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
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Permalink Reply by Joseph-Ohio on -
'Limit Oil Imports ?'
Of course.
Especially from OPEC and any hostile / potential hostile states.
Limit those (as well as their friends) to zero (O).
Also limit exports (to zero (0)) to that lot.
JMHOs
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Permalink Reply by Bob Shaw on
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So, international O&G commerce export limits are bad, and import limits are good because both help U. S. consumers and both harm O&G producers?
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Permalink Reply by Bob Shaw on
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O&G is an International market. Restricting export was bad for the producers, but probably pushed U.S. consumer prices down. So we open up the international export to little or no effect, but not for the benefit the U.S. consumer.
Now the call goes out to restrict import to the benefit of the oil producers (again). Again, not for the benefit of the U.S. consumer.
What do you call laws that benefit a smaller special interest group at the expense of the General Population? What do you call lawmakers that support such actions?
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Permalink Reply by Joseph-Ohio on
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Bob,
These days, I would call it 'a measured response' during an 'Economic War' with the 'smaller special interest group' being our very own U.S.A. (including it's General Population) and it's 'vetted allies'.
There is risk, expense and reward involved in any type of 'War'. But, I think we can win this one. When we win there SHOULD be reward for ALL of us and those on our side.
BTW, I'm watching and seeing this 'Economic War' morphing / growing into a regular old plain vanilla 'Hot War' on almost a daily basis myself. How do you see it, Bob ?
JMHOs
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Permalink Reply by Joseph-Ohio on
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But, granted, Bob, there are many laws on the books that seem to me to be written solely for special interest segments of our population that should not be.
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Permalink Reply by Joseph-Ohio on
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Also, how about some laws to stop landowner tresspass and to bolster rights of private ownership; along with some to protect the U.S. consumers ?
That would be refreshing wouldn't it ?
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Permalink Reply by Bluflame on
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Agreed…we would shoot ourselves in the foot by limiting imports. It would merely invite reprisals. Keep the government out of it.
BluFlame
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Permalink Reply by Joseph-Ohio on
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I don't think we can keep them out Blu.
My feeling is they're already in it up to their ears.
I think they're party to the cause of it all myself.
Time to hit back if you ask me.
Can't worry about future hits when you're in a scrap.
Have to count on them and hit harder (in defense).
Make them not want to hit anymore.
Time to make them worry about reprisals.
JMHOs
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Permalink Reply by Bluflame on
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A secondary but important issue is grades of oil. All oil is not the same, mostly (but not totally) differentiated by levels of API. Refineries and other oil consumers are designed to operate most efficiently within a fairly tight API range. Customers know the sources of the oil grade they need. So, restricting imports from various rogue countries could theoretically upset the applecart in terms of oil supply.
As an example of this many gulf coast refineries consume "heavy" oil (low API) coming from places like Venezuela and Mexico. The oil produced in many shale formations including the Texas EagleFord and Ohio Utica is "light" (high API) to very light (Condensate). When crude export restrictions were lifted, this light oil immediately began to be shipped into the international markets.
My point here is there is a practical and economic reason to tread lightly into oil embargo waters.
BluFlame
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Permalink Reply by Joseph-Ohio on
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I'm not in favor of willy nilly embargoes either BluFlame. But, I also believe that potential enemies and outright enemies ought not to be traded with on any basis.
A potential enemy to me is any flag that advertises harm to our country / it's economy / it's population for any 'reason' (political / religion included).
An outright enemy to me is any flag that actually indulges in harming us for any 'reason' (political / religion included).
On a general every day (including on a trade and economic basis), I think we should treat any potential enemy in the same manner that we would treat an outright enemy including sanctions / embargoes (until such time that they would indulge in the harm to us that they advertise). When / if that would happen I think we should defend ourselves and permanently destroy their capability to harm us.
I don't think my beliefs are at all radical / willy nilly myself. As long as we have potential / outright enemies out there I would term them (my beliefs) only practical and right minded.
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Permalink Reply by Bluflame on
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J-O,
"Keep your friends close and your enemies closer". Having economic ties with "enemies" as you describe them reduces (but not eliminates) the likelihood of mischief on their part. In theory, all act in their own financial best interest. ISIS is an exception, but a bit player in the oil market.
BluFlame
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Permalink Reply by Joseph-Ohio on
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Thank you sir.
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