[quote]LIFTICVSMAXIMVS wrote:
Sifu wrote:
It makes sense to produce as much of our oil domestically as we can.
Only if it is profitable. [/quote]
There are geopolitical considerations that go beyond profitability. Also once a field is discovered and wells are dug if it is not profitable to use them we can cap them and have them ready to go.
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It insulates us from fluctuations in the world supply.
It will still be sold on a world market. If an American producer sells it too expensive oil consumers will buy it somewhere else. Everyone is beholden to the laws of supply and demand. Of course this assumes that government does not try to intervene in the market. [/quote]
So when the supply gets cut back and the price goes up we will have our own. There will be a point where a particular supply will become profitable and we bring that online.
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It improves our balance of payments so less of our money goes overseas which will strengthen our economy.
Our money does not go overseas. Only our debt. Why would a Chinese businessman trade dollars if he cannot spend them in his own country? Goods are traded…not cash. [/quote]
We are paying mostly cash for oil. There isn’t that much barter going on. The Chinese are holding over a trillion dollars in US currency. Our money does go over seas. The type of finacial instrument used to pay for oil does not change the fact that when it is bought overseas it affects our balance of trade.
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It will keep money out of te hands of people who hate us. Venezuela is in a real precarious position right now because the US is their only cash paying customer who can take unimproved oil at market prices. If we could cut off their exports to us Chavez is done.
It hurts them as much as it hurts the consumers who rely on them as a producer nation. [/quote]
We need to do everything we can to hasten Chavez departure from office. Wrecking the economy of Venezuela will do that. Once he is gone we can normalize relations.
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The Venezuelans and Iranians both need oil to be at $80 a barrel to meet their budjet projections this year.
They also rely on the market and cannot fix the price. [/quote]
You are kidding right? The Iranians can do a lot to affect price. The tensions over their nuclear program was the reason why speculators drove oil over $140 a barrel. All they have to do is ratchet up tensions, threaten to close off the straight of Hormuz and the price goes up. [quote]
Detroit just doesn’t have it’s shit together to produce economical cars. Cheap oil will do a lot to keep Detroit alive till they can compete.
This is true though people will still prefer cheaply made and reliable foreign cars. [/quote]
Detroit can make quality cars American like but they tend to be heavy. Look at the Mustang and the new Camaro they are almost 4000 pounds. The sixties models were 3000.
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Also once we have wells drilled we can always cap them off and have them ready in case there is a crisis.
You speak as if they have already been nationalized and that the American people have any say in the matter. Consumer purse strings and wallets always have the last word. [/quote]
The oil fields don’t have to be nationalised to do that. There are ways to encourage the oil companies to explore.
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We should also do what we can to help the Canadians and Mexicans maximize their production. That way if we do have to buy from foreign sources it will be from our neighbors.
Let some businessman figure that out. Again, no oil consumer is going to buy oil from a neighbor just to be neighborly if he can buy it cheaper elsewhere. He would find himself quickly out of business. [/quote]
There are things we can do to help the Canadians produce a lot more and cheaper. They need a heat source to extract oil from tar sands. What they are considering doing is using a nuclear reactor, we should be supportive of it.