That's not the point at all. It's so that when prices are high, more of the cost of oil consumption generates benefits to US owned businesses instead of simply piling into the pockets of foreign owned businesses. That money will flow into domestic business operations, which pay taxes in the US, and which employ people in the US, who spend that money in the US, thus offsetting to some degree a higher price of oil.
Unless you have some real numbers, I think you're vastly, vastly
overinflating the effect of what you describe. And if you think this gives some real foreign policy or economic leverage to say "Yeah well, Shell will just drill here and sell our oil back to us at $140 a barrel (unless China buys it or India or Indonesia or...) and we'll get some minor benefit so HA!
", I'm just going to laugh at you. Or your statement that this will "save us some cash".
If the choice is between buying that oil from Shell at $140 a barrel or buying it from some foreign oil producer for the same cost, isn't the former better than the latter? Even if our production has absolutely zero impact on global oil prices at all, it's worth doing. Isn't it?
Actually, we can't. I mean, perhaps going from zero capacity to 100% full-every-spot-being-tapped capacity but any realistic ramp up from out current capacity is not going to make a major impact.
We can't now, because our own oil needs so far outstrip our oil production that we're at or near production maximums already and are unable to take any advantage of changing oil prices.
And, again, you're vastly overstating the effect of "news". Remember when Bush announced about offshore drilling and it did nothing?
No one expected that it would. Not today anyway.
Investors aren't stupid -- they know what you're looking at a decade or more between announcing and actual oil entering the market.
I'm not sure what point you're making here. No one is arguing that announcing plans to increase US domestic oil production 8-10 years down the line is going to have an immediate effect on oil prices today (ok, maybe some nutballs are, but no one serious). The argument is that we need to start increasing oil production infrastructure today so that 10 years down the line we're not just as subject to the whims of the oil market as we are today.
I just don't understand at all the argument that there's no sense doing this because it'll take too long to take effect. If we'd increased that oil production infrastructure 10 years ago, wouldn't we have it in place today? It's like arguing that there's no point taking any steps towards the grocery store because it'll take a thousand more to get there and we need groceries right now. Um... That need doesn't change if we don't start walking, right?
And that doesn't benefit the rest of us?
Significantly so? No. Unless you want to show otherwise.
Huh? Are you seriously arguing that it doesn't benefit us to produce more of the oil we consume in the US than to buy it from foreign sources? Because that's a bit crazy. If you can't grasp that producing something locally is pretty universally viewed as good for said local economy, then I'm not sure how I can help you to understand this. You'll just have to take my word for it that this is true I guess.
Your failure in this matter doesn't translate into you being right.
But you're the one positing this little theory supporting production so it's really up to you
to "right", not me. So far you're not producing any real evidence of it.
What evidence would suffice? You need someone to tell you that increased domestic oil production would benefit the US economically? Isn't the fact that this is true for any good in any market proof enough? Maybe you should take a basic economics class or something?
And I doubt you ever will besides saying "it's obvious!" and "I don't have to show you..."
Lol! Covering your bases, aren't you? I love it when you do this btw Joph. You predict the obvious response to your ridiculous argument and then declare victory because you predicted it. Wow! That's so clever...
But heres some guy writing a paper on the subject
. As predicted, he concludes that areas where oil is produced locally are not negatively impacted when there are sudden oil price spikes (and in some cases actually benefit). That was like 10 seconds of googling Joph. It's not like the concept of "local production of a good benefits local economy if said good increases in cost" is even remotely difficult to understand much less even refuted seriously.
But I'm sure you'll insist that that's not sufficient evidence I guess. I'm sure you'll play the usual game you play of insisting that nothing I say is "proof", while insisting that if I don't provide proof, I must be wrong. At the end of the day, what you are arguing completely flies in the face of some pretty basic economic realities. It's you who need to make the argument that increased production wont benefit the US. I don't think you can do that though, so you fall back on this incredibly lame approach. Edited, Apr 11th 2011 4:12pm by gbaji