Posted on 09/05/2016 5:30:41 PM PDT by panhandle67
New Mexico and Texas oil companies and communities say they will warn Saudi Arabia and Organization of the Petroleum Exporting Countries (OPEC) to stop overproduction of oil and lowering prices as a strategy to slow or shut them down, or face import quotas.
Independent oil companies with the Panhandle Initiative to Reduce Imports (PIRI) will hold an industry and public rally from 11:30 a.m. – 2 p.m. Tuesday, Sept. 27, at the Pecos River Village Convention Center, 711 Muscatel Ave., Carlsbad. Lunch and admission are free.
Southwest and Rocky Mountain oil producers say they feel they are under OPEC and Saudi Arabian “attack.”
(Excerpt) Read more at artesianews.com ...
The PIRI will present Dr. Daniel Fine and its strategic “White Paper” as the keynote at the rally, along with oil and gas operators from the Delaware Basin (New Mexico Permian) and San Juan Basin.
The oil and gas industry “bust” will be presented by Tom Taylor, economic development, Four Corners, and Tom Dugan of Dugan Productions. Tom Cambridge will speak on the Panhandle of West Texas and John Yates Jr. of Yates Petroleum Corp. on the Permian/Delaware.
More information on the PIRI can be found at www.panimportreduction.org.
Oil import quotas will reduce the incentive to lower costs while raising the cost of oil products. It will slow the development of cheaper ways to extract oil and gas and benefit the Sauds more than anyone else.
A pox on these bastards.
“Southwest and Rocky Mountain oil producers say they feel they are under OPEC and Saudi Arabian “attack.””
They’re right.
The whole damn country is under attack.
Economic attack.
Time to fight back.
“Oil import quotas will reduce the incentive to lower costs while raising the cost of oil products. It will slow the development of cheaper ways to extract oil and gas and benefit the Sauds more than anyone else.”
Maybe, but continued predatory pricing by the OPEC cartel will put US oil producers out of business and make us, once again, under the jackboot of muslim nutcases.
“The American oil industry, which has in the last 10 years created the technology of oil self-sufficiency, will survive without the smaller independent company pioneers in shale and their future risk-taking in finding oil...”
It’s those smaller independent pioneers who have brought us to self-sufficiency. Big Oil says, “Who needs ‘em? And what’s all this I hear about free markets?”
“Integrated companies (with production and refining combined) will survive and dominate in a second downturn with a smaller market share in America alongside potential 60-percent oil imports from foreign producers outside North America.”
With 60 percent of our oil coming from imports it doesn’t sound like these “integrated companies” are “dominating” anything.
It will not put American oil out of business. American costs are coming down pretty rapidly. There is a shakeup and a reorganization in the oil business as the weaker companies get taken over by the stronger ones. The “break-even” cost for fracking has come down from $60 or so and is close to $40 now. The Saudi keeping the price low by ramping up production is insuring that the ceiling in the world markets is declining continually. That is called “the market” and it works better when not hindered by government actions including “protection” of any kind. As soon as we begin to protect by tariffs or quotas we put a floor on the price of oil and disincentivize American oil from continuing to reduce costs.
Yep.
“It will not put American oil out of business. American costs are coming down pretty rapidly. There is a shakeup and a reorganization in the oil business as the weaker companies get taken over by the stronger ones. The “break-even” cost for fracking has come down from $60 or so and is close to $40 now. The Saudi keeping the price low by ramping up production is insuring that the ceiling in the world markets is declining continually. That is called “the market” and it works better when not hindered by government actions including “protection” of any kind. As soon as we begin to protect by tariffs or quotas we put a floor on the price of oil and disincentivize American oil from continuing to reduce costs.”
The whole problem with all that is:
1. The Saudi’s can sell oil profitably for ~7$ barrel. Can US producers get that low? Ever? I doubt it.
2. This is NOT a free market, it’s a cartel: Saudi’s set the price, we’re subject to it, whatever they want.
Is it good for America to be in that position?
I don’t think so.
A tariff keeps dollars in America and out of Muslimdom. That alone is a good enough reason.
But it also gives US oil producers the investment money they need to find cheaper ways to produce oil.
Quotas = corporate welfare. Still we should do everything to put OPEC out of business. Maybe we should join the organization. lol.
Why not? We still have president O’Pecker.
The Sauds can sell oil at $7 a barrel. Yes they can. But they cannot pay for their system at that price. They are suffering fom declining reserves at the current price. They are using up their savings. Meanwhile we are improving our methods. The Sauds will go broke or will cease being able to fund their own formidable welfare system and will face internal unrest they won’t be able to afford to cope with. The real Saudi floor is way above that $7. They are actually operating NOW below their floor. If they continue operating that way then they will go under as a nation, not a bad outcome. It is in American interest to keep the Saudi price as low as we can. It is highly likely that at the current rate of improvement our break even point will decline below $30 without knocking American oil out of business. $40 oil is enough to keep American companies producing and making their wells more efficient. Rig count has declined drastically but oil production has declined only a small fraction of that as we develop cheaper ways to get oil out of the wells remaining. Free markets favor the society yhay innovates. America and Israel are the most innovative societies on earth. We crimp that when we stomp down on innovation by “protecting.” Most conservatives tend to be free marketers except for whatever industry they are noticing on any given day. They can see the big picture generally but can only see today’s restricted view in particular cases.
“Henry Hazlitt’s Economics in One Lesson”
I believe I did read that when I studied econ at Bentley.
Long-term vs short term effects....something to that effect.
“The Sauds can sell oil at $7 a barrel. Yes they can. But they cannot pay for their system at that price. They are suffering fom declining reserves at the current price. They are using up their savings. Meanwhile we are improving our methods.”
We’re improving out methods mostly because of fracking which came about because of the profit incentive of $150/barrel oil.
Take away the profit incentive, production is discouraged. You need to learn to think economically. :)
“The Sauds will go broke or will cease being able to fund their own formidable welfare system and will face internal unrest they won’t be able to afford to cope with. The real Saudi floor is way above that $7. They are actually operating NOW below their floor. “
Ok, I will take your word on that.
“If they continue operating that way then they will go under as a nation, not a bad outcome. It is in American interest to keep the Saudi price as low as we can.”
Not if it ends or discourages US production.
” It is highly likely that at the current rate of improvement our break even point will decline below $30 without knocking American oil out of business. $40 oil is enough to keep American companies producing and making their wells more efficient. Rig count has declined drastically but oil production has declined only a small fraction of that as we develop cheaper ways to get oil out of the wells remaining.”
Ok, I will take your word on that. I did hear a few years back that the break point was $60 per barrel for US producers.
“Free markets favor the society yhay innovates. America and Israel are the most innovative societies on earth. We crimp that when we stomp down on innovation by “protecting.”
No. Historically Tariffs and protection have been a Yuge part of American industry.
“Most conservatives tend to be free marketers except for whatever industry they are noticing on any given day.”
I;m all for free markets here in the US, but not for “free trade” as it’s currently defined. Especially with muslim run cartels...nothing “free market” about them or their oil.
“They can see the big picture generally but can only see today’s restricted view in particular cases.”
I’m a Nationalist, Bill Kristol, Charles Krauthammer, George Will are all “conservatives”. They are supporting Hillary, Nafta, TPP, and any and all such globalist schemes, so I no longer consider myself a “Conservative”.
But I do consider myself well versed in econ, although will defer to you in the minutiae of global oil markets.
I fully support these hard-working diligent Americans who have devoted their lives to ensuring my truck will go forward when I step on the accelerator.
Yes. Import quotas would hurt my pocketbook a little, but not enough to make it worth risking the loss of our independent oil companies and concentrating even more power and wealth in the hands of the Sauds.
We need to bring back small cap manufacturing, too.
Besides, the Saudies want to diversify and not be oil-dependent.
Please refrain from abusing the Frontpage sidebar
You may be well versed but your economics emanates from JM Keynes and is not economics at all but rather nonsense.
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