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 Shaw on May 10, 2016 at 1:57am

I don't think it is practical or possible to distinguish between importing "Good" Oil or Bad Oil. If you were to establish some means of certifying the source of the oil, and accommodate co-mingling issues, you increase the cost of this special 'Good' oil and the rest of the world is happy to accept the "Bad" oil. In any event, are not likely to achieve any goal of harming whoever it is you perceive as the Bad Guys this week/month/year.

To achieve an Iran type embargo, you have to get all buyers to agree, and I do not see that as a possibility on such a narrow focus on what Bad means to you.

You are stuck with either limiting all oil imports or none. It is an International Market. Limiting all importing will decrease competition and raise prices to the U.S. general population, and that is the intention of the initiative. If you are fine with having a subsidized Oil & Gas industry, welcome to the welfare state.

Permalink Reply by Bluflame on May 10, 2016 at 2:03am

Bob,

Agreed. A limited embargo by the US would be counter-productive to our interests. Noble in theory, but ineffective in practice.

BluFlame

Permalink Reply by Joseph-Ohio on May 10, 2016 at 2:58am

I've been thinking the current bad guys have always been the bad guys myself.

I'll be thinking that next week, next month, next year, ad infinitum myself unless they have a monumental change of heart or are disabled / utterly defeated / rendered harmless.

Permalink Reply by Martha Lee Vincent on May 14, 2016 at 1:00pm

WHY SHOULD WE BUY OIL FROM SAUDI ARABIA AND OTHER ARABIC COUNTRIES WHEN THEY ARE TRYING TO DESTROY OUR OIL AND GAS INDUSTRY ???  WE USE SO MUCH MORE ENERGY THAN ANY OTHER COUNTRY THAT WE PROBABLY COULD DO VERY WELL IF WE SUPPLIED ALL OUR OWN ENERGY !!!

Permalink Reply by Joseph-Ohio on May 14, 2016 at 1:01pm

Now your talkin' ! !

Permalink Reply by Bluflame on May 15, 2016 at 2:33am

J-O & Martha,

   IMHO….it is naive to think a selective embargo of oil producing states who we do not like will be effective. It would be a prime example of "The Law of Unintended Consequences". 

BluFlame

   

Permalink Reply by Martha Lee Vincent on May 15, 2016 at 10:39am

MAYBE OPEC SHOULD SEE THAT THE U.S.A. HAS OPTIONS, AND DON'T NEED TO TAKE WHATEVER THEY HAND OUT !!!

Permalink Reply by Bob Shaw on May 15, 2016 at 2:19am

If you eliminated O&G imports, I'm sure we will still function, but at the pump prices will go $4-$5-$6/gal pretty quickly. The U.S. O&G will flourish and landowners will benefit. If instead of eliminating imports, you just limited, it will have a similar effect. Fuel prices will increase, O&G industry will benefit at the expense of others.

All while the rest of the country is subsidizing this "boom" with higher energy prices. 

It is short sighted and greedy.

Permalink Reply by Joseph-Ohio on May 15, 2016 at 3:10am

Me and mine are against anything that harms the USA and any / all of its people / domestic economy.

Massive Oil & Gas  industry bankruptcy harms  our people and our domestic economy as evidenced by over a million Gas & Oil folks put out of work and posts pertaining to and decrying the Gas & Oil industry's negative condition.

Have to fix all of that and grow our domestic economy instead of concerning ourselves with that of any others.

There are also consequences to doing nothing and I think we're experiencing many of them now.

Are unintended consequences precipitated by actions defending our domestic economy and people going to be better for us or worse ? ?

I think things are bad enough to try it on.

JMHOs

Permalink Reply by Jim Litwinowicz on May 15, 2016 at 1:51am

Total US imports are down substantially in the last few years. If imports from SA and the ME are up it has to be because of the great turmoil in Venezuela, a major US supplier, and the decline in production from Mexico. Gulf Coast refiners need the heavy oils that imports supply while nearly all the oil from fracking is a light crude these refiners cannot use. If you limit imports, these refiners will have to shut down for a considerable amount of time while they are retooled at great expense to shift to light crudes. That would limit gasoline supplies and drive up costs for consumers and industrial buyers. If the XL pipeline had been approved and built, much of the heavy crude would be coming from Canada and not the ME. You can thank Obama for any increase in ME crude imports.

Permalink Reply by Bluflame on May 15, 2016 at 9:18am

Hi Jim,

   I concur with your assertions. Engaging in a trade war risks making a bad situation worse. However, this will be my last post on this subject. I stand by my opinions, but decline to discuss it further.

BluFlame

 

Permalink Reply by Joseph-Ohio on May 15, 2016 at 10:01am

Just so you know Blu', I 'm going to concentrate on the 99% of all of the other things we categorically do agree on.

Your Friend on GMS,

Joseph-Ohio

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