$2.00 or LESS a gallon for gas!

[marlinspike]

Originally Posted by 300CAWDDUB

Information was also just released today that if we tapped into that 11 TRILLION dollar oil deposit, the USA would become energy independent at NO COST to the environment. This means that #1 we would not have to rely on middle eastern countries for oil. #2 With no dependency on foreign oil, our gas prices would drop down to 30-60$ per barrel. That’s $2.00 or less at the pump.

Let's say I'm willing to accept statement one. What makes you so sure of statement two? The laws of supply and demand only apply in competitive markets. Automobile gasoline is hardly a competitive market.

[DaveW68]

Originally Posted by marlinspike

Let's say I'm willing to accept statement one. What makes you so sure of statement two? The laws of supply and demand only apply in competitive markets. Automobile gasoline is hardly a competitive market.

The cost of almost everything that you use every day would go down if we were oil independent. Almost everything you use on a daily basis is petroleum based, from plastics to household goods to gasoline, etc. It seems to me that the cost of oil makes everything extremely competitive. And there isn't any country more competitive than the USA.

[300CAWDDUB]

The US currently goes through 9,253,000 barrels of oil a day. Take 11 Trillion barrels, divide that by 9.2million a day, this gives you 3275 years of oil at our current consumption pace. WOW

Now, if we charged US consumers for our own oil what it cost to take it out of the ground, $50 a barrel plus 8 cents a gallon for the company doing the drilling to make a profit, this comes out to about $2.08 a gallon at the gas pumps give or take a little.

This is less then half of what we are paying now.

[srt8man]

I agree with jblue21. We can't assume that they will find oil immediately after they start drilling. They have some pretty good ideas about where they can find the oil, but it will take time to hit the jackpot.

I'm not sure how much truth there was to the discussion yesterday on the Glenn Beck program, but one of his experts agreed that it will take years, not months, for offshore drilling to pay off.

Here is a blog on the topic:
blog2006: Benefits of offshore drilling can take a long time to surface

Originally Posted by jblue21

drilling now wont do a damn thing to oil prices right now, at the very least if they drilled tomarrow it would take at LEAST 5 years(pipe dream) to get it out to the market and realistically it would be 10 years. But thats not even considering the fact that there is a shortage of Rigs on the market to begin with. It takes about 3-5 years to build a new rig and even rigs that arent even built yet already have contracts on them. And to get a rig built, the US will have to wait in line with petrobras, lukeoil, and many others that have rigs backordered. Your looking at, at least 15 years at least for this action to affect any supply and thats if they even find enough oil to even make a difference.

this action is purely political

[300CAWDDUB]

This all depends on who is doing the drilling and how many hoops the government makes the oil company jump through to get that oil. The best case scenario is after about a half year. Worst case, well there is no real way to tell. If the company doing the drilling is constantly bombarded with environmental and government roadblocks, then yes it could be years.

A lot of people think Glenn Beck is a crazy guy who has no clue what he is talking about but ive been following up on a lot of the things he has been saying about the economy lately and he is pretty spot on about most of it.

[300CAWDDUB]

One interesting topic Glenn brought up the other day is that environmentalists have long argued that we cannot drill in ANWR because of the harm that will be done to the environment. Congressman Steve King (Iowa) who recently toured ANWR, said one (of many) interesting sights he saw that contradicted the activist claims was the 700 mile stretch in which they didn't come across a tree.

[marlinspike]

Originally Posted by DaveW68

The cost of almost everything that you use every day would go down if we were oil independent. Almost everything you use on a daily basis is petroleum based, from plastics to household goods to gasoline, etc. It seems to me that the cost of oil makes everything extremely competitive. And there isn't any country more competitive than the USA.

Ok, so we become oil independant. Of course, because we're pumping it all with American labor rather than illegal immigrant Pakistani labor, the costs of production skyrocket, but let's ignore that for now and presume that the oil companies' costs drop because of this.

So their costs drop. What is there to drop the price? Where is the downward pressure in the automobile fuel market? They'll charge the price that makes them the most money, which may well be $4/gallon since even at this price people have only changed their consumption so much (i.e. demand for gas is inelastic). There isn't the invisible hand of competition to push the price down because there is very little competition in the sale of automobile fuel.

[usnis0922]

Sorry to say we consume 20million bpd

[Aleks202]

I would like to add that the US enjoys some of the cheapest petrol prices in the developed world so quit ya whinging!

Anyway, apart from your current, very fortunate position what makes you think that the new conservative democratic candidate aka. Obama once in power will not sign the equivalent of the Kyoto protocol. Whatever the rest of the world come up either through G8 summits or otherwise, its just going to increase gas prices anyway through something like a carbon tax.
I hate to say it, but it is going to have to get a hell of a lot worse before it gets better. And the only reason the situation will improve long term is a transfer from thinking gas is the only option...

[marlinspike]

Keep in mind that a much larger portion of the prices in the rest of the world are taxes, which then pay for things like health care (fwiw, I wouldn't want govt health care) and other services so the people don't have to pay for those services out of their own pockets.