Editorial: A foreign oil ban would help fuel NM economies by the Albuquerque Journal Editorial Board
"It makes the push to restrict crude imports from overseas worth very serious consideration. Because OPEC gas at less than two bucks a gallon makes filling up a dream for drivers but a nightmare for just about everyone else."
The full article is here-> http://www.abqjournal.com/805164/a-foreign-oil-ban-would-help-fuel-...
"Welcome to the distinct downside of cheap oil.
While drivers enjoy prices south of two bucks a gallon at the pump, U.S. oil producers are in crisis, with production slipping and new drilling at a virtual standstill. That’s because the Organization of Petroleum Exporting Countries has spent months flooding the market to drive prices down and cut off attempts at American energy independence.
That “price war has resulted in an OPEC-Saudi Arabia victory without question,” according to Daniel Fine, associate director of the New Mexico Center for Energy Policy at the New Mexico Institute of Mining and Technology and a former research associate at the Massachusetts Institute of Technology. “Southwest U.S. production has hit bottom.”
Most drivers would likely be shocked to learn that around 50 percent of the gasoline they pump comes from the Middle East. New Mexico and West Texas producers say the only option is to change the battlefield and ban foreign oil imports except from Canada and Mexico. They hope to make a regional movement a national one.
In southeastern New Mexico, the current system of cheap OPEC oil means drill rigs in the field have dropped from 104 in late 2014 to about 20 today. That, in turn, means fewer jobs – jobs in drilling, fracking and well maintenance. Fewer jobs in real estate and construction. Fewer jobs in service industries. It means fewer hours and lower salaries for the jobs that struggle to survive, because it also means more business closures and bankruptcies.
In real-life numbers, it means at least 6,000 people who were employed aren’t any longer – make that 12,000 to 18,000 if you count all the non-drilling jobs that dried up as the drilling did. In Lea County alone, the unemployment rate jumped from 5.9 percent in May 2015 to 8.7 percent May this year.
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Replies to This Discussion
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Permalink Reply by Barry D on -
Banning Saudi oil (or any foreign oil) wouldn't change a thing.
Oil is a priced on a worldwide basis, not just nationally.
We import so little oil from Saudi Arabia that banning it would not affect prices here.
Most of our imported oil already comes from Canada and Mexico.
The negative effect, with very little positive effect, would be to ignite a trade war with other oil producing countries. For a little history lesson on how for trade bans work I suggest researching Smoot-Hawley and the other trade tariffs from the 1930's. Those tariffs and bans turned a recession into a depression by igniting a world wide trade war that killed the agriculture industry, and others, in this country.
The true reason for the low price of oil is lack of demand. The economies of the world are in a recession (just as the economies of the world were in 1929-1930). This is particularly true of the economy of China.
Sadly one misery of one person may be the joy to another. Lower energy costs have benefited many Americans. Understand, that I say this with regret as many of my oilfield brethren struggle with unemployment and keeping their lives together.
I find it interesting that you hear nothing from the President or HilLIARy about the plight of the unemployed oilfield workers. Yet they are willing to propose all manner of new FREE programs for people who have never worked a day in their lives.
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