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Republicans say new study belies Obama claim US has 2 percent of world oil

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GarfieldtheCat

Diamond Member
Jan 7, 2005
3,708
1
0
Oh look, the troll that complains about other people's thread titles being incorrect (whne they weren't) had his second thread locked for a misleading title....shocking, just shocking!

Double standard FTW!
 

Smoblikat

Diamond Member
Nov 19, 2011
5,185
107
106
Remember, Obama said this:

"Even if we drilled every square inch of this country right now, we'd still have to rely disproportionately on other countries for their oil," Obama said

That is obviously not true. We have 6% more oil in our nation than we use. So he is not even close to being correct. We do not have to know where it is when Obama makes such statements...
Further disprooving his claim is somthing i found. I believe in his most recent state of the union adress he said that America used 20% of the worlds oil, and had only 1% of the total supply. By that locid (liberal logic) we would last 1/20 of a year............right? WRONG, its not a 1:1 ratio of use vs reserve. If that logic stood true then we would run out of oil in one year because of 100% use. Liberals have NO idea what theyre talking about, we need to drill in canada so were not funding terrorists and paying their jacked up prices.
 

Axon

Platinum Member
Sep 25, 2003
2,541
1
76
Hasn't anyone ever wondered why no president ever uses the US' oil resources? It seems quite obvious to me.
 

Rainsford

Lifer
Apr 25, 2001
17,520
0
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Yep, unfortunately for Obamites, Obama said "drilled every square inch". That is very specific and says he is ignoring things such as price and damages caused by drilling.

I find the Obamite mindset fascinating in that they can completely ignore what he actually says and pretend it never happened...even while it is repeatedly shown to them.
I guess I don't see why Obama's statement is ignoring price. If we could recover enough oil to satisfy domestic consumption, but the price of doing so was greater than the world oil price, we would still rely on foreign oil. Oil that's recoverable at a higher price than the market supports is basically the same as not having the oil at all...at least until the market price for oil goes up. Nobody would buy oil that's more expensive than the market price, and oil companies won't sell oil at a loss.
 

shira

Diamond Member
Jan 12, 2005
9,574
5
81
So then the USGS is lying, according to you. Do you have anything to back up this powerful claim?

Remember they said we have 26% of the world's oil in the US, and the US only needs 20%, meaning we have 6% MORE than we need...which shows Obama to be completely and utterly wrong.

So please show this information you have which says the USGS is lying.

You're completely, utterly wrong:

"This study does not take into account any other factors such as whether or not a company might find it financially prudent to explore or develop," he [Interior Deputy Secretary David Hayes] said of the USGS analysis.
Yet you claim that the existence of oil somewhere - anywhere - in the U.S., regardless of the price of extraction and regardless of how long it might take to find it and extract if from wherever it it, is the same as "having" it. That's complete BS. And you pretend that when Obama explicitly says "proven reserves" that's the same thing as "undiscovered oil."

Your thread title is a lie. Your posts are all lies. Your words twist and turn reality into troll feces.
 

CallMeJoe

Diamond Member
Jul 30, 2004
6,936
1
0
Fine, if I am wrong than all we did wa drill more oil, but if I am right then I can stop shelling out nearly 20% of my check in gas a week.
I must assume you are either hideously underemployed or appallingly wasteful of fuel.
 

Rainsford

Lifer
Apr 25, 2001
17,520
0
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Try here.

http://foxnewsinsider.com/2012/03/22/graphic-of-the-day-drilling-permits-down-36-under-obama-administration/

(BTW: Yes, it was the old Forbes article. First that popped up the other day when I checked. :$ )

Fern
Those numbers don't seem to be presented with enough detail to demonstrate that the Obama administration is being particularly unreasonable when it comes to approving permits. The Fox News article demonstrates that there are fewer permits being approved, but does not support the (implied) argument that there should be more approvals.

The biggest question that the article fails to answer is whether the Obama administration is denying permits that would have been approved under Bush (or Clinton). Saying there are fewer permits being doesn't really address that question. Maybe there are fewer permit requests overall, or maybe the details about them mean they would have been denied under Bush or Clinton as well.

In other words, new drilling permits are down, but that doesn't mean it's a result of the Obama administration's policies.
 

Rainsford

Lifer
Apr 25, 2001
17,520
0
0
Originally Posted by Matt1970
Fine, if I am wrong than all we did wa drill more oil, but if I am right then I can stop shelling out nearly 20% of my check in gas a week.
I must assume you are either hideously underemployed or appallingly wasteful of fuel. .
I was curious, so I did the math on my own situation, and it turns out I spend about 3% of my (after tax) paycheck on gas. Now obviously other people might make less, or drive more, or drive a less fuel efficient car, but that's a pretty big difference.

The average amount of yearly driving a person does is about 15,000 miles per year, or ~288 miles per week. The average vehicle gets 17 MPG and gas costs about $4 per gallon. That means the average American spends about $68 dollars per week on gas. Not exactly peanuts, but not exactly a crippling cost either.
 

Jhhnn

No Lifer
Nov 11, 1999
61,675
13,754
136
I was curious, so I did the math on my own situation, and it turns out I spend about 3% of my (after tax) paycheck on gas. Now obviously other people might make less, or drive more, or drive a less fuel efficient car, but that's a pretty big difference.

The average amount of yearly driving a person does is about 15,000 miles per year, or ~288 miles per week. The average vehicle gets 17 MPG and gas costs about $4 per gallon. That means the average American spends about $68 dollars per week on gas. Not exactly peanuts, but not exactly a crippling cost either.
Yet every attempt to raise CAFE standards is met with howls and gnashing of teeth, rants about Freedumb! & Big Brother infringing on the "right" to drive giant gas guzzlers willy-nilly across the landscape.

When the price of gas is down, they're eager to buy the biggest truck they can get on a 7 year note, as if the price won't go back up, then whine piteously about the price of driving to work everyday from their ex urban casa out on the fringe of civilization.

And those same voices are the first & loudest to rave on about personal responsibility, Free Markets & so forth, when they made the choice of vehicle and place to live. They create the enormous demand that holds prices up, and they can't figure it out because what they believe in is faulty.
 

JTsyo

Lifer
Nov 18, 2007
10,894
204
106
So does the US have 26% of the oil supply compared to proven supplies of other nations or also including undiscovered supplies of others?
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
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You keep making that false attribution wrt Bush announcing more permits & the crash of oil prices in 2008. Obama announced more permits, too, but the price went up. Correlation is not causation, no matter how badly you want it to be.

I already linked the pertinent graph & analysis, but you just go back to what you want to believe, because it's what you want to believe, because it helps maintain your belief system.

http://economicpopulist.org/content/why-are-gas-prices-skyrocketing

And this, as well-

http://www.declineoftheempire.com/2012/02/understanding-the-current-oil-market.html

Oil futures aren't about what might be happening years from today, but about what might be happening much more short term, and the time from permit to drilling to actual production is a matter of years.
The point about Bush's announcement and the economy's prospects back serve as a vivid example of oil's price sensitivity to actual and/or expected changes in supply/demand, even rather small ones.

The two articles you link above support my point, one particularly so as it cites the Iranian concerns as reason for oil price increases. This is clearly an expectation of reduced (future) supply resulting in a price increase.

Oil speculators cause some increase. I think it difficult to determine exactly how much. In fact, I'm not persuaded yet that they know how much is pure speculation and how much a proper and necessary hedging tool used by various business, like retail gas distributors, airlines and trucking/shipping for example, to protect themselves from price swings.

In any case, I believe the speculators see increased demand/reduced supply too and thus enter the market. If thye thought we would see reduced demand/increased supply they should be selling short. I.e., their activity is nothing but demand/supply driven, particularly expected demand/supply.

If you think the price increase from speculators is attributable to something other than supply/demand, please explain. If you're claiming something else I can only guess it may be price fixing or price manipulation, both of which are difficult to imagine.

Fern
 

woolfe9999

Diamond Member
Mar 28, 2005
7,164
0
0
The point about Bush's announcement and the economy's prospects back serve as a vivid example of oil's price sensitivity to actual and/or expected changes in supply/demand, even rather small ones.

The two articles you link above support my point, one particularly so as it cites the Iranian concerns as reason for oil price increases. This is clearly an expectation of reduced (future) supply resulting in a price increase.

Oil speculators cause some increase. I think it difficult to determine exactly how much. In fact, I'm not persuaded yet that they know how much is pure speculation and how much a proper and necessary hedging tool used by various business, like retail gas distributors, airlines and trucking/shipping for example, to protect themselves from price swings.

In any case, I believe the speculators see increased demand/reduced supply too and thus enter the market. If thye thought we would see reduced demand/increased supply they should be selling short. I.e., their activity is nothing but demand/supply driven, particularly expected demand/supply.

If you think the price increase from speculators is attributable to something other than supply/demand, please explain. If you're claiming something else I can only guess it may be price fixing or price manipulation, both of which are difficult to imagine.

Fern
An expectation of a possible major shortage caused by war with Iran, closing the Strait of Hormuz, etc. causing speculators to buy up oil futures. Not the sample thing as relatively small fluctuations in actual domestic oil production. The trouble with speculators is that they manipulate the market based on perception and fear and it is out of proportion to real supply and demand. It distorts conventional market mechanisms.

- wolf
 
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Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
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An expectation of a possible major shortage caused by war with Iran, closing the Strait of Hormuz, etc. causing speculators to buy up oil futures. Not the sample thing as relatively small fluctuations in actual domestic oil production. The trouble with speculators is that they manipulate the market based on perception and fear and it is out of proportion to real supply and demand. It distorts conventional market mechanisms.

- wolf
You aren't disputing anything I've said: Th oil market is highly sensitive to demand/supply and expected demand/supply. That is all.

To believe that those who speculate, not for valid business reasons (such as domestic gas distributors or air lines etc), are doing so based on anything other than projected demand/supply requires an explanation. I have not seen a single one yet.

Stocks, gold, all types of commodities are subject to the exact same type of speculation. You go long or sell short. That oil speculators are going long is indicative of their forecasts - supply shortage, otherwise they would be shorting their position.

If one wants to argue that the speculators aren't basing their positions (plays in the market) on simple supply/demand please do so.

For those like yourself and Jhhnn I see that you have only two alternatives to demand/supply: (1) Collusion and price fixing. Demand & supply is irrelevant according to your argument because we effectively have a monopoly. Not that's it's so in the classic sense, but rather collusion between the various entities in the industry is setting the (high) price independent of of the demand/supply function. Or, (2) the speculators have so much capital and therefore that they can corner the market - meaning buy it up all , or so much of the supply, and artificially create demand that they can control the price, much like the Hunt bros tried with silver back in the 70's.

I see no evidence for either of the above two scenarios, and, moreover, there are (financially) powerful players who would be allied against such an effort and could surely prevent were it so.

If you have a different scenario, one that I have overlooked, please identify it.

Fern
 

fskimospy

Elite Member
Mar 10, 2006
71,172
20,884
136
Actually we have a third alternative, which is what has already been implemented and will go into effect in the next few years. Speculation in markets is really important as it provides liquidity, but in the past the amount of the market that was open to speculation (as opposed to open to the people who... you know... actually used the commodity) was much lower. As it exists now, most commodity market activity is speculation, not consumption, and that can create some pretty serious price instability that has no relationship with actual supply and demand.

The US has recently imposed some new rules and the EU is looking to similarly limit commodities speculation. If the market returns to being dominated by people who actually want a product as opposed to those who are gambling with it, I believe we will see a much better return to price stability and a massive deflation in commodities prices.
 

Ketchup

Elite Member
Sep 1, 2002
14,495
219
106
Here is an idea I had as well (although I will admit, I don't like it very much.)

The oil market (read: Price of Gas) had artificially low gas prices for a fair amount of time. Compared to what gas prices were in the early 90's, wouldn't gas prices now be about the same, adjusted for inflation?

Just throwing it out there.
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
106
Actually we have a third alternative, which is what has already been implemented and will go into effect in the next few years. Speculation in markets is really important as it provides liquidity, but in the past the amount of the market that was open to speculation (as opposed to open to the people who... you know... actually used the commodity) was much lower. As it exists now, most commodity market activity is speculation, not consumption, and that can create some pretty serious price instability that has no relationship with actual supply and demand.

The US has recently imposed some new rules and the EU is looking to similarly limit commodities speculation. If the market returns to being dominated by people who actually want a product as opposed to those who are gambling with it, I believe we will see a much better return to price stability and a massive deflation in commodities prices.
And for all those words you haven't described how speculation can drive up prices. You offer an explanation without an explanation.

We've seen speculation homes etc, the demand it created drove up home prices. But what happens when the expected (increased) demand doesn't appear? The bubble bursts.

Simple fact is that speculators are bullish on oil, why? They believe demand exceeds supply, or will. What if it doesn't? They'll lose their azzes. All you're suggesting is an artificial bubble due to expected demand/supply factors. Those are unsustainable, even in the short term, if they are not well founded.

Fern
 

fskimospy

Elite Member
Mar 10, 2006
71,172
20,884
136
And for all those words you haven't described how speculation can drive up prices. You offer an explanation without an explanation.

We've seen speculation homes etc, the demand it created drove up home prices. But what happens when the expected (increased) demand doesn't appear? The bubble bursts.

Simple fact is that speculators are bullish on oil, why? They believe demand exceeds supply, or will. What if it doesn't? They'll lose their azzes. All you're suggesting is an artificial bubble due to expected demand/supply factors. Those are unsustainable, even in the short term, if they are not well founded.

Fern
Wait, what? How speculation drives up prices is economics 101, but yes commodities bubbles can and do burst, which is also a huge problem. The amount of money that has been invested into speculation has increased enormously in the last 10 years. When you have a larger amount of money competing for a (relatively) fixed supply of a product, prices increase. You do realize now that the major majority (like 70%) of the money invested in commodities is no longer used to actually buy the product, right? It exists purely to speculate on its price. You have more than doubled the amount of money vying for a product, but don't expect that to contribute to price increases?

This appears to be classic speculative bubble behavior, and we've already seen enormous volatility in a number of prices, sometimes varying by more than 50% in a single year. This is simply another example of foolhardy financial deregulation that's coming back to bite us in the ass. More government is needed.
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
106
Wait, what? How speculation drives up prices is economics 101, but yes commodities bubbles can and do burst, which is also a huge problem. The amount of money that has been invested into speculation has increased enormously in the last 10 years. When you have a larger amount of money competing for a (relatively) fixed supply of a product, prices increase. You do realize now that the major majority (like 70%) of the money invested in commodities is no longer used to actually buy the product, right? It exists purely to speculate on its price. You have more than doubled the amount of money vying for a product, but don't expect that to contribute to price increases?

This appears to be classic speculative bubble behavior, and we've already seen enormous volatility in a number of prices, sometimes varying by more than 50% in a single year. This is simply another example of foolhardy financial deregulation that's coming back to bite us in the ass. More government is needed.
You do not understand speculation other than on a superficial level.

You're describing demand, yet you do not know what drives it other than a profit motive or the word 'speculation' which you seeming believe is somehow magical. You see, a profit motive alone is insufficient. Why do they, speculators, believe the profit opportunity exists? Just because of their 'speculation'?

If their expectations of demand/supply are unfounded, the only thing that could possibly keep the bubble going is an ever increasing amount of (unfounded) speculation. Where does this parade of highly capitalized individuals who are willing to 'carry the torch' and pump higher amounts of money into the oil futures market come from? Is there an endless supply?

At the first decline you would wipe the speculators out, much like those entering the R/E market late. They would be long on positions that they can't take delivery on and would be forced to sell at a loss.

There are only two scenarios I see: (1) Their demand/supply expectations are wrong in which case the bubble will burst. It will be sooner rather than later given the enormous of capital required to keep it inflated. Or (2) They are correct, and, if so, at worst they are somewhat accelerating the inevitable price increase.

Accelerated permitting will defeat either of the above. The bubble will burst sooner, or if they are presently correct their calculations will necessarily change.

Otherwise, the obvious regulatory step is to increase the margin amount on oil futures. I assume I needn't explain why this would be effective without creating much downside for all involved, including legitimate players. Conservatives/business people have been suggesting this for some time now.

Fern
 

fskimospy

Elite Member
Mar 10, 2006
71,172
20,884
136
You do not understand speculation other than on a superficial level.

You're describing demand, yet you do not know what drives it other than a profit motive or the word 'speculation' which you seeming believe is somehow magical. You see, a profit motive alone is insufficient. Why do they, speculators, believe the profit opportunity exists? Just because of their 'speculation'?

If their expectations of demand/supply are unfounded, the only thing that could possibly keep the bubble going is an ever increasing amount of (unfounded) speculation. Where does this parade of highly capitalized individuals who are willing to 'carry the torch' and pump higher amounts of money into the oil futures market come from? Is there an endless supply?

At the first decline you would wipe the speculators out, much like those entering the R/E market late. They would be long on positions that they can't take delivery on and would be forced to sell at a loss.

There are only two scenarios I see: (1) Their demand/supply expectations are wrong in which case the bubble will burst. It will be sooner rather than later given the enormous of capital required to keep it inflated. Or (2) They are correct, and, if so, at worst they are somewhat accelerating the inevitable price increase.

Accelerated permitting will defeat either of the above. The bubble will burst sooner, or if they are presently correct their calculations will necessarily change.

Otherwise, the obvious regulatory step is to increase the margin amount on oil futures. I assume I needn't explain why this would be effective without creating much downside for all involved, including legitimate players. Conservatives/business people have been suggesting this for some time now.

Fern
Your post just showed that you don't understand speculation, even on a superficial level. It simply amazes me that after the recent bursting of the largest speculative bubble in history that you are appealing to the rationality of the market as if it would prevent another such one from occurring.

Go look at commodity prices by year and then go look at the amount of investment in such commodities by the same year. You will find (unsurprisingly) a high level of correlation between the two. It's not just oil, it's almost every commodity. Now either the earth just happened to start running out of almost all commodities at the exact same time, or there's something else driving up the price. Is someone blocking the Wheat Straights of Hormuz? Is the same thing happening with corn, soybeans, oats, etc, etc? Of course not. You are trying to treat the symptom instead of the disease because the real answer is something that doesn't fit with your ideology.

You're right that there might be some government action that could defuse the speculative bubbles other than regulation, but drilling permits in the US are unlikely to do so, and it doesn't solve the larger problem.
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
106
-snip-
Is someone blocking the Wheat Straights of Hormuz? Is the same thing happening with corn, soybeans, oats, etc, etc? Of course not. You are trying to treat the symptom instead of the disease because the real answer is something that doesn't fit with your ideology.
Jeebus, there were droughts in countries producing such crops. I.e., supply problems.

Fern
 

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