Editorials-> Our View: Limiting oil imports would help to protect American producers

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.

http://lubbockonline.com/filed-online/2016-04-28/our-view-limiting-...

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Replies to This Discussion

Permalink Reply by Bob Perkins on May 16, 2016 at 11:12am

Plan Calls To Limit Oil Imports (RADIO INTERVIEW WITH OIL EXPERT DR... 

Friday, 13 May, 2016 Some Panhandle producers are announcing a proposal to try to limit oil imports to attempt to boost the American oil industry. So, how much are we importing now and why, if we can produce all we need domestically? Dr. Daniel Fine, associate director for New Mexico Energy Policy, is helping lead the effort and recently spoke with KXDJ’s Chris Samples. “How much? It is increasing,” said Dr. Fine. Hear more from him by clicking http://highplainsobserverperryton.com/clients/highplainsobserverper.... See more about the plan to limit imports by clicking  http://www.panimportreduction.org/

Permalink Reply by Joseph-Ohio on May 16, 2016 at 11:50am

It's increasing because they can buy it on the cheap and sell it for greater profit than domestic (not caring who they purchase it from - friend / foe / potential foe).

These days we need to do deals only with our vetted allies.

There's blood in the oil otherwise - and the blood is ours.

JMHOs

Permalink Reply by Bob Perkins on May 17, 2016 at 5:18pm

Agreed Joseph- Ohio! I might add this : Hear more from him by clicking http://highplainsobserverperryton.com/clients/highplainsobserverper...


Dr. Fine said the hope is to get the next president to stop the flow. "It is a grassroots effort and has nothing to do with the oil and gas industry in the United States. Much of the support is coming from communities, individuals, field workers, service companies, and more. As these communities suffer a bust, they are activated to join such an initiative," he said.

The target is to reach out to the next president in February or March of 2017 to request an Eisenhower Proclamation. Dr. Fine explained, "This is what it was, and it is in the executive office that a proclamation can be issued. To follow the Eisenhower example and request that of the new president. It sets up almost what Eisenhower did with his council. A ten or twelve percent limitation on import of foreign oil. Mexico and Canada are exempt." 

See more about the plan to limit imports by clicking http://www.panimportreduction.org/

Permalink Reply by Joe Aldridge on May 19, 2016 at 1:09am

First, I don't think you can legally limit imports. But, as I have suggested on other sites, You could put a "Protective Tariff" on all imported oil. If that Tariff was instituted at the rate to bring the price of imported oil to $65 per barrel then that would bring in money that could be used to bring the debt down. Just a simple idea that seems to go over most people's heads.

Permalink Reply by Joseph-Ohio on May 19, 2016 at 2:14am

I see this as a debate (and somewhat complicated); in that the only way it would work to our domestic benefit would be, if the Foreign Producers selling their production to purchasers in the U.S.A. were charged a Tariff (Tax) by our Government (for the privelege of doing business in the U.S.A.) and would simultaneously keep the price of their commodity affordable to the Domestic Purchasers. 

So considering a portion of the Foreign Oil Producers proceeds would be paid to our Government  their Profit Margin would be less. 

Then, if our Domestic Producers could produce for less cost  than the Foreign Oil Producers would charge for their production (and charge less when selling it), any would be Domestic Purchasers would purchase from our Domestic Producers instead; thereby limiting imports of Foreign Production.

Vetted Allies would  be exempted from the Tariff (Tax).

Takes some engineering / trade agreements.

Permalink Reply by Bluflame on May 19, 2016 at 2:22am
Beware the law of unintended consequences. A tariff such as this is an open invitation for retribution from countries paying the tariff. IMHO....the world oil market is too convoluted for a tariff to have the desired effect.
Permalink Reply by Joseph-Ohio on May 19, 2016 at 2:32am

Blu',

Respectfully submitting that I for one see alot of (what I consider to be undeserved) provocations coming at us from other countries occurring these days (and actually have for quite a little while now - like about 3 or 4 decades already).

Thinking other countries ought to consider what would happen if we decided to consider some retribution ourselves.

I wouldn't call it retribution however - I'd term it defense.

Once again all only MHO and respectfully submitted.

Permalink Reply by Martha Lee Vincent on May 19, 2016 at 5:57am

WE ATTRACT MORE PROVOCATIONS FROM OTHER COUNTRIES WHEN WE'RE WEAK, AS WE HAVE BEEN THE LAST 8 YEARS UNDER OBAMA !!!!!

Permalink Reply by Joe Aldridge on May 19, 2016 at 6:57am

I don't see any thing that is a redistribution  from anyone. A protective tariff at $65 would be a simple method to protect our industry from outside producers. The income from that tariff would be a good way to pay down the debt. At least to some extent.

Permalink Reply by Joseph-Ohio on May 19, 2016 at 7:07am

Joe,

The word used was 'retribution' not 'redistribution'.

'Retribution' used in the context of this discussion is understood by myself as an escalation of retaliatory measures in this apparent 'Trade War'.

I'm thinking that you took an entirely different meaning by applying an entirely different word neighbor.

Permalink Reply by Joe Aldridge on May 19, 2016 at 10:33am

Sorry about that; I miss read. I question the retribution thinking. They are the ones that have started the "Trade War". Not us. They wanted to put the Shalers out of business. That to me is a price war and we are the ones that need to protect our industry. I don't understand your idea of retribution. What are they going to do lower the price more?

Permalink Reply by Joseph-Ohio on May 19, 2016 at 10:55am

Others brought up the retribution concern thing.

Thinking their retribution concern is more regarding the escalation of the hot war part of the equation.  Meaning escalation of hostilities by terrorists / allies of the OPEC and / or even other potential hostiles.  

Russia and China are getting up in our face more these days seem to me. Provocative fly bys by both occurring as of late.

I'm seeing anything we do / have done as only basically looking after our interests /acts of defense myself.

I'm with you on protecting our industry in the price war part and don't consider anything we've done as retribution either.

They started it when they backed off cutting their production.  We merely responded by not cutting back ours.

To me ours was a measured response and not retribution.

On that part of it you and I are on the same page I think.

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