DRILL BABY DRILL

Remember that chant during a political campaign a few elections back; a favorite of Sara Palin urging less regulations so it would pay many of the inactive oil wells to reopen along with opening a new pipe line from Canada through the US and gasoline prices would drop dramatically.
Well, all that has happened; the US is drilling and producing enough oil to make us non-dependent upon foreign oil and guess what?
Gasoline prices are still high; yesterday alone gas prices in the area rose 8 cents.
GOD Bless America!

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10 thoughts on “DRILL BABY DRILL

  1. Let’s try to keep this simple. US oil production has increased, substantially, mostly due to the shale oil boom. A ban on exporting crude oil was put in place in the 70’s, so most of the surplus production ends up in storage awaiting sale to US refiners. Refined products have no such ban and can be exported into global demand. Global oil production, and the resulting refined products, are priced based on Brent. Our own WTI/Cushing/LLS oil is currently runs $6 to $15 per barrel lower in price. US Refiners are making a killing on the arbitrage, buying lower priced US oil, refining it, and selling it into a global market priced on a higher oil input cost. We are currently exporting about 3 million barrels of refined product daily, three times more than we did eight years ago. Our Energy Secretary has publicly stated the oil export ban is outdated, and of course the oil producers are lobbying to for its elimination. Eliminating it would simply shift the export profits from US refiners to producers, but would not likely change the cost of gas to end users. We live in a global economy, like it or not.

    The oil we produced has not always enjoyed a lower price. Until recently, US oil traded at a premium to Brent as its a higher quality product, cheaper to refine. The pipeline increase was supposed to reduce the US oil costs, dropping prices in the US. It did succeed in helping lower prices, but, instead of lower prices to US consumers it has simply made refiners more profitable as, noted above, the end product is sold in a global market.

    Here’s the catch. A typical new Bakkan shale oil well looses roughly 70% of its production capability in the FIRST YEAR and over 80% by the end of the second year. Without a major annual investment in new wells, and the producing land to put them on, production will flatline and eventually fall. Shell is already pulling out saying production costs are too high and extraction rates are too low. All booms end in a bust.

    • Definitely the problem is the Obama Administration. And we can also blame them for the the rising energy costs. Natural gas because of the restrictions and regulations on acquiring and electrical because they are forcing power companies to convert from coal to natural gas as a fuel source. P.S. How does Becky feel about the EPA’s impact on the coal industry in WVA?

    • CNBC=MSM=Propaganda=Worthless. Also, the article you posted is almost a year old.

      Funny they don’t mention QE’s affects on the dollar, zero bound interest rates and its affect on yield, tax increases, increased governmental interference costs to corporations or any of the other myriad of factors that go into pricing oil.

      Refineries are always selectively shutting down for maintenance, its part of the cycle and futures traders have been around since time began.

      • @bob- this is one of frank’s liberal cohorts that can only be proud of david, at the risk of being kicked out of the liberal society. lol
        sorry david.

  2. Blame them for what? We are producing more oil today than before. That’s what everybody wanted, right? Do you expect oil companies and refineries to not take advantage of global market opportunities while they last?

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