Recon Dad,
You seem to have a better than average grasp of the oil industry, so please permit me to toss a question ot two your way for comment from a source better informed than I.
When the calculus is performed to determine the cost of oil, is it conducted strictly from a commercial point of view - i.e., landed/delivered cost of imported oil versus domestic oil at the refinery, adjusted for quality - or does it include an economic component - i.e., the value of keeping the money within the economy of the USA (where it will generate business, jobs, and tax revenue) versus sending it offshore and contributing to our trade deficit?
What are the implications of these two approaches from the point of view of the oil industry?
I am kind of an energy maven. Lived in Louisana for a period and have a relative in oil, so I try learn as much as I can on the subject. On FR we have an awesome group of industry people with real world drilling and exploring experience, who I always defer to.
I don’t know that I can from an accounting stand point address your question foriegn oil versus domestic. All oil is graded and if they are the same quality in Saudi or in Texas the price is standardized. Also keep in mind that the majority of our oil comes from Canada and Mexico so there is no ocean shipping issues.
If you look at Natural Gas as an example of what happens when you have plenty domestically to imports, you see a dramatic drop in imports. Shipping NG is not the same as oil but it’s an example.
I’m try (learning) to set up an Energy Issues ping list and as soon as I figure out how I expect it to be a good one with lots of imput from the pros.