[HN Gopher] America produces enough oil to meet its needs, so wh...
___________________________________________________________________
America produces enough oil to meet its needs, so why do we import
crude?
Author : DocFeind
Score : 203 points
Date : 2022-03-08 16:47 UTC (6 hours ago)
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(TXT) w3m dump (www.nasdaq.com)
| chasd00 wrote:
| better to drink someone else's milkshake before you drink yours
| commandlinefan wrote:
| It seems like a good long-term strategic decision to import as
| much oil as you can get away with, assuming the world will run
| out of it eventually.
| soperj wrote:
| They wouldn't need to go hat in hand to those other countries if
| people weren't so adamantly against Canadian oil, since it's
| mostly heavy oil.
| munk-a wrote:
| Oil isn't a uniform thing - it's closer to marble than limestone.
| People import tuscan marble all the time due to the grain and
| qualities of the piece itself - it's quite the same with oil -
| not every barrel was created the same and America has some
| processing facilities specialized to consume a quality of oil not
| found domestically in large volume.
| robomartin wrote:
| I think it is time for those in science and technology to start
| to demand we stop lying to ourselves. Anyone who has reasonable
| command of basic mathematics, basic physics and, as a bonus,
| manufacturing and supply chains can do the math and verify that
| we are floating in a sea of lies.
|
| What are these lies?
|
| We can save the planet:
|
| When computed as the planetary-scale problem this is, it is very
| easy to see that the energy and resources we would need to affect
| change are in a range between impossible and massive. The scale
| of this fallacy is such that, even if we could do something, it
| is far more likely to kill all life on earth than to save
| anything.
|
| Fix Climate Change:
|
| Same as above. At a planetary scale it is nothing less than
| laughable to think we can do a thing about any of it. It takes
| natural processes an unimaginable amount of energy and resources
| over 50K to 100K years to drop atmospheric CO2 by 100 ppm. We
| actually have people believing in this religion that says we can
| affect climate change and save the planet in a 50 year time
| scale. In other words, 1000 to 2000 times faster than the natural
| rate of change. Nobody EVER asks them to "show the math". If they
| did, they could not. This is ignorant nonsense.
|
| Stop using oil (petroleum):
|
| Impossible. Impossible at a massive scale. The ignorant among us
| (which is to say, as it pertains to this problem, most people)
| think gasoline when they think of oil. Well, that's not what we
| use oil for exclusively. Petroleum is one of the most highly
| processed materials on this planet. We derive everything from
| lubricants and plastics to fuel from it. Secondarily, we derive
| almost everything you can touch and use in your daily lives.
| Almost everything at a hospital or the company you work for.
| Manufacturing of everything, from food to medical equipment,
| computers and clothes would grind to a halt without petroleum. I
| think I can say that we could not support 7 billion people on
| this planet without oil and its byproducts. In other words, once
| again, this is ignorant nonsense.
|
| Migrate to electric cars:
|
| In the US alone we have somewhere around 300 million vehicles. If
| anyone with the requisite knowledge took the time to do the math,
| you would quickly come to the stark realization that a migration
| to electrics is --from our current context-- impossible. About
| five or six years ago I wrote a relatively simple simulation
| model to try to understand this problem.
|
| My model told me that we would need to ADD somewhere between 900
| GW and 1400 GW of power generation capacity in order to go fully
| electric. For context, we currently generate about 1200 GW. In
| other words, we would have to double our capacity.
|
| For further context, a single nuclear power plan produces about 1
| GW. This means we need to build somewhere in the order of a
| thousand nuclear power plants, or, on average, twenty per US
| state. We can't build ONE in 25 years and we are actually talking
| about doing something that would require a thousand of them as if
| it were possible.
|
| I never had confirmation of my model until Elon Musk was asked
| this very question not too long ago. For those who think what I
| just said is nonsense, I'll let him confirm my findings and
| statement:
|
| https://www.youtube.com/watch?v=TcI6FaaDp8g&t=3510s
|
| As Elon says, it's worse than having to double our power output.
| Our infrastructure cannot handle this. It isn't built to carry
| and handle twice the power draw. Which means we have to rebuild
| almost all of it. Imagine having to replace almost every cable
| and transformer distributing power in the US as a starting point
| (it is far more complicated than that).
|
| So, once again, this is ignorant and stupid.
|
| There's more, but I'll stop here.
|
| I just heard the US President go on TV and pretty much get behind
| all of the above, again. The Prime Minister of Canada did a
| similar thing during a press conference with the leaders of UK
| and Netherlands (side note: How diluted is he that he decides to
| talk about this nonsense when Ukraine is going on? I don't
| understand.
|
| Yes, I know, these words are put in front of them in a number of
| cases to read off a teleprompter. However, we keep living in this
| "Emperor has no clothes" scenario where everyone is repeating and
| getting behind a collective set of lies both emotionally and
| financially. Lies that are easily proven to be so with some of
| the most basic of mathematical analysis. And, here we are,
| driving society mad with imaginary nonsense indistinguishable
| from religion.
|
| None of this is to say that cleaning-up our act isn't a good
| idea. However, the way we are going about it is to lie about both
| the reasons and plausibility of it.
|
| Electric cars are a good idea, but we need a 50 year plan to
| radically enhance our power generation and delivery
| infrastructure. A plan that would require a doubling of our
| generation capacity. It's like building an entire duplicate of
| all of the power infrastructure in the US. Not a small endeavor.
|
| While that happens oil will be crucially important. And oil has
| to be CHEAP or that infrastructure will be impossible to build.
| Oil has to be cheap because it is needed not just for the massive
| transportation requirements of all of the materials, components
| and systems that will go into doubling our energy production
| infrastructure, but for all of the byproducts that will be
| essential for the manufacturing and transportation industries
| (lubricants, plastics, etc.).
|
| And so, we have the US President (and other world leaders)
| reading what someone else put in front of them, likely from a
| purely ideological perspective, while completely ignoring the
| fact that what they are saying, what they want to do, is
| absolutely impossible form that ideological framework.
|
| The first thing a country like the US has to do in order to be
| able to reach for some of these ideas is exactly contrary to this
| ideology. We have to drill, extract and transport oil from
| everywhere in this land. Oil has to be $20 a barrel, not $130.
| Without cheap oil you cannot have a future full of electric cars.
| Which means not a chance in hell of "saving the planet" or
| affecting climate change.
|
| And, yes, we need HUNDREDS of nuclear power plants. Solar and
| wind can't do it alone. If you want to challenge that, be my
| guest. Do the math on the insanely massive number of batteries
| and solar panels we have to produce in order to match the output
| of a 1 GW nuclear power plant (24/7/365 for 50 to 100 years).
| Calculate all the materials, resources and CO2 that would be
| consumed and produced in the manufacturing and installation of
| such a system. And then multiply that by a thousand, because we
| need about 1200 GW.
|
| Get real.
|
| We need to start to speak the truth so we can put forth realistic
| plans for a cleaner future.
| hamstersauce wrote:
| mikewarot wrote:
| Because if we can buy it, and use everyone else's oil up first,
| we'll be the last to have it, instead of the first to run out.
| vpribish wrote:
| that's not it at all because A) we produce it and export it and
| B) we will never, ever, EVER, run out of oil - we will however
| stop using it - so C) the incentive it to pump as fast as
| possible while it still has value.
| usaphp wrote:
| from the article: "You see, the U.S. does produce enough oil to
| meet its own needs, but it is the wrong type of oil."
| dekhn wrote:
| Shhhh, don't let people know the Strategy!
| echelon wrote:
| > Because if we can buy it, and use everyone else's oil up
| first, we'll be the last to have it, instead of the first to
| run out.
|
| Furthermore, the US has pricing advantages as oil is traded in
| USD.
| sfe22 wrote:
| Not for long though
| eloff wrote:
| Obviously the extra gets exported, so it doesn't actually work
| that way.
|
| Also Peak Oil doesn't seem like it's going to happen anymore.
| It looks like we'll phase it out long before we actually run
| out.
|
| Demand will decrease at an ever quickening pace and investment
| in oil extraction will pretty much die. Most of the cheap to
| extract oil has already been exploited, so that could lead to
| oil becoming pretty expensive, pretty quickly. Despite crashing
| demand.
| Filligree wrote:
| "Peak oil" is literally just whatever moment in time oil
| extraction peaked. It never implied we'd run out, and what
| you're describing is the expected outcome.
| eloff wrote:
| Peak oil was all about the supply side peaking, and what
| that would mean in an environment of increasing, very
| inelastic demand.
|
| It looks like demand will peak first instead, which is
| quite different.
| dwater wrote:
| When I first heard the term ~20 years ago, there was
| speculation that we would use up the easily extracted oil,
| and it would just get more and more expensive to produce as
| we were driven to more challenging sources, to the point
| that consumers would be driven to other energy sources. And
| so "Peak oil" referred to the peak of supply, as in the
| GP's usage. You are implying the peak will be whenever
| demand tops out, which technically would still be "peak
| oil" but not in the way it's been used for a couple of
| decades.
| munk-a wrote:
| Peak oil implies that the demand actually reached a level
| to justify that peak level of extraction and with a
| decline[1] of the production that level of demand will be
| unsustainable. If peak oil is reached due to a temporary
| situation (like a war briefly driving up demand numbers)
| then maybe it's not an immediate issue - but we'd never
| have the same supply capacity again. It could be that in
| the 41st century earth is still producing 100 barrels of
| oil a year - but that's not a useful amount.
|
| Running out isn't the issue - the issue is that we've got
| an economy geared to consume a specific fossil fuel and
| constantly growing with a dependency on that fossil fuel -
| if we suddenly outstrip supply we could be left in a lurch
| where we have a reduced capability to run the machines
| that'd let us build machines that are less reliant on oil.
|
| 1. The common understanding peak - but even if things just
| remained level supply-side and demand grows it'd be the
| same outcome
| kilotaras wrote:
| "overseas oil, even after shipping costs, is often cheaper than
| domestically-produced crude + _domestic shipping cost_ "
| (emphasis mine).
|
| One reason that domestic shipping cost is so high is that 1920
| Jones Act[0] prohibits shipping between US ports with non-US
| ships. This drastically reduces competition and increases prices.
| Hawaii are particularly hit by this, with estimate $1800 per year
| per family in extra cost [1].
|
| [0] https://en.wikipedia.org/wiki/Jones_Act_(sailor_rights) [1]
| https://www.wsj.com/articles/jonesing-to-give-up-russian-oil...
| gowld wrote:
| That could be fixed by a tariff on underpriced foreign oil.
| istjohn wrote:
| _> > One of the primary impetuses for the law was the situation
| that occurred during World War I when the belligerent countries
| withdrew their merchant fleets from commercial service to aid
| in the war effort. This left the US with insufficient vessels
| to conduct normal trade impacting the economy. Later when the
| U.S. joined the war there were insufficient vessels to
| transport war supplies, materials, and ultimately soldiers to
| Europe resulting in the creation of the United States Shipping
| Board. The U.S. engaged in a massive ship building effort
| including building concrete ships to make up for the lack of
| U.S. tonnage. The Jones Act was passed in order to prevent the
| U.S. from having insufficient maritime capacity in future wars.
| [1]_
|
| 1.
| https://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920#Na...
| sirspacey wrote:
| This is such a fascinating look at how commerce doesn't just
| mean "economic commerce."
|
| We experienced this with supply shocks with COVID as well.
|
| It's interesting to balance "have the ability to meet our needs
| logistically" with "don't create price cartels that cause
| inefficiency in the market."
|
| Seems we'd have a vested national security interest in both
| securing commerce and enabling price competitiveness.
| givemeethekeys wrote:
| A moment of silence for all the plebs who'll have to drive to
| work and back because tech giants can't figure out how to use the
| internet.
| bigmattystyles wrote:
| This is tangential but nothing makes me recoil more than (mostly
| Republicans in the US) using this crisis as an opportunity to
| shill for more energy extraction and production in the US. Even
| if they have a point (and it's a big 'if'), it's such a
| transparent shill for their sponsors and makes me think 'have you
| no shame?'. Though I know the answer to that last one.
| WalterBright wrote:
| Having energy independence is critical for a nation to control
| its own destiny.
|
| Note that Japan attacked Pearl Harbor bringing the US into WW2
| because the US cut off their oil supply. And note that Germany
| invaded the Soviet Union in order to ensure a supply of oil.
| Successfully blocking Germany's oil access was a crucial factor
| in winning WW2. Britain would have sank in WW2 if not for US
| shipments of gas to it.
|
| Without gas, your military is kaput.
| jhallenworld wrote:
| Manchin and Murkowski were just falling over themselves in glee
| with this new argument for more drilling:
|
| https://www.youtube.com/watch?v=oT9W0e1T8jQ
| [deleted]
| toomuchtodo wrote:
| Even midwestern farmers continue to shill for corn ethanol to
| hold on to their subsidies as EVs destroy demand for gasoline
| and the corn ethanol additive. It's entrenched interests all
| the way down.
|
| https://www.politico.com/news/2021/05/04/biden-electric-vehi...
| mbfg wrote:
| https://www.youtube.com/watch?v=F-yDKeya4SU
| ok123456 wrote:
| EVs make up about 1% of car sales. Hardly "destroying demand
| for gasoline".
|
| We'd run out of lithium way before they even dented gas
| demand.
|
| If you factor in electricity generation from fossil fuels, in
| addition the lithium mining, your EV is hardly going to save
| the planet.
| cryptonector wrote:
| Yes, every friend of mine who says we should produce more turns
| out to have received a check from an oil company for saying it.
| president wrote:
| If anyone is to blame for our troubles, it's you for trying to
| make this an us vs them issue. There are valid reasons for and
| against domestic oil production.
| beloch wrote:
| "Most of the oil produced in the U.S. fields in Texas, Oklahoma,
| and elsewhere is light and sweet, compared to what comes from the
| Middle East and Russia. The problem is that for many years,
| imported oil met most of the U.S.'s energy needs, so a large
| percentage of the refining capacity here is geared towards
| dealing with oil that is heavier and less sweet than the kind
| produced here."
|
| Canada, Alberta specifically, produces precisely this kind of
| oil. In his speech announcing the ban, Biden listed several
| alternatives to Russian oil that the U.S. would rely on,
| including Saudi Arabia, but pointedly left Canada out. This is
| after one of his first acts as President was to scrap a (heavily
| politicized) pipeline that would have transported heavy Alberta
| oil to U.S. refinery centres.
|
| It's worth asking what is going on here. Why does the U.S. seem
| to prefer relying on oil from regimes that are as morally
| questionable as Russia while snubbing a long-time stable supplier
| that is right next door?
|
| Politically, Biden is committed to green energy and, of course,
| is not going to want to reverse his decision on a pipeline that
| Trump backed. However, reality is a thing. The U.S. needs heavy
| oil and isn't getting it as efficiently or environmentally
| friendly as it could because, as in Canada, infrastructure
| approval processes have become heavily politicized. Oil will
| indeed flow from Alberta to U.S. refineries, but mainly via
| tanker cars. This increases transportation costs and, hence, fuel
| costs. It also makes spills and accidents, such as occurred in
| Lac-Megantic, more likely.
|
| It may be time to look at ways to free long-term infrastructure
| planning and approval processes from the short-term needs of
| politicians looking for a quick boost in the polls before an
| election.
| gniv wrote:
| This (the various types of crude) is not the real reason, based
| on what I read before. The US is a major (biggest?) exporter of
| refined oil products. I think even western Europe gets a
| significant portion of refined product from the US. There is
| simply a lot of capacity, built in the 2010s. So the imports of
| crude are used for refining.
| caeril wrote:
| We _only_ produce enough oil to meet our needs via fracked shale
| wells, enhanced recovery methods, etc, all of which comes at
| great cost, both financial and environmental.
|
| I wouldn't expect an economist or an American Jingoist
| cheerleader to ever crack a geophysics book, but someone should
| look at the production decline curves of these wells and then
| take a wild-ass guess how much longer the shale miracle will
| last.
|
| We import oil because "energy independence" (at least from an oil
| & gas perspective, renewables and coal may be another matter) is
| a fleeting, rose-colored dream, from which we will soon awake.
| chernevik wrote:
| "politicians, it seems, would rather keep a situation where
| periodic energy crises give them a cudgel with which to beat an
| incumbent"
|
| What? The politicians that matter _are_ incumbents.
|
| Not a great article.
| matt123456789 wrote:
| So if I understand correctly, US refineries are built to process
| imported oil, rather than the domestic oil drilled out of US
| land. Which means that if the US stops importing, it will not
| have a way to meet domestic consumption demand without building
| new refineries, or making (presumably) substantial modifications
| to existing processing infrastructure. What's the lead time and
| cost to build that out?
| nradov wrote:
| It's nearly impossible to build or expand refineries in the US
| anymore due to environmental laws, real estate costs, and local
| opposition. And I can't really blame the NIMBYs: living next to
| a refinery sucks due to the air pollution, and risk of spills
| or fires.
| [deleted]
| peter303 wrote:
| Refineries are like nuclear plants- no new ones in almost a
| half century (1976), but significant upgrades of existing ones.
| Both due to environmental regulations and cost.
| zubiaur wrote:
| A new major refinery? Give or take, a decade. From planning,
| basic engineering, to permitting, detailed engineering and
| construction.
|
| The fastest, easiest way to solve the issue is to blend our
| light crude with heavy crude to have something usable in our
| refineries.
|
| The cheapest, fastest and safest way to move oil is through a
| pipeline. The most geopolitically stable supplier of heavy and
| super heavy crude oil is just north of our border. Canada. The
| pipeline that was meant to bring their crude, the keystone
| pipeline was cancelled after its permits were revoked.
|
| The con of Canadian oil is that some of it is produced by Steam
| Assisted Gravity Drain, a process were steam has to be injected
| into the reservoir to heat up and reduce the heavy oil's
| viscosity, allowing it to drain into a horizontal well, drilled
| closely below the steam injecting well. This is an energy
| intensive process, and if the energy to produce the steam is
| derived from fossil fuels, it's carbon footprint is large.
|
| Another potential suppliers of heavy crude is Venezuela, but
| it's dictatorship has mismanaged the industry to the point that
| they are importing crude and distillates.
|
| There are no solutions, only trade offs.
| nradov wrote:
| If we get really desperate, expanded drilling off the coast
| of California along with building another refinery near Santa
| Barbara could also be part of the solution. Of course many of
| us in California would oppose this, for understandable
| reasons.
| badloginagain wrote:
| Venezuela oil industry is literally falling apart, the real
| amount of oil they could produce with lifted sanctions
| doesn't make much of a dent in global demand.
|
| Oil markets are pretty tight to begin with- they're finely
| tuned to react to even marginal shifts in supply/demand. Have
| massive changes like the lockdowns or turn off a major
| supplier, you see equally massive swings in price,
| backwardation/contango levels, etc.
| zubiaur wrote:
| Absolutely! Venezuela's oil (or any) industry is not
| viable. And you are absolutely right. Oil markets are
| incredibly inelastic in the short run.
|
| Think about your individual energy consumption. I assume
| you have to drive and heat your house, and how much you
| drive, and weather you heat up your house, does not, in the
| short run, vary much weather gas is 2 dollars or 3. Many
| many people behave the same way, thus we deem demand to be
| inelastic.
|
| Something similar happens on the supply side. Oil projects
| are incredibly capital intensive, sometimes taking years to
| come online. Thus oil companies, in the short term, can
| only extract so much oil from the ground, regardless of the
| price.
|
| A supply or demand shock, that is, displacement of either
| curve to the right or left, leads to a much larger change
| of the clearing price.
| jessaustin wrote:
| Their equipment is in bad shape because sanctions have
| prevented them from buying supplies, parts, tools, and
| services. When they're able to purchase those (which could
| be soon [0]), the equipment will be fixed.
|
| All it took to get rid of sanctions on a nation that has
| never harmed or threatened anyone was for one of their
| competitors in the petroleum market to invade another
| nation...
|
| [0] https://www.wsj.com/articles/u-s-officials-meet-with-
| regime-...
| zubiaur wrote:
| Industry sanctions started in 2018. Their production had
| been declining since 2014. It's not just an issue of
| equipment. Its also a brain drain, corruption, lack of a
| functional justice system, legal guarantees, property
| rights...
|
| Competent Venezuelan oil professionals have been fleeing
| the country and can be found in Colombia, Brazil, and
| other oil producing countries farther away.
|
| The Venezuelan regime is far, far from being harmless and
| nonthreatening, their human violations are numerous and
| nobody is suffering the consequences of their actions
| more than Venezuelans themselves. I've seen the plight of
| their people on the immigrants who fled to my own
| country.
|
| Even their own PDVSA stars don't drink the Kool-aid... It
| was sad to share a table with disillusioned young,
| bright, venezuelan engineers at the SPE Latin America
| Heavy and Extra Heavy Oil Conference, so ask me how I
| know...
| jessaustin wrote:
| Sanctions on PDVSA started in 2014. Sanctions that
| effectively limited the import of medical supplies
| started in 2015. [0] The Venezuelan emigrants you see in
| your nation are fleeing the depression caused by those
| sanctions. After that stops, many of them will return to
| Venezuela.
|
| [0] https://www.telesurenglish.net/news/Timeline-of-Half-
| a-Decad...
| zubiaur wrote:
| That timeline grossly misrepresents the nature of the
| sanctions and is nothing more that a hit piece by a
| propaganda arm of the Venezuelan government.
|
| There is no freedom of press in Venezuela.
|
| Their take on law 113-278 is blatantly false.
|
| https://www.govinfo.gov/content/pkg/PLAW-113publ278/pdf/P
| LAW...
|
| Venezuelan sanctions targeting PDVSA sanctions start in
| EO 13808.
|
| https://home.treasury.gov/system/files/126/13808.pdf
|
| The immigrants I see in my country are fleeing a
| dictatorship.
| giantrobot wrote:
| > The pipeline that was meant to bring their crude, the
| keystone pipeline was cancelled after its permits were
| revoked.
|
| The Keystone XL pipeline was meant to take Canadian oil to
| the Gulf of Mexico to refineries intending to export it. Very
| little of the refinery infrastructure at the terminal end of
| the pipeline was equipped to redistribute it domestically.
| Something like 70% of the oil transported by Keystone XL
| would have been for export.
| Teever wrote:
| Also as a Canadian I'm a little baffled why we should be
| prioritizing building pipelines that run north to south to
| export our oil when we can run pipelines east to west to
| supply our own people and export on our own shores.
| cmrdporcupine wrote:
| Why do you think this is not already the case? Just
| curious, because it seems like many people in my birth
| province of Alberta aren't aware that we already have
| these pipelines, and think that people here in Ontario
| and in Quebec are burning Saudi oil.
|
| Line 9 runs practically right behind my house, and since
| it was reversed some years ago it feeds facilities in
| Ontario (and Quebec) with Alberta oil. Line 5 runs under
| the great lakes, all the way from western Canada to
| refineries in Sarnia (and is currently under threat from
| Mich. governor, but that's a separate topic)
|
| 90ish percent of Ontario's oil consumption is domestic
| oil depending on time of year and so on. The remainder is
| mostly from the US. Small % from middle east.
|
| Oil from Alberta makes it all the way to refineries near
| Montreal. Last I looked 70% of Quebec's oil is domestic
| origin.
|
| Politicians in Alberta have become masters of ignoring
| this key fact in their rabble rousing.
|
| Could capacity be increased? Maybe. Is it strictly
| necessary? I don't know. Should we be reducing
| consumption anyways? Yes.
|
| See map here, on Enbridge's website, zoom in to Ontario:
|
| https://www.enbridge.com/reports/2021-liquids-pipelines-
| cust...
|
| Now, the Atlantic provinces, that's another story. But a
| much smaller market.
| vkou wrote:
| As a non-Albertan, I'm baffled by why Alberta thinks that
| building east-to-west pipelines to prop up their economy,
| while saddling their neighbours with all the risks is
| good policy.
|
| I mean, I understand that may be a good policy for an
| Alberta, but there's no reason why anyone else should
| think it's a good policy for them.
| soperj wrote:
| Alberta mines & refines oil that every other province
| uses, and is saddled with all the pollution from that.
| Why should Alberta prop up the economies of all the other
| provinces and have to deal with the actual consequences
| of that?
| earleybird wrote:
| In what way is a pipeline riskier than truck/rail/ship?
| vkou wrote:
| False dichotomy. It's not a choice between pipeline and
| rail, it's a choice between pipeline, rail, and nothing.
| Since its neighbours receive nothing but liabilities,
| regardless of which option is taken, I'll go with
| nothing.
|
| Tar sands oil is an endless, pointless jobs program. It's
| barely afloat when oil prices are high, and a rock around
| the neck of the Canadian economy, and GHG commitments
| when they aren't. I'm not interested in drastically
| cutting back on my energy usage, to balance the books
| with one of the dirtiest fuel producers in the world.
|
| Pipelines do nothing for me, but encourage this
| economically-destructive industry to expand. For every
| dollar of wealth it generates, it destroys a dollar and a
| dime.
| earleybird wrote:
| I'm looking at it through a lens of least impact overall
| and totally agree about the tar sands. Trucking is
| wasteful, shipping and trucking don't have a very good
| ecological safety record. A good step in reducing
| environmental effects of oil is to stop exporting it as
| that just moves the problem elsewhere. Being self
| sufficient and weaning ourselves off of oil & gas is a
| step in that direction. We need to fix the problems at
| home before telling others what to do.
| earleybird wrote:
| Because our federal government is entirely self serving
| (from a western perspective).
|
| https://en.wikipedia.org/wiki/National_Energy_Program
| ipaddr wrote:
| Many reasons:
|
| Because the market is bigger and demand is greater
|
| Because Quebec is powered by hydro and doesn't need oil
| and doesn't want the pipeline going east because they
| sell power.
|
| The eastern provinces get oil from offshore locally or
| from Saudi/middle east so the cost doesn't make sense.
|
| The oil is going south anyways on trucks. The pipeline
| took so many trucks off the road.
| soperj wrote:
| >Because Quebec is powered by hydro and doesn't need oil
| and doesn't want the pipeline going east because they
| sell power.
|
| Quebec uses tons of oil every day, whenever they fill up
| their cars. Most of it comes from Saudi Arabia, brought
| into the Irving Refinery in New Brunswick. Irving would
| use Canadian oil if they could get it.
| cmrdporcupine wrote:
| Sorry but this is factually incorrect. The majority of
| Quebec's oil is from Alberta, with some small amount
| being from the US and only a tiny portion coming from the
| Irving refinery.
|
| https://www.cer-rec.gc.ca/en/data-analysis/energy-
| markets/pr...
|
| "Line 9 has been delivering crude oil from Sarnia,
| Ontario to Montreal since its reversal became operational
| in December 2015. The line has a capacity of 300 Mb/d and
| transports a combination of oil from western Canada and
| the U.S. Midwest.
|
| _In 2018, deliveries of imported and eastern Canadian
| crude oil on the Portland-Montreal Pipeline fell to an
| average 2.5 Mb /d, less than 1% of its capacity._"
| (italics mine)
|
| That being said, GPP is partially correct: Quebec is the
| highest electricity producer and consumer in Canada, but
| it's almost entirely hydroelectric and their electricity
| is cheap. " _Quebec's emissions per capita are the lowest
| in Canada at 9.4 tonnes CO2e - 52% below the Canadian
| average of 19.6 tonnes per capita._ "
|
| With the highest electric vehicle uptake in the country,
| and the lowest greenhouse gas emissions, seems Quebec has
| the right to be smug (see
| https://www.youtube.com/watch?v=AnFAAdOBB1c)
|
| Anyways, please don't spread political disinformation.
| kodah wrote:
| I was curious about this so I looked around. From what I
| can tell it looks like what you're saying is part of a
| political disinformation campaign started by Kirsten
| Gillibrand.
|
| https://www.politifact.com/factchecks/2017/apr/16/kirsten-
| gi...
|
| https://www.lsu.edu/hss/english/files/university_writing_fi
| l... (Page 5)
|
| If I understand these summaries correctly:
|
| 1. Countries in Latin America are developing and therefore
| using more oil so they have less to share with us.
|
| 2. We are consuming slightly more oil.
|
| 3. Oil obtained from hostile and unreliable regions should
| be replaced.
|
| The effects would be that oil consumed from the pipeline
| would be cheaper, it would be more reliable, and while not
| being totally for domestic use would make a significant
| dent in our oil consumption in the right categories.
|
| Edit:
|
| Opposition to the Keystone XL likely would have been more
| effective if it focused on (potential) environmental
| impacts as well as the spill that occurred in 2017. I think
| that's what the Biden administration focused on when it
| cancelled the permits.
| giantrobot wrote:
| PolitiFact's article is foolishly splitting hairs. The
| concern about Keystone XL's exports was never about the
| _oil_ but the refined products (gas, etc). The Texas
| refineries that would have been at the XL 's terminus
| already export a majority of their refined products.
|
| They're not the only refineries that handle heavy crude
| but they are the ones with the easiest access to the
| export markets of Central and South America.
| kodah wrote:
| > It is true that exports of petroleum products from Gulf
| Coast refineries have increased considerably in recent
| years. That's part of why PolitiFact rated a similar
| statement by Obama Mostly False in 2014. While the trend
| adds a grain of truth to her claim, it does not mean all
| of the oil that will come from the Keystone XL pipeline
| will be immediately exported.
|
| I don't think it's splitting hairs, that's the main point
| of the conclusion. What she said: The
| Keystone XL pipeline "doesn't even have any oil for
| America."
|
| is verifiably untrue.
| vlovich123 wrote:
| It's kind of shocking that it takes 10 years to build
| something like this, no? Seems like there should be a way to
| streamline this process.
| grandinj wrote:
| It is an enormously complex factory with a high probability
| of going boom if you do something wrong, so not really, no.
| Enginerrrd wrote:
| There probably are ways to do it using modular
| components. They did this with natural gas power plants
| (see Wartsila power plants for example.) In that case,
| you can probably get it down to 2-3 years.
| grandinj wrote:
| Natural gas power plants are relatively modular, and we
| can chain together units to make a bigger power plant.
| There is no such equivalent modular unit for petroleum
| processing. Each plant is highly customised to deal with
| a specific mix of different kinds of input oil, and to
| deliver a specific mix of output petroleom products. They
| can be reconfigured within a narrow range, but they're
| not highly flexible.
| cryptonector wrote:
| We have an EPA. China doesn't. It's easier to build these
| things in places where people are too poor to care about
| the environment or don't get to (because their governments
| don't) care about the environment.
| SilasX wrote:
| There's no way to protect the environment but by making a
| new refinery take ten years?
| cryptonector wrote:
| Right or wrong, that is basically what happens.
| willcipriano wrote:
| China has environmental protection agencies, they just
| aren't so incompetent that they take a decade to process
| a application.
|
| "The competent department of environmental protection
| administration under the State Council shall conduct
| unified supervision and management of the environmental
| protection work throughout the country."
|
| http://www.china.org.cn/english/environment/34356.htm
| throwaway0a5e wrote:
| If the Chinese agency plays the delay, deny and harass
| game they will likely be replaced by an agency that is
| capable of protecting the environment without standing in
| the way of industrial progress.
|
| When the EPA plays the delay, deny and harass game they
| amass brownie points with politicians.
|
| Likewise it's probably safe to assume that the Chinese
| agency is much more set up (and well practiced at) making
| sure things actually get done on defensible timelines.
| steve76 wrote:
| Lendal wrote:
| It's more than just the environment. The more engineers &
| scientists you have, the faster you can build it. The
| more people you're willing to crush beneath your wheels,
| the faster you can build it.
| antattack wrote:
| Goes to reason that heavy crude refineries should be able to
| process light crude just fine since light crude is just a
| fraction of the heavy one.
|
| What likely is the issue is the cost - refineries will make
| less money refining light crude oil as part of them will be
| underutilized.
|
| One thing that article did not mention is that perhaps
| refineries have setup to refine heavy crude because of
| Canada's tar sands and XL pipeline.
| bena wrote:
| Regardless, this does seem like a situation where the best time
| to start that was yesterday and the second best time is today.
| thematt wrote:
| It's not just a matter of building more refineries to process
| it. The different API Gravities of the oil are used to output
| different products. Gasoline, jet fuel, etc.
|
| So yes, you could modify refineries (at significant expense) to
| process different grades of crude, but in order to target
| different outputs we still need to import the different grades
| of oil because the refineries end up mixing/matching to get the
| levels they need. The US produces a lot of light oil, but less
| of the medium/heavy grades you'll find in Canada or the Middle
| East.
| myself248 wrote:
| You seem to be the first to mention, something that I think
| is of supreme interest: How adaptable are the refineries? All
| oil must have variations in its properties, and every
| refinery must be able to cope with a certain amount of
| variation.
|
| If you have a refinery that's built for heavy sour oil, how
| much lighter and sweeter can it handle without any
| modifications at all? And how much time and money does it
| take to broaden its range further?
|
| What are the heavier grades used for, I'd imagine stuff like
| bunker fuel and asphalt? If the prices of those end products
| went up, wouldn't the market adapt to a certain degree, say
| using more concrete and less asphalt, etc?
| thematt wrote:
| Lighter oils get used for gasoline, diesel, and aviation
| fuels. Heavy oils get used for plastics, petrochemicals,
| and road surfacing.
|
| I wish there was an easy answer to your refinery question.
| They're all different, but there are three basic types of
| refineries:
|
| The simplest is a topping plant, which is basically just a
| distillation unit. The output you get is basically whatever
| the natural yield of the oil is. These refineries can
| typically only process light crudes.
|
| The next level refinery is a cracking refinery. These take
| the gas oil output from the distillation and breaks it down
| further using high temperature, pressure, and catalysts.
| This allows for the breakdown of slightly heavier crudes.
|
| The final level is a coking refinery. This takes all the
| residual fuel and "cracks" it into a lighter product. This
| increases the yield of higher value gasoline, which allows
| a refinery to take in cheaper heavier crudes.
|
| Building a new refinery is a 5+ year process that costs
| about $7-10 billion. I'm not sure what upgrading an
| existing one costs, but it's somewhere in that ballpark.
| Keep in mind that a large influence on the type of refinery
| is their geographic location. They're built to accept the
| type of oil that flows in the pipelines.
| Symbiote wrote:
| Would they also be built to produce the type of products
| needed by the local-ish market?
|
| So one in Europe will have a higher fraction of diesel
| (used in most trucks, some cars, and some trains)
| compared to the USA (trucks and almost all cars use
| petrol).
|
| (Compare: https://www.statista.com/statistics/189410/us-
| gasoline-and-d... -
| https://www.racfoundation.org/data/volume-petrol-diesel-
| cons... -- the ratio is very roughly reversed.)
| jmclnx wrote:
| Simple, $
|
| When the gas shortages happened in the 70s, a law was pass
| limiting the prices of US sourced oil sold domestically. It was
| put in place to lower the "oil shock".
|
| I do not know the status of that law, but I assume it still
| exists.
|
| So, US source oil can be sold at a higher price if exported and
| that forces the US to import to make up the difference.
|
| I think there was a loophole that allowed this to happen,
| probably it was not thought at the time it would be viable to
| export US oil or US would never have the oil to export.
| N_A_T_E wrote:
| I recall reading we only have oil reserves to meet our demands
| for 5-15 years if sourced exclusively from ourselves.
| julianeon wrote:
| Seems disingenuous to not mention that most of that US oil (65%!)
| comes from environmentally destructive practices, which is a damn
| good reason to prefer imports.
|
| Or, put simply: how much US oil comes from fracking? Not a small
| number - the aforementioned 65%. Source for this data: the U.S.
| government.
|
| https://www.eia.gov/tools/faqs/faq.php?id=847&t=6
|
| Remember, these aren't small amounts of water either. I live in
| California, where we have drought conditions. How much water do
| you think a typical well uses? "Up to 9.6 million gallons of
| water (!!!!) per well." For just one well!
|
| https://www.scientificamerican.com/article/analysis-fracking...
|
| That whole sentence is worth quoting in full:
|
| Oil and natural gas fracking, on average, uses more than 28 times
| the water it did 15 years ago, gulping up to 9.6 million gallons
| of water per well and putting farming and drinking sources at
| risk in arid states, especially during drought.
|
| So, here's the thing. The "cost" of that water in the market is
| just the cost in dollars. But to Americans, and future
| generations? It's much higher. You can throw a stone at a US map
| and hit a state that's experiencing drought conditions right now
| (and that well water is permanently off limits for drinking).
|
| If we can slash the real cost - the externality cost - by just
| buying it from elsewhere, we should. And we do. And that's the
| right choice, despite what NASDAQ thinks.
| landemva wrote:
| I will summarize those paragraphs - as long as USA can afford
| to export manufacturing pollution to poor countries that allow
| excess pollution, we should continue to have the pollution
| dumped over there.
|
| I don't agree with that. I support pollution import duties to
| remove some of the economic advantage of dumping pollution over
| there.
| namdnay wrote:
| Most oil isn't extracted by fracking
| Spooky23 wrote:
| The big oil producers still mostly just pump.
|
| The US exhausted fields in Pennsylvania, New York and Ohio
| 100+ years ago and has depleted the big western fields as
| well - production in the US requires fracking.
| yyyk wrote:
| >comes from environmentally destructive practices, which is a
| damn good reason to prefer imports.
|
| I'm sure Russia, Venezuela, Iran, Saudi, etc. really care about
| the environment and their reports about environment
| sustainability* are totally true.
|
| The average oil producer is a dictatorship, and I suspect the
| impact of lack of transparency is more important than the
| drilling method - they have every motivation to cut corners,
| while American oil is openly regulated. So from the global
| perspective I doubt American production is more polluting.
|
| * If they even have any.
| xmprt wrote:
| Other countries might be less sustainable however that lack
| of sustainability doesn't impact the US as much. The real
| cost of oil drilled within the US is higher than the real
| cost of oil drilled outside the US.
| yyyk wrote:
| We're just seeing a real live demonstration that the real
| cost of oil produced by the typical non-US oil producer has
| its own externalities and they're not pretty. With the
| money saved by preventing these issues one should be able
| to solve the water problem (waste recycling?
| desalinization? other liquids?).
| opwieurposiu wrote:
| Most of the frac water used these days is "produced water", ie.
| dirty/salty water that comes up with the oil from other wells.
| dgfitz wrote:
| > Seems disingenuous to not mention that most of that US oil
| (65%!) comes from environmentally destructive practices, which
| is a damn good reason to prefer imports.
|
| This reads like the NIMBY stance of oil production. "Make
| whatever mess you want, keep it where it is! Can't have that
| happening in my state/country!"
|
| So you'd rather export pollution instead of being energy
| independent and trying to fix fracking laws?
| Symbiote wrote:
| Oil produced from other sources (i.e. traditional wells) is
| presumably less bad for the environment, since it isn't using
| huge amounts of fresh water.
| brokencode wrote:
| The point is that we need to use fracking to extract much of
| the oil in the United States, as opposed to less destructive
| techniques that can be used in other oil fields. It's not
| NIMBY if it truly is worse when it happens in your backyard.
| president wrote:
| Your rationale makes sense in a paradise world where there are
| no wars and no countries vying for hegemony. There is an
| immense national security aspect and domestic economic
| situation you are ignoring which could not be anymore relevant
| today.
| jensensbutton wrote:
| So the solution is the import from countries where the
| practices are more destructive and there's less regulation to
| reign them in?
|
| > If we can slash the real cost - the externality cost - by
| just buying it from elsewhere, we should.
|
| I wonder what you think "externality" means?
| t0mas88 wrote:
| I think a lot of oil import comes from countries which don't
| need these practices? Saudi Arabia being an example of a
| place where the oil almost comes out of the ground on its
| own, no need for fracking.
| dchichkov wrote:
| Putting a price of $6.5 for a gallon of gas (this is how much
| gas in Europe normally costs EUR1.58/liter = $6.5/gallon) is a
| right thing to do.
|
| Hopefully this would diminish consumption, reduce carbon
| footprint and wouldn't require purchasing extra crude. May
| cause a revolt though, if advertised to the main street
| improperly.
| jcheng wrote:
| The right thing for the environment maybe, but it would be an
| extremely regressive tax, regardless of how it's advertised.
| jrockway wrote:
| For a smooth transition, you need to "make before break". If
| we take away people's cars overnight, then people will be
| stranded with no way to buy food or earn income. (Raising
| prices on gasoline is a slower means of effecting change, but
| people don't have the opportunity to just throw away their
| home and home equity to move somewhere with public
| transportation. This just makes people miserable; it doesn't
| help them out of their miserable situation.) We can't undo
| 100 years of terrible urban planning with one stroke of the
| pen.
| roody15 wrote:
| Creating conditions to force people into highly dense urban
| area also = miserable people.
|
| Not sure of a good answer here
| xmprt wrote:
| > Creating conditions to force people into highly dense
| urban area also = miserable people.
|
| Do you have a source for this? Denser European cities
| seem to have much higher happiness than people living in
| single family residential suburbs.
| FpUser wrote:
| I consider cramming millions of people in tiny city
| apartments terrible planning as well. I want to smell the
| roses, not human waste. The root cause I guess that there
| are too many of us
| landemva wrote:
| I will support $10 gallon gasoline if we first pass
| constitutional amendment to repeal the personal income tax.
| FpUser wrote:
| Nice try. Other than the government mandating this price
| which is just another tax the operators have no reasons to
| suddenly charge this much.
|
| Besides you either have loads of money and do not give a
| hoot or you just live close to work.
| landemva wrote:
| Yes, add on to the tax which is already around 55 cents
| per gallon. Would you support $6 gallon fuel tax while
| relieving everyone from fear of IRS audits? (It's for the
| children!) And add $10 to aviation fuel.
| e4e78a06 wrote:
| As long as public transportation in the US continues to be
| unsafe, dirty, and slow people will continue to drive cars.
| It doesn't matter how much public transport you build out, if
| I have to sit next to a guy smelling like piss I will never
| get on the subway when I have a car.
| jrockway wrote:
| You could sell your car to get the guy some new clothes and
| a shower.
| new_stranger wrote:
| This just hints at how toxic the fracking chemicals used are.
| It's not just the water, it's the pollution that is compounding
| this issue. Water always has, and always will recirculate - but
| pumping dangerous contaminants into our water tables is a big
| problem that effects current generations as well.
| dr_dshiv wrote:
| Evidence please. (Of contaminants in water tables, not the
| toxicity of oil)
| op00to wrote:
| You're asking for evidence that oil exploration and
| extraction leaves contaminants in water tables? The US EPA
| gives 5 easy to understand situations where fracking
| destroys drinking water through toxic chemicals making it
| into groundwater.
|
| * Spills during the handling of hydraulic fracturing fluids
| and chemicals or produced water that result in large
| volumes or high concentrations of chemicals reaching
| groundwater resources;
|
| * Injection of hydraulic fracturing fluids into wells with
| inadequate mechanical integrity, allowing gases or liquids
| to move to groundwater resources;
|
| * Injection of hydraulic fracturing fluids directly into
| groundwater resources;
|
| * Discharge of inadequately treated hydraulic fracturing
| wastewater to surface water; and
|
| * Disposal or storage of hydraulic fracturing wastewater in
| unlined pits, resulting in contamination ofgroundwater
| resource
|
| https://www.epa.gov/sites/default/files/2016-12/documents/h
| f...
| dr_dshiv wrote:
| Those are all listed _possibilities._ Not evidence for
| its occurrence.
|
| Contrast this to the evidence for coal contaminating
| water supplies with mercury. Fracking, despite its
| reputation and scary name, is safe. Like, flying
| airplanes safe.
| dr_dshiv wrote:
| Here is a very recent paper describing three worst of the
| worst situations, where a casing was improperly cemented.
| Even then it is really unclear how bad the contamination
| was. Keep in mind there are over a million fracked wells
| in the USA.
|
| Hammond, P. A., Wen, T., Brantley, S. L., & Engelder, T.
| (2020). Gas well integrity and methane migration:
| evaluation of published evidence during shale-gas
| development in the USA. Hydrogeology Journal, 28(4),
| 1481-1502.
| markdown wrote:
| Can you light your tap water on fire, or do you refuse to
| live where this "safe" fracking occurs?
| Spooky23 wrote:
| Drilling companies are able to treat the toxic soup that
| is pumped into the ground as trade secrets, so it's
| difficult to publish definitive data.
|
| Fracking leaks methanol, salts and other compounds into
| ground water. Operations often contaminate water from
| leaky pits with diesel and other compounds.
|
| Coal is probably the nastiest fuel by any measure. But
| that isn't to say that fracking operations are not
| problematic, and since industry has fought tooth and nail
| to prevent meaningful, peer reviewed study of the issue,
| it's absurd to compare to a well understood, well
| measured thing like air safety.
| dr_dshiv wrote:
| Here is a review of over 20 studies showing that fracking
| does not contaminate groundwater. Including studies by the
| USGS, EPA, Stanford, etc: https://www.cred.org/scientists-
| fracking-doesnt-harm-water/
|
| But very open to additional evidence.
| fn-mote wrote:
| A non-partisan source would be more convincing.
|
| ===
|
| A spot check shows item 15 in the list, published 2014,
| is based on work from 2011-12 and the abstract concludes
| with:
|
| > This study provides a baseline of water-quality
| conditions in the Monongahela River Basin in West
| Virginia during the early phases of development of the
| Marcellus Shale gas field. Although not all inclusive,
| the results of this study provide a set of reliable
| water-quality data against which future data sets can be
| compared and the effects of shale-gas development may be
| determined.
|
| That is to say, this is a baseline measurement from the
| start of exploration, not a demonstration that fracking
| goes not contaminate groundwater.
|
| ===
|
| The MIT report listed as item 26 on the list does say the
| process is mostly safe, which I respect, but also page 39
| lists counts of incidents over a four or five year
| period, including 20 incidents of "groundwater
| contamination by natural gas or drilling fluid". So it's
| not like problems do not happen.
| thedudeabides5 wrote:
| Weird that this is framed as a negative thing.
|
| The US is a leader in oil refinement technology, such that there
| are oil rich Latin American countries (Venezuela and Mexico) that
| rely on exporting crude and importing refined products from the
| US to meet THEIR energy needs.
|
| This isn't about the US going full 'no import oil', it's about
| finding the entire west non-Russian sources of crude.
| tomohawk wrote:
| Not mentioned in the article, the US is actually a few different
| oil markets.
|
| For example, the east coast has refineries, but they are geared
| for oil from the middle east. Why?
|
| One reason is the Jones Act, which prohibits shipping between US
| ports except by US crewed/flagged vessels. There basically aren't
| any of those.
|
| So, we ship liquified natural gas from Texas to Europe and Asia,
| but are not allowed to ship to the east coast or other US ports.
|
| The other reason is that pipeline capacity to the east coast is
| severely constrained. Many planned pipelines have been cancelled.
| It takes decades with all the NIMBY laws to build one, but only
| one president to throw all that work out with a decree.
|
| Pipeline capacity is further constrained due to regulations for
| boutique fuels. The gas you can use can vary from state to state.
| If you start a run of said fuel on the pipeline, you can't serve
| the whole intended market for when the pipeline was designed.
|
| And then there is the whole ethanol thing. It has to get shipped
| at great expense from the midwest to the coasts where regulations
| say it must be used.
| [deleted]
| andrewjl wrote:
| The simple answer is that oil isn't fully fungible. Sweet vs sour
| crude, different grades, serve different needs. Different
| extraction methods are also viable at different price levels,
| many domestic sources only become profitable at higher levels.
| (Like the levels we're seeing now. Which are stratospheric.)
|
| A good contrarian argument for energy independence is it'll
| impose a higher floor cost on oil prices, making renewable
| projects more viable. It would also make expensive one-time
| upgrades that enhance energy efficiency look better on paper when
| compared against opportunity costs.
| jhallenworld wrote:
| "overseas oil, even after shipping costs, is often cheaper than
| domestically-produced crude"
|
| This is all you need to know.
|
| If we had an oil export tariff, then we would very quickly become
| oil independent. Buyers in other countries are in competition
| with Americans for this oil, so if you really want to keep the
| price low in America, we should have such a tariff. Why should we
| give away our natural resources like this?
|
| Additionally: in these emergency times, a reasonable argument
| could be made for price controls.
| chiefalchemist wrote:
| Well, there's that and the fact that historically oil is an
| (economic) weapon. Some ecomonies are more susceptible to price
| changes than others. Some can use that weapon proactively,
| others can so nothing but reactively suffer the consequences.
|
| For example, when the USA allowed fracking production to hockey
| stick (started under Bush #2 and took off under Obama), the
| international price dropped significantly. That hurt countries
| such as Venezuela and Russia.
|
| Oil is like a drug. Once you're hooked you're no longer free.
| SiempreViernes wrote:
| You realise that selling to the highest bidder is pretty far
| from giving things away?
| jhallenworld wrote:
| And how much do they pay to extract the oil from public
| lands?
|
| This is very relevant because of this new thing that just
| happened. There was an auction for rights to install an off-
| shore wind farm. The final price was $4.3 billion. This tells
| you the value of green energy: it's so valuable that you
| could convince investors and banks to pony up the money.
|
| https://www.cnbc.com/2022/02/25/us-offshore-wind-auction-
| in-...
|
| So what are the auction prices for oil extraction?
|
| https://www.denverpost.com/2021/10/07/john-hickenlooper-
| oil-...
| cpleppert wrote:
| State commitments in New York and New Jersey mean that off-
| shore windfarms are guaranteed to be profitable. The cost
| of extraction doesn't equal the cost of the land or right
| to drill for oil.
| Animats wrote:
| _" overseas oil, even after shipping costs, is often cheaper
| than domestically-produced crude"_
|
| If that were really true, the US would not be able to export
| oil, which it does.
|
| There may still be a tax break for some imported oil. Saudi oil
| was taxed by Saudi Arabia, and this was tax-deductible for US
| buyers, even though ARAMCO is owned by the Saudi government and
| that "tax" is the government taxing itself. Not sure if this
| still applies.
|
| Some export is geography. Alaska has good access to Japan.
| There isn't enough pipeline capacity through the Sierras. Stuff
| like that.
|
| Not sure about the refinery argument. Here's a study made
| during the last oil glut, so the technology is the same but the
| economics are different.[1] (Start at page 7.) Refineries can
| crack heavy crude down to lighter fractions, but they don't
| have to. Turns out that's not the problem. The problem is
| getting out too many light fractions - propane, methane, butane
| - for which markets are limited. Some distillation columns
| can't handle too much of the light fractions. It's possible to
| add a reformer stage to combine light hydrocarbons down to at
| least the gasoline level, but most refineries don't have those.
| All those problems are solveable on a scale of five years.
|
| [1]
| https://www.eia.gov/analysis/studies/petroleum/morelto/pdf/l...
| encoderer wrote:
| It's a lot cheaper to pump oil in Alaska than to frack it in
| South Dakota.
|
| This is why a lot of fracking stopped in 2020 when gas prices
| plummeted. It just wasn't profitable anymore.
| john_moscow wrote:
| Price controls shift the pain point from the price to
| availability. USSR had planned economy and fixed prices for
| most merchandise, but you had to call in favors to "procure"
| many wanted items from buddies working near the supply lines,
| since officially they were practically always out of stock.
| Atlas667 wrote:
| That's a really nice summary of imperialism in the capitalist
| era. It really shows the need business has in economically
| dominating other countries in search of profit through the low
| production costs in other countries. The cost of production and
| of living (think poverty) is essential in the formula for
| generating capital.
|
| The reality of this article points out the contradictions
| inherent in capitalist economies.
|
| If there was a tariff how would that impact the rest of the
| economy. If anything it would only solidify the position of the
| already big enterprises who are the only ones able to withstand
| such a hike.
| nipponese wrote:
| Exactly this. The US could make iPhones too, but we import
| them. Unfortunately we don't have a "strategic iPhone
| manufacturing reserve", so we have to keep it cool with China.
| Atlas667 wrote:
| Apple could not make I Phones in the US. The cost of living
| is too high. Either you bring the cost of living down or you
| make technology incredibly more productive. Which in itself
| make the price of the product go down and generates less
| profits as a tendency. Think of the shareholders my man, what
| would they do without?
| actuator wrote:
| Apple has enough margins to make the phone in US. They make
| it outside to increase their profits.
| moonchrome wrote:
| Where have you been for the last two years? If it was
| just a matter of margins we wouldn't have world wide
| shortages of components, production lines shutting down,
| etc.
|
| Even with massive multibilion investments in fabs all
| over the place it's going to take years to bring up fab
| capacity - in the ideal case. And that's just for one
| component.
|
| Apple doesn't even do manufacturing anyway - they
| outsource every step of the way. What US alternatives are
| there to Samsung displays or Foxconn assembly ?
|
| Apple is too high up the chain to bring about this kind
| of change, best you could probably do is US assembly if
| you imposed India like tariffs. Not sure how the US
| consumers would feel about their iPhone jumping in price
| by 30%.
| actuator wrote:
| Systematic destruction of industrial capacity is not
| fixed in a single year.
|
| Even the outsourcing of capacity to PRC, didn't happen in
| a single year. It happened slowly motivated by margins,
| not due to some technical breakthroughs that were
| happening in PRC.
|
| > Apple doesn't even do manufacturing anyway - they
| outsource every step of the way.
|
| That's again a conscious choice because of margins. Apple
| used to manufacture stuff themselves in US.
|
| No one is saying Apple has to make display tech as well.
| Buying stuff from allies like SK, Japan and Taiwan
| shouldn't be an issue.
|
| > Not sure how the US consumers would feel about their
| iPhone jumping in price by 30%.
|
| Last I checked Apple had over 40% margins on their
| iPhone. If Apple shared the same concerns as their parent
| country, they wouldn't work to maximize their profits,
| even if it comes from labour working in inhumane
| conditions.
|
| The systematic destruction of US industrial capacity has
| been in chase of profits.
| ramraj07 wrote:
| Which market research document did you get this factoid
| from?
|
| Many have gone on record and said even if they wanted to
| make them here the engineer volume and expertise are
| nowhere to be found except in China now. The speed with
| which they can deploy factories for new processes in
| China is unprecedented. You can't match that here in the
| US. It's not apples mistake, it's the governments. And
| the people who vote for them. Which includes you if
| you're American (and sitting in a liberal state voting
| democrat doesn't count; if you care that much move to a
| swing state and vote there).
| actuator wrote:
| Adding to what the other commenter said. A lot of
| electronics manufacturing is automated. US is costly
| because of mainly cost of human labour, but a lot of
| component design is anyway happening in countries outside
| China where human labour is not cheap. Reducing reliance
| on PRC doesn't mean, doing everything at home.
|
| Take the example of processor, it is ARM, a British
| design company's spec followed by Apple, a US company to
| design their chip, which is made by TSMC, a Taiwanese
| company with equipments from ASML, a dutch company.
| bumby wrote:
| > _It's not apples mistake, it's the governments._
|
| Can you elaborate? From my vantage point, the impetus of
| this was globalization and there are many hands in that
| pot.
|
| Consumers like cheap goods. Manufacturers like cheap
| labor. Governments enact policies that effect both.
|
| The result is an outsourcing of manufacturing over the
| last four decades. It's odd to me that you give a company
| a pass but seem to blame constituents and governments,
| exclusively.
| jonas21 wrote:
| Governments make laws, and constituents vote to choose
| who is in the government. Companies can do neither.
|
| Any company that takes on much higher costs than its
| competitors without getting some benefit in return will
| not be able to stay in business for long.
|
| Now what benefits might you get by manufacturing in the
| US? Certainly, it could be good for marketing. And
| consumers, particularly those at the high end, might be
| willing to pay more for a product manufactured here.
| Apple has, in fact, tried to do this. Remember when they
| made a big deal about moving manufacturing of the Mac Pro
| to Texas in 2019 [1]? Unfortunately, this hasn't worked
| out as well as they'd hoped due to the expertise and
| supply chain issues that others have mentioned [2].
|
| [1] https://www.apple.com/newsroom/2019/09/apples-new-
| mac-pro-to...
|
| [2]
| https://www.bloomberg.com/news/features/2021-02-09/this-
| is-h...
| bumby wrote:
| You're acting like laws are the only decisions that
| matter. Laws constrain business decisions, sure, but they
| don't dictate them. In rare cases, they constrain them
| enough to effectively dictate them (like the Buy American
| Act) but those are relatively rare.
|
| > _Any company that takes on much higher costs than its
| competitors without getting some benefit in return will
| not be able to stay in business for long._
|
| This gets to my earlier point. Voting at the ballot and
| voting with your wallet are both ways to evaluate what
| people value. Both individual consumers and businesses
| vote with their wallets. Have you never paid more for
| something because it better aligns with your value
| system? Or do you strictly make purchases solely on the
| input of price?
|
| As I previously said, American consumers largely value
| cheap shit. Companies largely value profits. Both of
| these, taken to an extreme, can come at the expense of
| other things like economic stability or strategic
| independence. The difference is, I hold all three
| (individuals, companies, and governments) accountable for
| those choices. It just seems weird to me that so many
| people are willing to a subset of them to task while
| giving the other subset a free pass.
| [deleted]
| [deleted]
| nwiswell wrote:
| > Many have gone on record and said even if they wanted
| to make them here the engineer volume and expertise are
| nowhere to be found except in China now. The speed with
| which they can deploy factories for new processes in
| China is unprecedented. You can't match that here in the
| US.
|
| This is circular reasoning. We can't make them here
| because we don't.
|
| Yes, obviously it would take time to build capacity, but
| it's silly to argue China is fundamentally capable of
| something that the US is not. This is purely a question
| of cost (and, therefore, motivation).
|
| What should probably be countenanced, in my opinion, is
| "supply chain readiness": make _some_ of the iPhones
| domestically, so that if it becomes necessary, it is much
| faster to ramp domestic production. That hurts profits in
| the short term, but it probably does enhance long term
| expectation profits (conflict with China is less
| disastrous).
|
| Unfortunately Wall Street is notorious for its emphasis
| on the short term -- and that has next to nothing to do
| with politics.
| LordDragonfang wrote:
| >Unfortunately Wall Street is notorious for its emphasis
| on the short term -- and that has next to nothing to do
| with politics.
|
| While it may not originate from politicians, politics and
| corporate short-sightedness have been so tightly coupled
| since at least the Reagan admin that distinguishing the
| two is arguably missing the forest for the trees.
|
| But yes, the root problem is the people controlling the
| levers of Capital for short-sighted greed, as is often
| the case.
| stjohnswarts wrote:
| Crony capitalism and current US politics are deeply
| rooted into each other and feed and nourish one another.
| LordDragonfang wrote:
| Blaming "crony" capitalism implies the issue is too much
| regulation, not too little. Since I'm asserting that most
| of the issues stem from the period of deregulation
| following Reagan, that's clearly at very different
| conclusion.
|
| Short-sighted pursuit of profit is a failure mode
| inherent in capitalism in general, no cronyism required.
| nebula8804 wrote:
| We don't make iPhones but there is this smart phone being
| made here.
|
| https://puri.sm/products/librem-5-usa/
|
| It is like 1000$ more expensive than the China version of
| the same phone. Could Apple and their volume get their
| price down? Probably but it is still going to be
| significantly more expensive.
|
| If the US was desperate, we could maybe switch to this
| phone in an emergency?
| brimble wrote:
| > Which market research document did you get this factoid
| from?
|
| Tip of the hat for a rare correct use of the word
| "factoid".
| dragonelite wrote:
| It will probably take multiple build back better budgets
| to restructure US infrastructure and industrial base to
| get the ball rolling.
| stjohnswarts wrote:
| At their current level of production? Nope, US doesn't have
| the capacity. Give it 3 or 4 years, probably, at an
| elevated cost.
| eloff wrote:
| It's less about cost of living and more about the fact that
| all the expertise and parts all the way through the supply
| chain are in Asia. Bringing that industry to the US
| requires bringing many of the supporting industries too.
| It's no simple task and probably won't happen at this
| point.
| landemva wrote:
| People expertise can be hired. That doesn't overcome the
| pollution allowances other countries have. It's cheaper
| and easier to pollute over there.
| landemva wrote:
| >>> "overseas oil, even after shipping costs, is often cheaper
| than domestically-produced crude"
|
| >>>This is all you need to know.
|
| And the Jones Act which makes it cost-prohibitive to ship
| between US ports. https://www.law.cornell.edu/wex/jones_act
| WheatM wrote:
| cryptonector wrote:
| Price controls have never worked, and never will work, because
| they cannot work.
| tombert wrote:
| Sorry, do you have a citation for this? I know price controls
| are generally not liked by economists but I don't know that
| any have said flatout that they will _never_ work.
| kajecounterhack wrote:
| +1 in fact there are situations that definitely call for
| price controls. For example wartime price ceilings to
| prevent gouging. Or COVID vaccine pricing. Price controls
| work in these cases if companies have some reason (e.g.
| governmental mandate) to not seek the highest price.
| Successful deployment of price controls just have to come
| with a host of other policies to mitigate downsides. For
| example, if you enact a price ceiling, you get shortages.
| You deal with it by employing things like triaged
| distribution (e.g. early COVID vaccines go to medical
| professionals, N95 masks go to hospitals, etc, gas gets
| rationed with much of it going to the military in wartime).
| cryptonector wrote:
| Wartime price controls don't help the consumer -- they
| help the government keep the consumer from consuming
| goods and services needed for the war effort, and they do
| so by discouraging consumption.
|
| There is always a sense in which price controls work.
| It's just never the actual publicly ostensible sense.
| Prices are too high! -consumers Ok, we'll
| set a price ceiling -government Yayayayay!
| -consumers Hey wait a minute! Supply has
| vanished! -consumers <crickets> -government
| kajecounterhack wrote:
| You before this comment:
|
| > Price controls have never worked, and never will work,
| because they cannot work.
|
| You after this comment:
|
| > There is always a sense in which price controls work.
|
| That's all I was trying to get at. We agree they work. If
| you know what effects they're going to have, and they
| match your intentions, then they work. If you know the
| general populace will have a shortage of N95 masks but
| hospital workers will be getting every mask produced in
| the country at a reasonable price, then it works. If your
| state has a cold snap and your citizens don't see $100k
| bills for a few hours of power (even though many folks
| will experience blackouts), then it works.
|
| FWIW black and white statements like "price controls
| never work" ring of a certain "rah-rah unfettered
| capitalism is always the answer" mentality that lacks
| nuance. Just because you've taken some macroeconomic
| classes doesn't mean that how things work is all that
| simple.
| cryptonector wrote:
| It's no contradiction. Price controls do not work for the
| purpose that is generally given for them. The stated
| purpose is generally to reduce prices seen by consumers,
| or to subsidize producers of some particular
| good/service. It's extremely rare that the stated purpose
| is "to stop consumption of the product in question"!
| kajecounterhack wrote:
| > Price controls do not work for the purpose that is
| generally given for them.
|
| > stated purpose is generally to reduce prices seen by
| consumers, or to subsidize producers of some particular
| good/service
|
| I thought I gave examples that fell outside of this?
|
| * Wartime/Emergency: stated purpose is to shift supply
| toward military/medical uses. Shortages and black markets
| are acceptable negative side effects.
|
| * Energy: protect citizens from gouging in time of
| crisis. Lack of price controls did not prevent blackouts
| to Texans in the US last year. It did cause many folks to
| be saddled with insane bills.
|
| You can also implement rationing to further mitigate
| imbalances. So price may be low, but you can only buy 1
| per day, or something like that.
| cryptonector wrote:
| > You can also implement rationing to further mitigate
| imbalances. So price may be low, but you can only buy 1
| per day, or something like that.
|
| Generally it goes the other way around. First government
| imposes price controls, which cause scarcity. Then they
| impose rationing.
|
| > Lack of price controls did not prevent blackouts to
| Texans in the US last year. It did cause many folks to be
| saddled with insane bills.
|
| Price controls are not the only way you get to end up
| with limited supply, that's true, and that situation was
| temporary, also true, and there was no rationing (some
| areas did not lose power because they were "privileged")
| while all others did lose power. The people who were
| "saddled with insane bills" were those who had a
| specialty spot-price utility.
|
| > Wartime/Emergency: stated purpose is to shift supply
| toward military/medical uses. Shortages and black markets
| are acceptable negative side effects.
|
| I acknowledge the wartime thing, but that is quite
| exceptional. We've had lots of price controls during
| peace time here and all over the world, and they have
| never worked for their ostensible reasons. When was the
| last time we had wartime price controls in the U.S.? Not
| since WWII.
| tombert wrote:
| > Generally it goes the other way around. First
| government imposes price controls, which cause scarcity.
| Then they impose rationing.
|
| So if price controls + rationing were implemented at the
| same time, you think it could work to avoid scarcity? If
| not then why even bring up the order in which things are
| implemented?
| kajecounterhack wrote:
| +1 this is my point, you can frequently implement
| multiple overlapping policies whose combined effect is
| better than an individual policy. Order doesn't matter.
|
| When you say "price controls don't work" you lack
| imagination for the space of possible policy problems and
| solutions. Sometimes price controls will be a useful part
| of a policy solution and likely more often than some
| randos on the internet can think of off the top of their
| heads. In general I would not bet on the idea that
| "mechanism X is shit because it's not the free market."
| Our societies have implemented many engineered economic
| mechanisms, some of which are easy scapegoats because
| they fail, but many of which are overlooked because they
| work quietly in the background.
| cryptonector wrote:
| > Sorry, do you have a citation for this?
|
| How about every standard economics class you can find at a
| reasonable school? This is covered in high school and
| university economics courses. Oh, it's not usually stated
| as "price controls don't work", but it's covered.
|
| It's quite simple: forcing the price of some good while
| allowing supply and demand to adjust accordingly
| necessarily causes them to adjust accordingly. Set prices
| too low and supply shrivels, leading to shortages. Set
| prices too high and demand falls off and searches for
| substitutes.
|
| The ostensible goal of price controls is always just that:
| to set the price of some good so as to alleviate the burden
| on some class of people (either the producers or the
| consumers, depending on whether the price is set too high
| or too low).
|
| The actual goal of price controls, if it's anything other
| than propaganda value ("look! we care about you! we're
| doing something you want!"), does get met. So in that sense
| price controls _may_ work, of course, if the target of the
| propaganda is too dumb to understand they 've been had or
| if they have no way to reject proposed price controls. But
| that's not the sense people want -- every consumer wants
| lower prices, and every producer wants bigger profits
| (which often, but not always, means higher prices).
|
| All that said, you _can_ make price controls work. Like, if
| you enslave some people (generally that would be
| _producers_ , when you want to set an artificially low
| price on some good or service). Or maybe if automation
| reaches such levels that marginal costs are zero for most
| goods in most goods baskets -- I'm not sure if this has
| been studied.
| majormajor wrote:
| Generally it's not a great idea to rely on high school or
| entry-level university courses as the final word on
| anything... for starters, what about situations where the
| price is already distorted by bad actors fucking with the
| supply levels, such as cartel or monopolist situations?
|
| You've been replying to questions about specific
| situations with generalities! That's not compelling.
|
| Hell, oil was at $100+ a barrel for years within the past
| decade, without the same level of gasoline prices seen
| today in the US: that suggests there's more to the
| current situation then just econ-101 "high input prices
| mean output price has to be high too".
| tombert wrote:
| I took high school and university economics, and they
| talked about rent controls and a few other price
| controls, and I agree that _generally_ they probably aren
| 't a good idea, but they _never_ said that they could
| _never_ work in those classes. Maybe I just went to a
| shitty school (Florida State University) but it wasn 't a
| diploma mill or anything.
|
| That said, your big rant isn't a citation, and saying
| "LOL IT'S IN YOUR HIGH SCHOOL CLASS YOU GOOFBALL" doesn't
| really count. I'm looking for one prominent economist
| that has stated the price controls can _never_ work.
| edmundsauto wrote:
| Why do manufacturers sometimes set retail pricing, aren't
| those price controls? AIUI, some products have minimum
| contractual prices that retailers have to sell for.
|
| I'm not an economist, and I tend to see economics "laws"
| more akin to social science than physics. Ie, economists
| describe plausible mechanisms and principles, but they
| are not very useful to make predictions.
| jsmith99 wrote:
| Manufacturers are not interest in maximising their social
| benefit: they want to maximise their profit and this is
| done by producing fewer items but at a higher price (to
| be technical, a monopoly would produce until marginal
| revenue = marginal cost).
|
| Manufacturers can set recommended retail prices but their
| are limitations to how these can be enforced.
| s1artibartfast wrote:
| They absolutely work, but they just have significant costs
| and drawbacks.
| cryptonector wrote:
| Oh, for some value of $work that doesn't involve their
| ostensible reason, yes.
| marcosdumay wrote:
| During a shock, when there exists sufficient productive
| capacity, price control together with forced production
| (as on fines for stopping it or worse) do really work.
|
| For obvious reasons (and very good ones), this is
| something people won't accept unless the shock is really
| serious, like a war. Anyway, there isn't sufficient
| productive capacity either, so the shock importance is a
| moot point.
| jsmith99 wrote:
| During a shock is exactly when price controls are most
| destructive as they prevent an efficient allocation of
| the scarce supply to those with the greatest need
| (assuming willingness to pay is a proxy for that).
| marcosdumay wrote:
| > assuming willingness to pay is a proxy for that
|
| Hum... Does that assumption ever hold?
|
| Willingness to pay is a proxy for your early earnings and
| ROI. It correlates very weekly to anything else.
| cryptonector wrote:
| > together with forced production
|
| a.k.a. slavery
|
| > For obvious reasons (and very good ones), this is
| something people won't accept unless the shock is really
| serious, like a war.
|
| No kidding.
|
| But again, it depends on what the goal of the price
| control is. In a war the goal is not to make life easier
| for the consumer -- the goal in that case is to get the
| consumer to stop consuming what the war machine needs for
| itself.
| marcosdumay wrote:
| > a.k.a. slavery
|
| On the case of war, conscription. It's disturbingly
| similar, but it's different. In peace times it's usually
| on the lines of "keep producing or your business will be
| closed", what is not that similar as the working people
| are not the ones facing the ultimatum (if it's ever done
| to a small company, then yes, it's like slavery).
|
| > In a war the goal is not to make life easier for the
| consumer -- the goal in that case is to get the consumer
| to stop consuming what the war machine needs for itself.
|
| Economies are large complicated beasts that move all
| kinds of products. When governments intervene, they do it
| in more than one way and with more than one goal.
|
| Price fixing also goes with rationing so that the
| population stays fed.
| cryptonector wrote:
| > > a.k.a. slavery
|
| > On the case of war, conscription.
|
| That works for getting labor for the military. It doesn't
| work for getting producers of things to produce more for
| less -- unless you put a gun to their heads, they won't
| do it, not even during war time.
| not2b wrote:
| Counterexample: WW2, where most of US industrial capacity
| was repurposed to win the war. Producers got paid, but
| the amounts they got were limited. They didn't get to
| just name their price.
| cryptonector wrote:
| They got paid more than their input costs. None were
| forced to go bankrupt, and most made a profit.
| s1artibartfast wrote:
| That depends on the claimed reason.
|
| Price floors can work very well at reducing consumption.
| cryptonector wrote:
| Price ceilings also have a way of doing that (by limiting
| production, which therefore limits consumption).
| s1artibartfast wrote:
| I totally agree, it also works for limiting sales of
| existing goods.
|
| If you put a price ceiling of $1 on paintings, owners
| will hold and not sell.
|
| If you want to kill the market for paintings, this would
| be very effective at doing so.
|
| You can imagine similar impacts of price floors or
| ceilings for real goods like land and housing.
| jsmith99 wrote:
| Generally, supporters of price controls see them as a way
| to reallocate wealth from producers to consumers.
| Economists point out that manipulating the market price
| distorts the market by reducing producers' incentive to
| supply and increasing consumers' incentive to consume,
| leading to a less efficient outcome.
| bwestergard wrote:
| Person who has never taken an econ course: "Price controls
| are great!"
|
| Person who has taken an undergraduate econ course only:
| "Price controls are terrible!"
|
| Mathematical economists: "Price controls are bad by
| definition, under highly restrictive assumptions about human
| welfare."
|
| Economists who study the actual history of price controls:
| "It varies and depends."
|
| Regarding the last view, Isabella Weber has done some
| interesting work: https://twitter.com/IsabellaMWeber
| snowwrestler wrote:
| Energy independence does not mean "only uses domestically
| produced energy." It means "energy is not a significant lever
| that other nations have over us."
|
| And that is true for the U.S. today. We could meet our domestic
| fossil fuel energy needs, but we find economic advantage in
| trading energy anyway. But when we want to use energy as a tool
| of policy, we have the option.
|
| This happens in personal finance too. I can pay off my
| mortgage: I have enough capital to do so. So I don't fear the
| bank. But with mortgage interest rates so low, I've found
| comparative advantage by keeping my mortgage and investing my
| capital elsewhere.
| stjohnswarts wrote:
| Exactly, trade tends to build trust and good relations (or at
| least respectful relations) so it's a good Net-Net thing.
| However, if in stressful times like war the government can
| pretty easily enact tariffs and even dictates that all
| domestic production stays here. That is of course for only
| emergency conditions.
| dmingod666 wrote:
| Correct, with exception of arms trade, which finds a way to
| generate conflict to keep the demand going.
| mfer wrote:
| That isn't all you need to know from the article. That's about
| the amount that fits into a tweet and lacks a lot more context.
|
| For example, the different types of oil and the way US
| refineries are setup. That's useful context to know more about
| the situation.
| jhallenworld wrote:
| Of course the details are more involved, but the refiners
| will modify their plants to optimize profits on their own.
| The time-frame involved could be an issue for sure. What kind
| of oil is in the Strategic Petroleum Reserve? It could
| possibly help with the time issue.
|
| The tweet-sized post is useful as a counter to the oil
| company talking points. They like banning Russian imports
| (eliminating a competitor), but want to link it to expanded
| drilling and the reinstatement of Keystone XL. Both of these
| also take time. Yet they say that they can immediately
| increase production, so I'm not sure the rush for their other
| requests.
| phendrenad2 wrote:
| That only makes sense if you're looking at a snapshot in time
| and try to make sense of it. It's too simplistic to explain
| this situation if it persists over time. Which, well, it's too
| early to tell. US domestic oil production ha so only matched
| import volume for the first time ever in 2020[1]. I expect that
| if the US keeps production high, eventually the cost of
| domestic production will reach an equilibrium and the benefit
| of locality and less transport costs will force the US to use
| its own oil.
|
| [1] -
| https://upload.wikimedia.org/wikipedia/commons/6/6d/US_oil_p...
| dlp211 wrote:
| A lot of oil produced in the US cannot be used in the US.
| It's too dirty and so gets shipped to countries with less
| environmental protections in place.
| ggreer wrote:
| Price controls are almost always a terrible idea. Economists
| agree on this as much as dentists agree that sugared gum is bad
| for your teeth. If the price of a good increases, several
| things happen:
|
| - People reduce their consumption of that good.
|
| - People find substitutes.
|
| - People with stockpiles of the good sell it. If price controls
| were in effect, they would hoard it instead.
|
| - On a longer time scale, people start producing more of the
| good. They pay workers overtime to work more shifts, buy/build
| more equipment, and so on.
|
| Economist Michael Munger wrote an article titled _They Clapped:
| Can Price-Gouging Laws Prohibit Scarcity?_ which explains the
| problems with price controls, even in times of disaster.[1]
|
| 1.
| https://www.econlib.org/library/Columns/y2007/Mungergouging....
| forty wrote:
| For energy, it's hard for people to either hoard it, find
| substitute, or producing more of the good. Reducing
| consumption is possible only to a limit (when you start
| freezing and getting sick).
| davidw wrote:
| Short term, it's a problem in the US, but long term, we
| have a lot of ways to trim some fat. Like those gigantic,
| deadly trucks that get used to ferry a kid to school or a
| dad to the office. Or re-legalize things like corner stores
| so people can walk or bike to do some of what they need on
| a day to day basis.
| forty wrote:
| True :) that said upgrading to cleanest cars requires to
| build new car, which apparently requires some metals
| Russia has too... What a mess.
|
| Are corner stores really illegal in the US? I could not
| find anything on the topic from a quick search
| mcbits wrote:
| It's not as if corner stores are banned, but zoning
| restrictions have that effect in many places.
| [deleted]
| gowld wrote:
| Tariffs are not price controls. They are taxes on implicit
| behaviors (like "price controls" (wage suppression) in other
| countries).
| roflchoppa wrote:
| It's simple, "I drink your milkshake, I drink it up."
| oversocialized wrote:
| jhoechtl wrote:
| To outsource the devastation of landscape?
| jeffreyrogers wrote:
| "Oil" isn't one product. It differs widely in chemical and
| physical properties (viscosity, how much sulfur and arsenic is
| present, etc.) depending on how/where it was produced. Different
| refineries are setup to refine different grades of oil and the
| oil is often blended before shipment to meet the specs the
| refineries expect. It is often cheaper for the US to import the
| right grade of oil than it would be to reconfigure the domestic
| refineries to process all the domestically produced oil.
|
| This is also why there are several oil "prices" that you will see
| quoted, the most common two being WTI and Brent.
| selectodude wrote:
| A good example of this is how extremely light, sweet Saharan
| Blend is $25 more per barrel than Canadian tar sand.
| gorgoiler wrote:
| Thanks for the insight -- very interesting.
|
| Are there physical properties that make these different oils
| look different? Would I be able to tell them apart if they were
| in jars, in front of me?
| opwieurposiu wrote:
| Yes. The color and the smell vary a lot. Venezuela and Canada
| sell a heavy crude that is basically roofing tar. Some spots
| in west Texas and Malaysia produce something close enough to
| diesel to just put in your truck and go with no refining.
|
| https://kimray.com/training/types-crude-oil-heavy-vs-
| light-s...
| karaterobot wrote:
| This is a good summary of the article.
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