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Brian4Liberty
01-14-2015, 01:47 PM
Cruz Plans Crude Export Amendment to Keystone Legislation, Spokeswoman Says (http://www.bna.com/cruz-plans-crude-n17179922051/)
By Ari Natter and Laura Litvan - January 13


Sen. Ted Cruz (R-Texas) plans to offer an amendment to lift the 40-year-old ban on the export of crude oil to Keystone XL pipeline legislation being considered on the Senate floor, according to a spokeswoman for the senator.
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A spokesman for Senate Majority Leader Mitch McConnell (R-Ky.), who previously has pledged to have an open amendment process on the Keystone bill (S. 1), didn't immediately respond to a request for comment.

While some Senate Republicans such as Lisa Murkowski (Alaska), the chairman of the Energy and Natural Resources Committee, have pushed to ease export restrictions that were put in place in the wake of the Arab oil embargo, many remain divided on the issue.
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More: http://www.bna.com/cruz-plans-crude-n17179922051/

charrob
01-14-2015, 05:14 PM
Cruz Plans Crude Export Amendment to Keystone Legislation, Spokeswoman Says (http://www.bna.com/cruz-plans-crude-n17179922051/)
By Ari Natter and Laura Litvan - January 13

This is more of a question than a response about the price of oil and gas.

By far the #1 export from the United States is, and has been, refined gasoline. That’s the reason our trade deficit isn’t as bad as it should be since we don’t make anything anymore.

Unlike U.S. gas, oil is priced on a world-wide market. So increasing drilling here theoretically helps the man in China filling his gas tank as much as the U.S. consumer. Because it increases the world supply, the increase is divided by the world demand not the U.S. demand. So the U.S. consumer only slightly benefits from drilling in the U.S. since that drilling is divided by world demand.

U.S. gas, however, is not priced on a world-wide market. It’s priced just on the U.S. market (and especially because of fracking, the U.S. has huge amounts of gas). --Which is why U.S. consumers currently heating their homes with gas are paying very cheap prices. Currently Republicans in the House want to change this and base U.S. drilled gas prices on the world market rather than the U.S. market. If this happens and you use gas to heat your home, look for your prices to increase dramatically since China is a huge consumer of gas.

My understanding (and correct me if I’m wrong) is that in the past whenever there was an oversupply of world oil, that OPEC would decrease their supply to correct the price to keep the prices high. Because of U.S. fracking, particularly in North Dakota, the world supply of oil increased. Normally, OPEC would decrease supply. However, my understanding is that when Obama travelled to Saudi Arabia, there was an agreement with the Saudis not to allow OPEC to decrease supply in order to harm Russia. And that the Saudis complied.

And that is why gasoline prices are so low: it has more to do with OPEC not decreasing their supply as they normally would.

Too many people believe drilling more here helps their pocketbook; however, because oil drilled here is based on world market prices and therefore depends on others in that world market, drilling more here is really not the reason prices are low. If we nationalize drilling and drill here (like, say, Mohammad Mosaddegh did before our CIA overthrew him), then drilling more here would actually strongly affect what consumers pay at the gas pump.

As far as Ted Cruz and this crude oil bill: again doesn’t any surplus in crude oil have to be divided by all world consumers of that oil since oil is priced on the world market? Ie. So any surplus in straight crude oil wouldn’t really help the U.S. gasoline consumer that much. Really it seems that those that would be harmed by Ted Cruz’s bill would be U.S. refineries for that oil rather than U.S. consumers…

All of this is why I never really understood the ‘drill baby drill’ people. They are misinformed in thinking the drilling here will substantially decrease their price at the pump when, in actuality, sans world political situations like with Russia, their price at the pump right now wouldn’t be much lower than usual because of the increase in U.S. drilling. If these people really wanted lower prices, oil drilled here would have to be nationalized the way natural gas currently is. At least that's my understanding...

Brian4Liberty
01-15-2015, 11:25 AM
This is more of a question than a response about the price of oil and gas.
...
Too many people believe drilling more here helps their pocketbook; however, because oil drilled here is based on world market prices and therefore depends on others in that world market, drilling more here is really not the reason prices are low. If we nationalize drilling and drill here (like, say, Mohammad Mosaddegh did before our CIA overthrew him), then drilling more here would actually strongly affect what consumers pay at the gas pump.

As far as Ted Cruz and this crude oil bill: again doesn’t any surplus in crude oil have to be divided by all world consumers of that oil since oil is priced on the world market? Ie. So any surplus in straight crude oil wouldn’t really help the U.S. gasoline consumer that much. Really it seems that those that would be harmed by Ted Cruz’s bill would be U.S. refineries for that oil rather than U.S. consumers…

All of this is why I never really understood the ‘drill baby drill’ people. They are misinformed in thinking the drilling here will substantially decrease their price at the pump when, in actuality, sans world political situations like with Russia, their price at the pump right now wouldn’t be much lower than usual because of the increase in U.S. drilling. If these people really wanted lower prices, oil drilled here would have to be nationalized the way natural gas currently is. At least that's my understanding...

Wow, that's a lot to digest! ;)

That's a good question about exporting refined gasoline vs. exporting crude oil. Apparently, the oil companies have a desire to export crude oil. That will allow them to play in the global crude oil market. All I can add are more questions. Perhaps they believe that the amount of crude oil produced in the U.S. will exceed their refining capacity at the Gulf refineries? Perhaps they have refineries elsewhere that they want to use? Perhaps the profit margin is sometimes better by exporting oil rather than gasoline?

And choking refinery capacity has long been their key to keeping gasoline prices high in the US. If it is a refining capacity issue that makes them want to export crude, there's the conflict. Increasing refining capacity in the US is not good for them, therefore, they would rather export the excess crude oil.

HOLLYWOOD
01-15-2015, 01:47 PM
US currently imports 6.5-7M bbl of crude a day, down from 8M bbl just one year ago.

http://ycharts.com/indicators/us_crude_oil_net_imports

If export countries built refineries large enough to support domestic and exports demands, it could cause trade wars once again with the US subsidized compensated industry. With corporate welfare tax laws allowing not only writeoff of current losses against sales, but write-offs of losses against previous years of profits in past . This is how the US gov can conduct global economic war(Russia, Iran, Venezuela, etc) while minimizing the damage to US competitors. I see the problem with Canada, they take a huge hit and are currently headed for a recession, if not already there. There's a drop in both employment and wages, Canada's real estate is in a slowdown, their bank earnings are down, and then the US trade impact and exchange rates. They want that Keystone pipe laid to the US refineries, btw, 17% of all US exports go to Canada, but yet more bad news as Target just announced they are closing all their stores in Canada.

So there's Secretive portions to NAFTA, it's unknown if US taxpayers are subsidizing parts of Canada's economic turmoil with Washington DC/FED pump-up manipulations.


I did read about some refinery fires/maintenance, which should help RBOB pricing, but the today's energy commodities swinging 15% has the manipulation casinos in overdrive.