Wednesday, July 9, 2008

No Limit to the Supply of Dumb Oil Ideas

I could blog every day on the harebrained schemes being cooked up to deal with rising oil prices, but in the interest of efficiency I’ll focus only on the worst. Certainly holding its own among the goop at the bottom of the $136 barrel is this suggestion from Harry Reid, according to today’s New York Times:

He [Reid] also hinted at a potential element of compromise legislation: that any oil produced from wider access to federal lands off shore be reserved for domestic use and barred from export.

How patriotic this sounds, until you realize that the US exports virtually no oil, consuming all it produces and then another 150%. But even if we did export some of the off shore supply, so what? Suppose we export 100,000 barrels we would have consumed and then import an extra 100,000 barrels to make up for it, how would this affect energy prices, the current account, global warming or Reid’s majority in the 111th congress?


Jack said...

It always makes a citizen proud to recognize that the leadership of this great country's legislative branch is competing with the Executive Office for the title of dumbest, or maybe only most insincere
member of government. Don't underestimate the insincerity perspective. On the other hand, if Reid or his assistants and associates really thought they could sell that pound of BS they probably are that dumb.

PS: Is that really an ad for the Peter G. Peterson Foundation in the left border? Talk about selling a pound, maybe a ton, of BS to the unsuspecting public. I know ad revenues helps the site, but taking money from such a source sullies the page.

Peter Dorman said...

It's even better for us than you think. We cut a deal: if the Peterson people privatize SS and make a bundle for Wall St., EconoSpeak gets its slice off the top. said...

I thought that a bunch of our oil from Alaska, indeed most of it, was going to Japan. This has always gotten all sorts of morons upset, except that indeed there is simply a global market for oil, so it really does not matter what is imported and what is exported, only the net flows, which, of course amount to something like 60+% of US consumption being imported.

PGL said...

Next we'll see that the citizens of Switzerland will vote to make sure they don't export fish. Or maybe the Japanese will decide to curb the exports of strawberries and bananas!

Anonymous said...

according to bp's energy review, the US exported 6 million tons of crude & 63 million tons of product in 2007. That was a 9% rise from 2006. & 2006 was a 17% rise from 2005, which was a 14% rise from 2004, which was an 8% rise from 2003.

before this period (which coincides with the steepest price hikes), export increases were in the neighborhood of 2% or less.

export volume = 10.5% of import volume - doesn't seem like "nothing".

Capacity utilization & refining margins in this report are also interesting.


Peter Dorman said...

Barkley, FWIW, according to the EIA, in April the US exported 0.3% of its crude oil production. Perhaps some of the Alaskan oil is refined first before being exported; just under 10% of all throughput of refined petroleum products, both domestically produced and imported were (re-)exported.