$7/gallon gas is coming
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
God, you DCUM office workers are completely overeducated but know nothing of value in the real world. Drilling for oil is not an on/off switch. Drillers can lose substantial amounts of money if they get fooled by market head fakes, which is why they only conservatively increase production even while oil prices rise because they can get burned if there's a downturn in demand. It takes 3 months to begin to drill a new rig. If a company tries to start gearing up to go after more oil today, it won't be able to produce actual supplies of oil until 9-12 months later. Where will oil be 12 months from now, do you know? Drillers also face out of control inflation. Companies now have to pay upwards of 15-20% more for rigs than they used to just a little while ago. No one is going to drill for oil if it isn't profitable due to inflation eating away at producer margins. The futures market also shows the threat of super backwardation - where oil may significantly dropoff over the coming year. Why would a producer produce more if there's a serious threat that prices will rapidly retreat over the next year? |
Anonymous
OK, so what's your solution? "MOAR LEASES" doesn't solve anything. Just admit what you want: the taxpayer teat. |
Anonymous
Perhaps, but I could also see this going the other way if Alaskan drilling/Pipeline/etc is all released under Biden and a democratic White House and Congress, under an "Energy Independence" ideology. If he's smart, Biden should do exactly that and pull the rug from under the Republicans' feet. It's exactly what they've been fighting for all along, and they'll just have to bite their tongue when Democrats get the credit. The left-wing and environmentalists will be furious, but with a looming world crisis, they'll take a back seat. Or they should. - Environmentalist, but not at the expense of geopolitics. |
Anonymous
NP - simple, less regulatory burden on the oil companies is better than MOAR leases. We were completely energy independent starting in 2018 through 2020... there was a reason why and it just wasn't the leases. Biden is trying to please his left flank and reports say Biden is considering a trip to Saudi Arabia to personal plead for more oil for the west. |
Anonymous
|
The existing leases are a head fake. Oil is not a widget and standardization comes at the refinery. Economics are impacted by numerous factors and you have limited insight into the viability of any particular lease.
The real problem is that drilling oil wells is capital intensive with the vast majority of the investment in an upfront cost. An oil well will produce for up to 30 years. Hard to justify spending money today on a project that has a 30 year payback period when everybody knows that many don’t want your product to exist in 30 years. |
Anonymous
That would be true regardless. But, I'm ok with it. I'd rather the GOP have to take the hits that will be coming. And I'd rather have the GOP in a position where irresponsible rock-throwing is not in their best interest. I think a GOP take-over of the Congress will be the best thing that could happen to the Democrats. And the Ukrainian people too. |
Anonymous
Lol why the collapse in 2020? I’ll wait…. It all comes back to oil industry suckling at the tax payer teat, like good little piggies. If that happens, I want the federal government to take an equity interest. Pump by teat, pay the teat. You know that what you want. Why can’t you admit it? You’re not a capitalist. |
Anonymous
You are not an environmentalist if you don’t advocate for renewable energy sources. Geopolitics follows climate, not vice versa. That has been the case for all of human history. |
Anonymous
Obama proved that we can do both at the same time. His “All of the Above” energy policy was very successful, laying the ground work for the EV industry and seeing the fruits of the shale revolution. O&G lobbyists see an advantage in setting up this narrative that you must pick one or the other. But this isn’t true at all. |
Anonymous
| I think we are a few gas cost hikes away from some Democrat proposing a "rescue plan" for the American people to fund fuel for the vehicles and homes. |
Anonymous
Sure ok but I find it so difficult to be sympathetic 'Oh no, my billion dollar profit is going to decrease by a whole million dollars. We are ruined! Our children will starve!" |
Anonymous
PP you replied to. That was so obvious I didn't think it needed to be said! But I recognize that investing in renewables isn't going to lower price at the pump this year. As others have pointed out, oil prices are partly driven by expectations. We need to kill the Russian economy. It is entirely dependent on oil and gas exports. One easy gesture is to declare we won't buy their energy, and makes noises in the right direction for domestic drilling and the Canadian pipeline (which we needed anyway regardless). Win-win. The real problem isn't for the US, it's for Europe. We use very little Russian oil. Some European countries are extremely dependent on Russian oil and gas. We need to help them. There's a stealth deal trying to happen between Iran and Europe. We cannot stand in the way. We're reaching out to Venezuela. We're playing nice with MBS in Saudi Arabia (vomit, but it's for the cause). Can Europe make up its oil and gas needs from elsewhere without driving up prices to politically non-viable levels??? That is the question. Russia is like a pitbull that won't open its jaws off Ukraine. All the sticks and stones won't make it budge. What it needs is a bullet to the head, and that comes when Europe, which is Russia's largest client by far, refuses to buy. |