When the price of oil drops, so does the cost of gasoline. But while people are enjoying paying lower prices at gasoline pumps, plunges in oil prices can cause economic damage in Texas.
And it can put American oil producers out of business when the price of foreign oil imports gets cheaper than the costs of extracting oil from the ground in the U.S.
Oil producers in the Panhandle recently announced the Panhandle Import Reduction Initiative. Their hope is to limit the amount of oil that can be imported from other countries.
We wish them success in getting sympathetic ears to hear their initiative and gathering like-minded people to help further it.
They are right that a limitation should be set on the amount of oil imports from the Organization of Petroleum Exporting Countries.
Representatives of OPEC’s 18 nations recently met in Doha, Qatar. Among their topics of discussion was whether to freeze oil production levels.
The nations didn’t reach an agreement on the subject.
“OPEC and Russia and various countries met and decided they weren’t going to freeze oil and, in fact, OPEC said they will increase production again. This will drive the price down to $26 (a barrel) again,” said oil producer Tom Cambridge.
The U.S. currently is enjoying a record level of energy production. Between 2008 and 2015, oil production in the U.S. increased by nearly 4.5 million barrels a day.
The increased production had a predictable effect on imports. Light crude oil imports to the U.S. declined from 2.2 billion barrels a day in 2010 to 625,000 barrels a day in 2014.
It’s easy to see why OPEC countries didn’t reach an agreement on freezing oil production. They want plenty of oil to be available on the international market to bring down oil prices.
When the prices get low enough, it hurts American oil producers and hinders domestic production of oil.
This isn’t the first time OPEC has played this manipulative game and engineered economic havoc in Texas — and elsewhere in the U.S.
In the past, after they have lowered our production levels, the OPEC countries haven’t had any difficulty reaching an agreement to freeze production.
At that point, they will want to increase oil prices by lowering the supply of it.
It’s time to stop this tactic, and the Panhandle Producers and Royalty Owners Association have the right idea.
If oil imports to the U.S. are limited, it means more companies will be buying the oil that’s produced here.
Many American producers have taken economic risks to be part of the record energy production in the U.S. They shouldn’t have to suffer at the hands of greedy foreign oil interests.
Could the Panhandle Import Reduction Initiative be successful? We don’t know, but the Panhandle oil producers are doing the right thing to try. There should be a market for the oil that’s being produced in the U.S.
Maybe I'm wrong here but I'm thinking SA is already buddied up with the OPEC, Russia and China.
That bunch has the most to gain by our mis-fortune seems to me.
I say okay then - we don't need their comeraderie / business / oil.
If / when Russia / China moves into the House of Saud's palaces maybe he'll be sorry who he chose to buddy up with ? ! ?
So also, there will be more Boeing Aircraft for us to use to defend ourselves with should things heat up even more - we may need them.
Don't get me wrong however - I'm no hawk / war monger - but by the same token I don't think we should come off looking weak by alowing them to walk all over us / use us for a door mat.
And, I agree things like Tariffs shouldn't be applied willy- nilly / taken lightly as it's all very serious business.
Just expressing my take-away here.
P.S. : What's a COO ?
Okay so we impose Tariffs and Sanctions on Countries that Dump their excess steel on us but do nothing when others dump their excess crude... M12
Our country does not unilaterally impose "tarriffs and sanctions" . With regard to steel, our country has trade agreements in place dealing with this issue. "Dumping" is dealt with under the terms of those agreements.
There are no such agreements with regard to oil imports (in general).
Your comparison is incorrect.
BTW, this is why the TPP proposed by Barak Obama and supported by Hillary Clinton should be opposed.
Further, the tarriffs of 1929 and 1930 caused the recession that FDR turned into the Great Depression.
Any tarrif/sanction will be met with an opposing reaction by the other country and it's allies, the result will be a negative for our country. Tarriffs and sanctions are reactionary and detrimental.
Finally, the imports of oil from other countries is not the reason for the depression of domestic production. Imports are a straw dog meant to stir up the uninformed.
Instead, concentrate on regulations from our own government that stifle domestic oil and gas production. Plus, the lack of refinery capacity and flexibility of refineries caused by over reaching regulations from our government.
All of these unnecessary regulations are supported by Hillary Clinton.
As things are currently, I'm for an outright embargo on ME Oil myself.
Skip the Tariff part altogether.
We don't need their 'stinkin' oil'.
I think trade agreements with vetted allied country's only is the way to go.
Have you read that China is building a huge military base at the south end of the Red Sea ? What does that mean to oil flow internationally do you think ?
Kiss the ME oil goodbye.
Defend the Suez Canal and the Mediteranian for trade with ME oil among vetted allies (Israel) as China seems to have a lock on ME oil leaving the south end of the Red Sea. Unless we can rid ourselves and allied countries of that Chinese base and the control it will command somehow. How I wonder ?
That Chinese Military Base is being built in a place named Djibouti as I the news reported. It's at the south end of the Red Sea where it connects to the Gulf of Aden.
At first thought it was some special SA Kingdom only acronym / Title.
Threw me a bit of a curve there.
Our research indicates that the US Department of Defense budget allocates $50-$70 per barrel for every barrel we import from the Middle East. We are putting US military folks at risk to protect the borders and water ways for this oil to come from OPEC countries. Why are we doing this when we could be producing our own oil? The PIRI calls for a presidential proclamation to limit imports of this foreign oil, which will encourage domestic exploration and production. For more on PIRI and our research see our Face Book page -> https://www.facebook.com/PanhandleImportReductionInitiative/