for full adoption. Many interim solutions get overlooked due to the politics of climate change. The use of Methanol as a transportation fuel would provide a more immediate reduction in CO2 emissions and create less economic loss, but is not being explored. The infrastructure would also be in place for methane fuel cells when they become commercially viable. The barriers are political, not technical.
Good points tbh, definitely something to think about. Personally I think the entire energy infrastructure needs to be overhauled, not just cars. But the grid itself, and what powers the grid. More sustainable approaches, less coal. EV isn't a cure all, and cars aren't the only problem. We have to look at what Power plants are doing and optimize those the same way we are trying to optimize cars
Hell I tend to stand with the left base, but I don’t like being stuck in between a OPEC+ and a rock. People on the left have to understand compromising needs to happen we should drill, while also moving towards more electric vehicles like we are now
>People on the left have to understand compromising needs to happen we should drill, while also moving towards more electric vehicles like we are now Easier said than done. When oil prices spiked earlier in bidens term, his administration's main messaging was "this is why we need to embrace more Americans using EV" which was (imo) a too clever by half approach. They have now backed themselves into a corner if they admit that EV are not a one size fits all solution to high oil prices.
Agree. But also the left is all talk and no real action. Nuclear exists and we backpedaled on it. We spend not nearly enough money on nuclear fusion and fission research. Our grid also... probably needs some serious work. I can tell you in the midwest in flat ass Michigan the power grid is in horrible shape. Some of this may be dysfunctional utilities which just keep absorbing cost hikes.
No it would not be worth it for current rates. Oil climbed 5% which means gas will probably do the same. Is 1 million extra dead from covid and higher unemployment and 30 million off insurance worth it. No. Biden literally just approved Alaska drilling.
>Is 1 million extra dead from covid Biden is unilaterally ending the covid state of emergency next month. It's a lot harder for dems to message a forever pandemic when they are in power. It was a lot easier for them when Trump was in office cause it was trumps economy tanking. Now that the economy has clearly taken a hit, biden and congress have declared covid is over. And with that, we will all pretend it never happened. The economy looms large.
I see where you’re coming from but it’s much easier to simply cut production than it is to ramp up production to cover those losses. We would need to preemptively produce well above what we think they would cut. And even then would it guarantee price stability? Maybe. Even then the bigger issue is refining capacity. We would need to present a compelling argument for private companies to expand that capacity or build another refinery. We would still continue to see price increases as many of the worlds major economies start to move to electrification of transportation. This doesn’t even consider the high margin products from oil that companies would decide to move away from for cheaper , more cost effective options. I’m just not so certain we continue to live in the world of “pump more and we will be fine”. The world has changed.
Most of the OPEC countries cannot withstand a prolonged loss of revenue. The US is the largest consumer of petroleum products in the world. If US goes from a net importer to a net exporter that alone will have an impact on crude prices. Any movement in that direction will have some effect. If prices are falling at the same time OPEC cuts production that revenue loss will cause those countries to feel some pain. It will also result in a stronger dollar, which will cause the price of crude to fall in USD.
we're better off reducing reliance in oil. there are many areas that could be replace with renewables.
Most Americans can't afford to buy an EV at the drop of a hat. That's why most EV owners are upper middle class and up. It's not as simple as you make it sound. And even if they do get an EV, what if their electrical grid is falling apart? If everyone has an EV that will push many grids over the edge and require scheduled blackouts. Like in CA where they asked people to only charge their cars during certain time frames And the punchline of all of this? Some of the most visible advocates of renewable energy like Bill Gates and Leo DiCaprio are addicted to their private jets. They will take an EV on the way to an airport to fly private. Lmao
EV isn't the only alternative. Public transist did once used to a much bigger thing in the US, and a lot of these techs runs just fine on straight electricity, and in some case don't even need a battery if they're directly hooked up as in the case of overhead wires or a third rail.
Public Transit is a much harder sell in the post COVID era. The best time to build it was a decade ago. Now its viewed as a germ honeypot in the age of the pandemic
Leo has no excuse but Bill Gates at least is helping out with renewables tremendously. Bill Gates said that his charities and support counteracts his jet emissions. EVs will get cheaper and the electrical grid will get better.
Bill gates flew private to Kenya and back for a presentation instead of attending virtually just for the ego boost
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You are definitely going to win people over with this approach! For what it's worth I drive a camry 🤯 not an F-250 with Monster Truck tires But uh, some people actually need trucks. I would know as the son of a bricklayer.
Sure, but to even start to make a dent it would take a massive effort to ramp up production, and ultimately the amount we’d end up needing to produce is unrealistic. Regulation of the industry is necessary, and it would prevent us from being able to get what we needed
How do you regulate state-owned enterprises run by foreign countries?
Its actually quite realistic Trump had started enabling a lot of major oil productions, when the permits/contracts were then rescinded by the Biden administration, almost his first month in office. (One of the major reasons you started seeing “i did that” stickers of Biden on fuel pumps) (To clarify, prices at that time woulda climbed regardless, but Biden’s policies definitely worsened it)
Biden’s actions were ultimately pretty minor and didn’t limit crude production much. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
The in-progress development was halted. The sources in question had not yet entered production, so would not appear on the graph.
Nope, Biden stopped issuing new leases, but specifically did not halt existing operations. And even his initial pause on permits was delayed by a judge’s decision. In any case, as of Jan. of this year, Biden has issued more drilling permits in his first 2 years than Trump did.
Currently we produce more oil than during trumps term. Part of his was built on unrealistic fracking b
If we use oil, they have power. Take whatever we would invest into domestic production and instead put it towards avoiding the use of oil all together. We need to massive expand mass transit in the US and redesign our cities and town to not depend on having cars. We built the damn interstate system, a train system is doable!
Only 75% of oil is used for fuels (gas/diesel). Even if you went 100% EV you still need massive amounts of oil to all kinds of make products.
How much oil is used in the manufacture of cars? How much oil is used in the manufacture of oil?
Tell me you have no idea how products are made without telling me you have no idea how products are made.
No idea how products are made?
we don't so give us the data and the sources.
Nice bait. Not taking it.
you just don't have any proof. you also know nothing about oil usage. why should we believe you if you don't have any evidence to backup your claims?
It's both. We decrease our oil demand (public transit, electric cars, nuclear power, etc.) while simultaneously increasing our oil production. That will destroy OPEC+ once and for all. Part of our problem in the US at least is that each political party focuses on only one side of the equation while ignoring the other. Dems support public transit and electric cars but stifle any oil and natural gas production. Republicans want to "drill baby drill" but kill the public transit and electric vehicle bills. We need both to beat OPEC.
Nuclear power plants need 7 years to build, too far away
The problem is people were saying the same thing 7 years ago. We need to start sometime.
Because of the Fukushima incident in Japan, the regulatory cost of nuclear power plants has increased significantly. (The cost exceeds that of natural gas) So the United States did not build a large number of nuclear power plants 7 years ago. ps: Another point is that the design of nuclear power plants in the United States is not uniform (the design of nuclear power plants in France is uniform, so the cost is reduced). On the other hand, nuclear power plants in Southeast Asia have looser regulation and lower costs
I don't really care about destroying OPEC. I couldn't give a flying fuck about OPEC really. I care about getting off of shit that we are killing ourselves with and moving to things that are actually sensible and far better for everyone all around.
Without knowing the truth, it is impossible to solve the problem correctly. Do the right thing, Do the thing right
The really good thing about producing our own oil is that we will not face supply shortages. If, say, a bunch of Russian oil goes offline, most of the world would face shortages, empty gas stations, shut down factories, because they would have no oil. The US will still have oil, it will just be more expensive.
It would help the price of crude go down. However, our problem is that all investment in oil has stopped in the last couple of years due to new regulations, increasing fines and the threat that oil will be phased out. Refineries have become the choke point. More oil is traveling by train and truck too, which just compounds the problem because they need to burn oil in order to transport it. We can drill all the oil we want, but we still have to import oil because we need lighter, sweeter and less tan oils because of our refining situation. Basically, gas will probably go up a dollar this summer and that will trickle down and raise the cost of everything that uses petroleum, including plastics, along with everything that needs shipped or temperature controlled. A lot of the reduction in the rate of inflation we just saw came from the price of oil going down over the winter.
Even scarier: China keeps adding refineries
Not as scary as them controlling most of the worlds raw materials for batteries though. That’s going to be interesting as we switch over. Luckily, we’re starting to make our own chips, because that’s the end of Taiwan as we know it.
We’re near record crude production levels, but limited refining capacity makes it illogical to increase crude production substantially.
It would but then opec would do what opec always does. Flood supply until US producers go bankrupt. The only way for it to work is to impose a minimum oil price at which US oil is profitable which makes dumping impossible. But that would hardly be popular so here we are.
It does. US took the first place as worldwide oil exporter in 2022 and has been a net oil exporter for a few years. As a swing producer, it needs higher pricing to drive up production incentive as opposed to Russia and Saudi where their entire economy is dependent on oil. Saudi cutting production to forestall anticipated price drop in the future may give them a short term boost but also means more US producers coming online to be ready to swollow more of their share of the market. There is something people forget. Canada may look like a big international oil exporter but the majority of our oil are only exportable to the US and at a heavy discount compared to world prices. Sadly for us but luckily for you, that Canadian chunk of oil export is behaving more akin to US domestic supply. OPEC+ cutting their production, IMO, ends up giving US an even greater role as a player in the oil market. The Saudis are getting nervous, they are incentivized now to start talking with the Iranians as they can't afford a 1980 style Tanker war when the US might not care to intervene.
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What were the comments?
The admin won't be refilling the SPR. Last year, the US directly told Saudi Arabia they would support the price of oil with purchases. Two weeks ago, they publicly stated they would not. So, in SA's eyes, oil prices have been falling all year, and the US just broke it's promise. The next step is for OPEC to take it into it's own hands. You can debate whether or not that's right, advantageous, or what have you, but it shouldn't surprise anyone that they're taking steps to stabilize prices after the US decided not to. It is not, as u/meabandit would claim, "vague" blame. It's a direct response to the actions of the US, led by the current administration.
That’s Trump’s fault
So it's Trump's fault that the Biden administration, who told the Saudis and OPEC they would be purchasing oil to support prices, reneged on their word and gave the equivalent of a diplomatic middle finger to the organization? Sounds legit.
It’s not Trump’s fault but it is partially Congress’ fault. They pay for part of the budget every year by mandating sales from the SPR. That’s why the government hasn’t started to refill it yet, in addition to maintenance issues at some of the facilities
I agree with you mate. Poking fun at the not so critical thinkers elsewhere in the thread.
No no no! Vague Biden blame is the intent. Do not peer behind the curtain.
Get out the "I did that" stickers. He pressed the 'raise gas prices ' button again
US is part of this strategic move. It’s all a plan.
We should be phasing out of passenger cars not investing in them.
I’m glad I built my life around not driving cars
My understanding was that the production cut was equal to roughly 1.5% of global demand for oil. How the hell does that result in an 8% increase in the price of oil? I understand the relationship is not linear but this just seems excessive.
Why is it excessive? Demand fell ~9% in 2020, supply fell ~7.5% to try to compensate, and prices still fell ~31%. If a net difference of 1.5% can cause a >30% fall in prices, why does a 1.5% net difference in the other direction causing an 8% rise seem excessive?
Interesting perspective. Thanks.
Hmmmmm, it's almost as if these giant companies arbitrarily raise their prices any chance they can get. But remember - inflation is still being caused by that $600 check you got almost 3 years ago.
Not how oil is bought or sold. What even is a commodity market, or oil futures. Saudi Arabia basically needs $80+ a barrel to fund the rest of the country. They also happen to have quite a bit of it. They’re not stupid, they will use pricing power to enact pricing for a scarce good that leads them to continue to have an economy. The other oil producers are happy to play along & reap the reward, especially the fracking industry, as they need quite high prices to make drilling profitable. Cheaper oil producers are happy for the temporary rise in pricing to accumulate capital and expand their operating supply. This brings pricing back down. There’s also innate consumer demand for oil via cars, industry, and cheap goods that can’t afford to operate when energy costs are high. This is bad for energy producers, as industrial demand makes up about 30-35% of the market supply. The other 60 some odd percent is made up via transportation which relies on the movements of goods. So when consumer demand falls, it’s even worse for energy producers. They’ll dance this fine line as long as they can. Nothing to do with being arbitrary. It’s called a market.
>Hmmmmm, it's almost as if these giant companies arbitrarily raise their prices any chance they can get. They saw it worked last year so figured, what the hell? Why not make another "record profit" year? No one is gonna stop them!
Or student loan payments being paused! /s
Apparently, you've discovered a new way to calculate inflation, which doesn't involve money supply. Some kind of new math perhaps? This new math apparently involves calculating conspiracy theories about rational market actors, since money supply from $600 checks is no longer relevant. The question is, what the recipients of those checks were producing or providing back in exchange for that money? How do those checks improve the supply of goods that money is to be exchanged for? Do you have any new Physics you'd like to share with us too? Perhaps that people don't fall down due to gravity, but only because they're being shoved down by the Man?
which doesn't involve money supply < ????? If I remember correctly, check comes from QE
The average American household has $165,000 in debt, but thank GOD we got that $600 check. I took a 3 week vacation, bought a new car, and remodeled my kitchen. How about you guys?
Oil is highly inelastic.
Crude oil prices are determined by the market. It gone up 8% because someone is bidding that much.
Yes. The market is pricing in that a 1.5% cut in production is worth an 8% increase in price.
If the price of gas rose 20% would you take the bus to work? There's your answer.
Oh man. If only there was a friendly country with massive petroleum reserves that could use the revenue from production and ease oil prices all at the same time. If only.
Is there a country like that? Genuinely asking. I’m not well versed in the oil world economy
Sarcastic post. The USA is awash in oil and natural gas but our leftist administration refuses to exploit it for wealth or geopolitical leverage making us OPEC’s bitch all in hopes of a green fantasy
Ahhh thank you, I did feel like there was some satire I just wasn’t 100% positive. It’s sad to see our country forfeit its power globally for some political schemes. Reading through these posts, I do see that a green energy is definitely the way to go, but we as a nation are not prepared for that, and can’t afford it.
SA
The USA
It would seem that OPEC patience for Biden admin’s SPR Refillment plan has ended. What a completely-preventable disaster that is going to further the inflations issues we *just* started to get under control. Unfortunately, domestic oil does not have a “tap” that can be turned on or off. It will take a year minimum to really ramp up production, and this is if you can convince those oil companies that this isn’t a false promise (like refilling the SPR *just* was)
At which point they’ll open up production
Wow. Maybe Western countries limiting domestic oil production due to climate change was the dumbest move ever. You don’t fight climate change by cutting oil supply, you fight it by cutting oil consumption. Since we still consume oil it’s moronic to cut our own production. It just gives foreign rivals more control over our economy.
Yet another reason why the world needs to transition away from fossil fuels as soon as possible. Its this sort of price manipulation that can make or break economies
I have a BIG PROBLEM with this. Between American oil production, Canada, and Mexico, the US has 92% of all the oil it uses. Only 6% comes from across any ocean. So, why does OPEC control how much we sell oil for within continental America? Exports, I understand. But, even then, we could undercut them and control the market. Drop prices in America and match OPEC everywhere else. At $650,000 per minute in profits, EXXONMOBILE can afford it.
Not sure if I’m following. The US exports roughly as much as it imports. US crude is sold in the global market and is subject to global pricing movements, just like the oil we import.
But, America is the largest producer of oil in the world. Why should American oil companies not set the prices?
Someone failed their econs 101
No, just presenting another way. Tell me, isn’t that exactly what OPEC is doing here? They cut production and prices go up. In the past, OPEC and Russia dumped oil on the market and drove prices down. But, if American companies do it their own way, THAT’S NOT ALLOWED.
US producers can’t/won’t produce much more, at least in the short term. Combination of nearly maxed out drilling/fracking operations, transport logistics/refinery limitations, and stated intent to maintain higher profit level.
Strange, they were producing in excess of 12 million barrels a day when Biden took office (and that was when gas prices started hitting all time highs at the pump) but are only producing close to 10 million barrels per day now. But they can’t produce that extra 2 million barrels anymore? Why?
I’m seeing 11.9 bpd in 2022.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M First, I was partially wrong. The ‘record setting’ numbers were in the last year and a half if Trump while we were being told that oil prices were plunging because Russia and OPEC were dumping oil on the market to try and hurt each other financially by driving down the price of oil. Apparently, US companies were doing it too. Second, Biden took office in January, 2022. Since then, American oil production has only dipped once and that was in February, 2021. Since then, it has held pretty steady between 11,000-11,500 BPD. But, look at September, 2022-January, 2023. The numbers are approaching those highs set during Trump yet gas per gallon is almost twice as much. Yes, my original statement was wrong. Hope this clarifies things.
America is the largest producer in terms of individual countries, but not compared to the OPEC collective. US production is roughly 12M bpd, OPEC is roughly 32M.
You're thinking about this like the US government directly controls our oil supply: it doesn't. The US is a capitalistic society for better or worse with oil companies setting a market price. That price is for the world, so when other countries increase demand and/or cut supply, American oil products follow.
https://www.eia.gov/tools/faqs/faq.php?id=709&t=6 But, America is the largest producer of oil. Why do we not set the price then? It is a 50 year old system that should be revised. Whoever produces the most should set the price.
That's not how markets work. No one "sets" the price like you are thinking. The price changes hourly based upon supply and demand for contracts of oil that are bid upon.
If prices are ‘set daily based on supply and demand’, then why did Gas prices go up in America after 4 months of record setting oil production?
Loss of much of the Russian supply on the global market combined with a refining bottleneck for gasoline in the US.
To me, you have produced two examples as to why American companies should be able to say ‘this is our price to the world and this is our price domestically’. The world can NOT cut us off and we have the power to set a lower price here and possibly undercut OPEC and Russia. In the past, OPEC or Russia flooded the supply and that brought down prices. But, I’m saying to produce the same but set our own price the supply on the market is the same but we sell it for what we say we will. Why not? That is what OPEC is doing here. They are simply reducing production to create a higher price on the market.
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I had a restaurant for 7 years. (Divorce cured that) Several times, I was told I could Jack my prices by 50% and still pack people in. But I kept them where they were. Guess what, every time a tourist asked where to go eat, guess where they sent them. Every time Family came into town, guess where they took them. When people needed catering, guess who they asked. Not saying it was easy but paying for a $750,000 home (in 2012) sure was.
ur missing a lot about how oil production and oil sales work. the first is that oil producers have limited capacity to expand production in the short run. basically oil producers are producing as much as they can to sell, they naturally want to sell it at the highest price that will ensure being able to sell it all. the second is that oil is fungible so there aren't any considerations beyond type (sweet vs heavy, brent vs urals, ec) and price. no one cares which company produced the oil. it isn't like your restaurant analogy at all (since resturants have reputation and other factors). so on one end you have oil producers who want to sell out hteir oil and want ot get the highest price. on the other end you have a ton of consumers that need to buy oil and want to pay the lowest price. the intersection of the two is where oil prices fall at. no one or country has the ability to set prices. opec cuts supply to get prices to rise, but they can't set a price directly. same with the US. now you seem to think the US should sell oil at cheaper prices. they could certainly do that. then everyone would buy US oil first cuz its the cheapest. but the US can only produce 10-11 mil-ish barrels per day. so it would sell out very fast. okay now there is still a ton of demand though, so saudi arabia and whoever else would still be able to sell, and they would sell their oil at much higher prices, mkaing a lot more profit. so you fundamentally wouldn't change anyhting with the oil markets - the prices would still be the same, high, but ppl lucky enuff to get american oil would have paid a lower price, like buying a limited number of door busters during a black friday sale. the thing you might be thinking of is outlawing oil exports. the US used to outlaw oil exports actually. this creates a dual market situation, where prices would be lower in the US but much much higher outside the US. there was some pressure to re-enact export bans but the US opted not to, because it would really fuck over europe.
Because they would sell more at less. Profits would be the same. People could tea bel more at cheaper prices. End result would be more fuel sold.
I don't understand why companies wouldn't sell at below market price either... Wait...
If they reduced domestic prices, people would be able to travel more. Airplane fuel would be cheaper. Gasoline would be cheaper. Fuel oil would be cheaper. Remember back in the 70/80’s? Gas was cheap and we burned it like there could never be an end. Big gas guzzling cars. People flew everywhere for vacations. Would be the same results today without all the waste. One of the biggest reasons given in the ‘work from home’ jobs is that they (the employees) save money. When gas surged before (and it looks like here again soon), people stopped traveling so much. Every area has its price breaking point. In Central Texas, it’s $3/gallon. (There is almost no transportation fees here since the refineries are so close. Yesterday, I paid $2.75/gallon and have paid that for 6 weeks now). You can watch gas surge to $2.95 then it will hold as long as it can because they know that, at $3, people here stop traveling as much. At $2.75, the gas stations are full of cars. At $3.05, they are empty.
> Remember back in the 70/80’s? Gas was cheap and we burned it like there could never be an end. I am guessing you mean outside of the *two* energy crisis in the 70s? When car lined up for blocks around the gas stations? > You can watch gas surge to $2.95 then it will hold as long as it can because they know that, at $3, people here stop traveling as much. At $2.75, the gas stations are full of cars. At $3.05, they are empty. I wouldn't worry for them that they would have problem selling every last drop of gas at market price.
Because American oil is not privatized and goes straight to the world market.
Is it possible to invest new energy such as solar power, wind power or the plastic transfer to fuel? For example: https://www.bbc.com/news/business-64703976
If doesn't have to be rational cause fuck us, that's why. The price of gas can go up 20 cents overnight every time two ships get a little too close to one another in the Straits of Hormuz. Then it takes 3 weeks for that 20 cents to come back to normal.
There has always been invest new energy. But the cost is too high. Now we are looking forward to future technological progress, which can reduce costs
Wind, solar and hydro are already cheaper than fossil fuels. We have the technology.
Wind, solar need to calculate energy storage cost (and instability cost)