- Sep 30, 2003
Maybe later I'll come back and explain better.Originally posted by: Hayabusa Rider
We completely rework how oil is distributed. As it stands right now, we do not own our own resources. Anything drilled anywhere can be sold anywhere, with no direct benefit to the US.
My proposal is this. The US owns it's own oil. We have oil companies to drill for these resources for a contracted price (actual cost of production plus a locked in mark-up). It's then sold in the US for the US people not at what the futures market and China determine it to be, but based on the real cost of production.
We need control over our own resources.
But your entire is premiss is incorreect because we will still be an exporter.
If we developed excess oil supply and could ensure that it stayed here, there be a big drop in golbal demand.
We would buy less global oil. Our reduction in foriegn oil would cause a drop in global prices.
But we would still need to import a bunch, albeit at a lower price. And our internal/domestic market forces would price our new oil at the price we now buy foreign oil for.
The mathematics indicate no difference between keeping the oil here, or selling normally on the world market.
To get to any difference while we are a net exporters requires all kind of gymnastics such as complicated price controls (calcualtions averaging US domestic production under a price control with free market foreign supplies needed etc) and import/export rules and policing.
This part I think doable - "We have oil companies to drill for these resources for a contracted price (actual cost of production plus a locked in mark-up) - but beyond that are numerous problems.