Melvin Waldron, CGCS said: Dennis,
Do you think all that new production and supply could really bring the price down? Couldn't the middle east oil producers cut back on their supplies to keep prices up? They don't have as many people dependent on the money their oil makes, since they keep it in their family.
I wonder if the oil companies themselves would want to do that? If they are multi-national companies doing business all over the world and trading and selling on the world market, would they want prices down? Would they want their US markets not wanting oil from their African producing fields? Doesn't Asia/China's demand still keep oil prices up?
The one plus I see from your plan Dennis is more people working here, but will the oil companies put them to work? Could they be saving the America oil fields for later when other countries stop producing? Maybe American workers would cost more of their profits if they pay them more then other producing areas?
I have seen that their are more areas of drilling and producing going on now in the US then in 2008, yet the price has gone up.
Dennis, the other question is, this would be long term, how long would it take to get production up to the levels you propose? Even if the president ok'd the pipeline, how long until oil is flowing? Sounds good long term, but does it fix the problem now?
Just wondering.
Mel
Mel,
It absolutely would help stabilize the oil markets. Right now speculators speculate that if there is an issue in the middle east, there could be a problem with getting oil to market. If we were flush with supply, then speculation that supply can be interrupted in the middle east would not affect supply. The reason is that the speculators would know that the US will pick up the slack and increase production by opening the spigot a little more. It would make the oil markets a lot more stable. Just because iran is being difficult, oil prices would not fluctuate like they do now.
To answer your other question, how long would it take to get it to market? it doesn't matter, what matters is that it needs to be done. people said the same thing ten years ago. They said well it will take ten years for it to make a difference and if we would have done it ten years ago, we would not be in this predicament now. if we dont do it, then we will be having the same debate in ten years again.
As far as the oil companies wanting the prices to be high, not entirely true. Right now, demand has gone down because of price, but speculation that there will be turmoil in the middle east is driving the price up. Oil companies want to sell as much as they can produce and if they can produce more than they can sell, they will want the price to go down so they can sell it. Remember the supply and demand curves? By having a great supply in north america, we reduce the variable of the speculators in the equation and the price would be more in line with what the supply and demand curves suggest.