Chill, Baby, Chill

http://content.usatoday.com/communities/ondeadline/post/2012/03/analysis-more-drilling-doesnt-lower-gasoline-prices/1

Analyzing 36 years of gasoline prices and U.S. oil production, the Associated Press finds no statistical correlation between how much is pumped out of the ground and how much is paid at the pump.

AP says four independent statisticians came to the same conclusion.

[...]

As one energy economist put it: "Drill, baby, drill has nothing to do with it."

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If only the national dialogue would move beyond "drill, baby, drill"...

Originally posted by wittywonka
http://content.usatoday.com/communities/ondeadline/post/2012/03/analysis-more-drilling-doesnt-lower-gasoline-prices/1

Analyzing 36 years of gasoline prices and U.S. oil production, the Associated Press finds no statistical correlation between how much is pumped out of the ground and how much is paid at the pump.

AP says four independent statistic h it."

___

If only the national dialogue would move beyond "drill, baby, drill"...

Originally posted by sh76
Other effects may overshadow the effect of increased or decreased drilling in the short run, but it's inconceivable that producing more vs. less oil does not affect oil prices in the long run; unless you'd like to repeal the law of supply and demand.

Originally posted by sh76
Other effects may overshadow the effect of increased or decreased drilling in the short run, but it's inconceivable that producing more vs. less oil does not affect oil prices in the long run; unless you'd like to repeal the law of supply and demand.

Originally posted by PsychoPawn
The problem is that the US production from drilling just isn't enough to drive down the price - which is set by the global market.

That doesn't violate the law of supply and demand, it just says that we may not have the ability to increase our production enough to actually push the price down enough to get over the other factors.

Originally posted by sh76
At full production including drilling offshore, in the ANWAR, fracking, etc., we could probably get close to producing 100% of our oil needs.

Originally posted by sh76
Other effects may overshadow the effect of increased or decreased drilling in the short run, but it's inconceivable that producing more vs. less oil does not affect oil prices in the long run; unless you'd like to repeal the law of supply and demand.

Originally posted by sh76
At full production including drilling offshore, in the ANWAR, fracking, etc., we could probably get close to producing 100% of our oil needs. We could absolutely get ourselves to the point that we no longer need to import a drop of oil from any OPEC country. Keep in mind that we import more oil from Canada than from any other country.

Now, I'm not saying tha ...[text shortened]... ood idea. However, it defies logic to argue that these steps would not affect the price of oil.

Originally posted by moon1969
Please provide a reference. That is not true. We could never even come close to producing the oil we demand. And any increases in domestic production have a miniscule or insignicant substantive effect on supply and pricing.

Across the country, the oil and gas industry is vastly increasing production, reversing two decades of decline. Using new technology and spurred by rising oil prices since the mid-2000s, the industry is extracting millions of barrels more a week, from the deepest waters of the Gulf of Mexico to the prairies of North Dakota.

At the same time, Americans are pumping significantly less gasoline. While that is partly a result of the recession and higher gasoline prices, people are also driving fewer miles and replacing older cars with more fuel-efficient vehicles at a greater clip, federal data show.

Taken together, the increasing production and declining consumption have unexpectedly brought the United States markedly closer to a goal that has tantalized presidents since Richard Nixon: independence from foreign energy sources, a milestone that could reconfigure American foreign policy, the economy and more. In 2011, the country imported just 45 percent of the liquid fuels it used, down from a record high of 60 percent in 2005.

the United States has reduced oil imports from members of the Organization of the Petroleum Exporting Countries by more than 20 percent in the last three years

EIA: Offshore Areas Protected From Drilling "Are Estimated To Hold Roughly 20 Percent" Of Total Offshore Oil Resources. While noting that the estimates are subject to uncertainty, EIA stated in its 2009 Annual Energy Outlook that the offshore areas that have been restricted are estimated to hold around 20 percent of total technically recoverable offshore oil

I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy.

To understand why, you have to consider that even before the shale discoveries, natural gas was destined to play a big role in our future. As environmental concerns have grown, nations have leaned more heavily on the fuel, which gives off just half the carbon dioxide of coal. But the rise of gas power seemed likely to doom the world's consumers to a repeat of OPEC, with gas producers like Russia, Iran and Venezuela coming together in a cartel and dictating terms to the rest of the world.

The advent of abundant, low-cost gas will throw all that out the window—so long as the recent drilling catastrophe doesn't curtail offshore oil and gas activity and push up the price of oil and eventually other forms of energy. Not only will the shale discoveries prevent a cartel from forming, but the petro-states will lose lots of the muscle they now have in world affairs, as customers over time cut them loose and turn to cheap fuel produced closer to home.

ACCORDING to the current storyline regarding this fall’s presidential election, Barack Obama has jumped out of the frying pan of a weak economy into the fire of skyrocketing gas prices, a spike driven largely by tensions in the Persian Gulf. Like President Carter before him, Mr. Obama supposedly risks losing an election over something he can’t control.

Fortunately for the president — and millions of American drivers — he may have more energy options than most of his recent predecessors.

Thanks in part to surging oil imports from our continental neighbors, Persian Gulf oil now constitutes a significantly smaller share of American oil imports than it did just 20 years ago. At the same time, domestic oil production is actually increasing after decades of decline, meaning we have to import less than before.

Taken together, these trends suggest that the oil weapon, at least in the hands of Persian Gulf producers, may no longer have the same edge for the United States.

According to the Energy Information Administration, in 2010 some 49 percent of American crude oil and petroleum product imports came from the Western Hemisphere — about 25 percent of that from Canada alone, making it our single largest supplier. (Other substantial hemispheric oil suppliers include Mexico, Venezuela, Colombia, Ecuador and Brazil.) In contrast, the Persian Gulf states provided only 18 percent of our oil imports in 2010, down from 27 percent as recently as 1993.

More surprising, though, is that we’re importing a smaller share of our oil needs. In 2005, America imported 60 percent of the oil we consumed. By 2011, that number had shrunk to less than half of our total oil consumption, due mainly to new domestic production from unconventional sources in North Dakota and enhanced recovery from older wells in Texas.

etc.

Originally posted by moon1969
Distribution on both crude and refined gasoline can be big time bottlenecks. Getting oil out of the ground is not enough with regard to gasoline prices, especially in view our too-low capacity/antiquated pipelines, storage, and refineries, much of which was built duirng WWII or right after WWII.

Originally posted by sh76
Those are infrastructure improvements that could be built.

So perhaps the expression should be:

"Drill and make distribution and refinery infrastructure improvements, baby, Drill and make distribution and refinery infrastructure improvements!"

but somehow I don't think that has the same crisp ring to it.

Originally posted by sh76
Those are infrastructure improvements that could be built.

So perhaps the expression should be:

"Drill and make distribution and refinery infrastructure improvements, baby, Drill and make distribution and refinery infrastructure improvements!"

but somehow I don't think that has the same crisp ring to it.

Originally posted by sh76
Perhaps I spoke imprecisely. What I meant to say is that we could produce all that we need without OPEC.

Right now, from this chart, it appears that less than 40% of our oil imports come from OPEC countries.

ftp://ftp.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

[quote]Across the country, the oil and gas ...[text shortened]... e), we could easily produce enough oil to make OPEC irrelevant as far as we're concerned.

Originally posted by moon1969
Thanks for the info. Interesting.