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On June 29 2022 04:14 LegalLord wrote:Show nested quote +On June 29 2022 03:53 Oukka wrote:
LL, you've been speaking about the oil export controls for a few pages now? Is there some reason to believe that the price increase is due to a capacity constraint, so that export controls would actually affect the prices?
I'll say that I haven't heard of any changes in the US oil industry over the last year or so in a way that that would have lead to capacity constraints. If the price increases arise from global instability (that little war thing involving a significant global producer/exporter of oil) then US export controls aren't limiting the upward pressure on oil prices. Rather you'd need the global competition to pick up (i.e. Russia/Saudis increasing production and their exports). The simple version is that the US is a net exporter of oil & refined products (the latter more so than the former), and in a time of shortage we shouldn't be. There's an argument to be made that crude oil itself isn't efficient without a global supply chain, a valid one at that, but the only real argument for net exports of gas & diesel are "markets bro." Or in other words, we prioritize the profits of oil corporations and the demand of foreigners over the cost of living crisis of Americans. A no-brainer for anyone that was whining about corporate greed that wants to follow it up with actions. We (unintentionally) did it with natural gas when the LNG plant caught on fire, cutting a third off the natural gas bill; we can do the same with gasoline & diesel. If you haven't heard anything about reduced capacity in US industry, it's not for lack of it happening. Shale has taken a pretty brutal beating since the pandemic, as has refinery capacity. The US can still more or less meet its oil needs, but just barely. Not enough capacity to allow for net exports to persist. I recall something like $4/gal back in January, which is already elevated.
I know you’re not some econ novice, so presumably you can describe this problem better and you’re just not doing it. If domestic demand is so high why are companies exporting it? Is it more profitable elsewhere for some reason? And if so, wouldn’t they need to *raise* prices here (or else cut supply) if they were forced to sell domestically long-term? Obviously in the short-term we could surprise them with an export ban and flood the domestic market, presumably crashing prices, but that only works briefly, and only if they don’t see it coming.
And isn’t that international demand doing something? Like, is your argument “companies are stupidly exporting oil in a way that helps nobody, so we should forcibly stop them”?Or is it “companies are exporting oil because it produces more value there than here, but if we forcibly stop them it will produce local improvements for Americans (at the cost of greater losses for non-Americans)”? I suspect the latter but I’m genuinely unsure what you’re claiming.
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I still don't believe it will lessen his influence significantly. No matter what comes to light, his supporters won't care.
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On June 29 2022 04:46 Starlightsun wrote:I still don't believe it will lessen his influence significantly. No matter what comes to light, his supporters won't care.
DeSantis is already gaining ground on him. I think Trump is going to be left behind as the Republicans flock to their new, better Fascist leader who won't fuck up the coup. The changes to voting laws in purple and red states will help make sure the 2024 coup goes without a hitch too.
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United Kingdom13775 Posts
On June 29 2022 04:40 ChristianS wrote:Show nested quote +On June 29 2022 04:14 LegalLord wrote:On June 29 2022 03:53 Oukka wrote:
LL, you've been speaking about the oil export controls for a few pages now? Is there some reason to believe that the price increase is due to a capacity constraint, so that export controls would actually affect the prices?
I'll say that I haven't heard of any changes in the US oil industry over the last year or so in a way that that would have lead to capacity constraints. If the price increases arise from global instability (that little war thing involving a significant global producer/exporter of oil) then US export controls aren't limiting the upward pressure on oil prices. Rather you'd need the global competition to pick up (i.e. Russia/Saudis increasing production and their exports). The simple version is that the US is a net exporter of oil & refined products (the latter more so than the former), and in a time of shortage we shouldn't be. There's an argument to be made that crude oil itself isn't efficient without a global supply chain, a valid one at that, but the only real argument for net exports of gas & diesel are "markets bro." Or in other words, we prioritize the profits of oil corporations and the demand of foreigners over the cost of living crisis of Americans. A no-brainer for anyone that was whining about corporate greed that wants to follow it up with actions. We (unintentionally) did it with natural gas when the LNG plant caught on fire, cutting a third off the natural gas bill; we can do the same with gasoline & diesel. If you haven't heard anything about reduced capacity in US industry, it's not for lack of it happening. Shale has taken a pretty brutal beating since the pandemic, as has refinery capacity. The US can still more or less meet its oil needs, but just barely. Not enough capacity to allow for net exports to persist. I recall something like $4/gal back in January, which is already elevated. I know you’re not some econ novice, so presumably you can describe this problem better and you’re just not doing it. If domestic demand is so high why are companies exporting it? Is it more profitable elsewhere for some reason? And if so, wouldn’t they need to *raise* prices here (or else cut supply) if they were forced to sell domestically long-term? Obviously in the short-term we could surprise them with an export ban and flood the domestic market, presumably crashing prices, but that only works briefly, and only if they don’t see it coming. And isn’t that international demand doing something? Like, is your argument “companies are stupidly exporting oil in a way that helps nobody, so we should forcibly stop them”?Or is it “companies are exporting oil because it produces more value there than here, but if we forcibly stop them it will produce local improvements for Americans (at the cost of greater losses for non-Americans)”? I suspect the latter but I’m genuinely unsure what you’re claiming.
Yes, the latter comment on your second paragraph is about it. Though I would say it produces more value for non-Americans and for oil companies, not so much for Americans.
It's a classic situation where a critical production input (energy) is in short supply, and in an emergency it makes sense to prioritize domestic consumption over any potential export profits. A time when we're emptying our strategic reserves at record pace is the precise time not to export freely with generic free market justifications.
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Wouldn’t it be more efficient to just seize oil companies’ property directly, rather than forcing them to burn some value in a way that we get a little value from? Confiscate whatever amount of oil makes you happy and let them sell the rest wherever they want. Everybody’s better off, right?
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United Kingdom13775 Posts
On June 29 2022 05:21 ChristianS wrote:
Wouldn’t it be more efficient to just seize oil companies’ property directly, rather than forcing them to burn some value in a way that we get a little value from? Confiscate whatever amount of oil makes you happy and let them sell the rest wherever they want. Everybody’s better off, right?
It would certainly be edgier to do that; might want an economist to run the numbers both ways to see what would be more efficient though. Nationalization of energy assets did come up earlier in this discussion chain as a suggestion.
Maybe Defense Production Act as a middle ground? Looks like that is a thing that was at least mentioned.
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LL isn’t a Republican. “Contrarian” might be a closer description.
@LL: Unless I’m missing something, the proposed export controls are negative sum by your own admission, whereas confiscation is at least zero sum? What other numbers are you wanting an economist to run? It just seems like if your motivations are fundamentally confiscatory, we might as well be direct about it.
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Northern Ireland25468 Posts
On June 29 2022 05:43 JimmiC wrote:
This is so anti free market, when did that flip flop away from Republicans?
Whenever it suits, seemingly.
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On June 29 2022 04:14 LegalLord wrote:Show nested quote +On June 29 2022 03:53 Oukka wrote:
LL, you've been speaking about the oil export controls for a few pages now? Is there some reason to believe that the price increase is due to a capacity constraint, so that export controls would actually affect the prices?
I'll say that I haven't heard of any changes in the US oil industry over the last year or so in a way that that would have lead to capacity constraints. If the price increases arise from global instability (that little war thing involving a significant global producer/exporter of oil) then US export controls aren't limiting the upward pressure on oil prices. Rather you'd need the global competition to pick up (i.e. Russia/Saudis increasing production and their exports). The simple version is that the US is a net exporter of oil & refined products (the latter more so than the former), and in a time of shortage we shouldn't be. There's an argument to be made that crude oil itself isn't efficient without a global supply chain, a valid one at that, but the only real argument for net exports of gas & diesel are "markets bro." Or in other words, we prioritize the profits of oil corporations and the demand of foreigners over the cost of living crisis of Americans. A no-brainer for anyone that was whining about corporate greed that wants to follow it up with actions. We (unintentionally) did it with natural gas when the LNG plant caught on fire, cutting a third off the natural gas bill; we can do the same with gasoline & diesel. If you haven't heard anything about reduced capacity in US industry, it's not for lack of it happening. Shale has taken a pretty brutal beating since the pandemic, as has refinery capacity. The US can still more or less meet its oil needs, but just barely. Not enough capacity to allow for net exports to persist. I recall something like $4/gal back in January, which is already elevated.
Do you have the domestic production and consumption time series, too? For refinery products preferably. I was clicking about the EIA page but I'm not familiar enough with oil&gas to navigate all the terminology there.
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United Kingdom13775 Posts
On June 29 2022 07:21 ChristianS wrote:
Unless I’m missing something, the proposed export controls are negative sum by your own admission, whereas confiscation is at least zero sum? What other numbers are you wanting an economist to run? It just seems like if your motivations are fundamentally confiscatory, we might as well be direct about it.
I'm not sure I proposed any specific controls other than the general direction of "we are currently a net exporter, and should stop being so in a way that instead redirects outbound supply towards domestic consumption." Export bans, tariffs, quotas, something clever, what have you - these would be several methods by which to achieve the intended result of not being a net exporter. Not sure you could really call that confiscation; the oilmen make less money, certainly, but they still sell their product for a profit on a market that more strongly favors domestic consumption. Call it a windfall tax by other means, which may or may not be theft depending on your view on taxation.
Is a subtle market incentive less effective than direct government intervention into the supply chain? I suppose that'd be an interesting economic question to pose. Probably not, outside of war, but I could see a case for it in certain specific cases (e.g. refineries scheduled for closure that could instead continue to produce under government control).
Not sure that it's really negative sum. Foreigners will have less supply, American oil companies make less profits, but Americans who use energy (i.e. all of them) get lower costs. If you just look at the balance for the US - more money for the common consumer, less money for oil producers and their shareholders. A grand win in most people's eyes!
Longer term, you'd have to worry about investment and the like, and you'd be hurting the profits of big oil in a way that would discourage some portion of future production. Once the current shock subsides, maybe you ease off the export controls, or chalk up lower production to a win for the environment or something. Next time we have an oil glut, we can fill the strategic reserves "right up to the top" as was proposed during the 2020 demand crisis.
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United Kingdom13775 Posts
On June 29 2022 07:54 Oukka wrote:Show nested quote +On June 29 2022 04:14 LegalLord wrote:On June 29 2022 03:53 Oukka wrote:
LL, you've been speaking about the oil export controls for a few pages now? Is there some reason to believe that the price increase is due to a capacity constraint, so that export controls would actually affect the prices?
I'll say that I haven't heard of any changes in the US oil industry over the last year or so in a way that that would have lead to capacity constraints. If the price increases arise from global instability (that little war thing involving a significant global producer/exporter of oil) then US export controls aren't limiting the upward pressure on oil prices. Rather you'd need the global competition to pick up (i.e. Russia/Saudis increasing production and their exports). The simple version is that the US is a net exporter of oil & refined products (the latter more so than the former), and in a time of shortage we shouldn't be. There's an argument to be made that crude oil itself isn't efficient without a global supply chain, a valid one at that, but the only real argument for net exports of gas & diesel are "markets bro." Or in other words, we prioritize the profits of oil corporations and the demand of foreigners over the cost of living crisis of Americans. A no-brainer for anyone that was whining about corporate greed that wants to follow it up with actions. We (unintentionally) did it with natural gas when the LNG plant caught on fire, cutting a third off the natural gas bill; we can do the same with gasoline & diesel. If you haven't heard anything about reduced capacity in US industry, it's not for lack of it happening. Shale has taken a pretty brutal beating since the pandemic, as has refinery capacity. The US can still more or less meet its oil needs, but just barely. Not enough capacity to allow for net exports to persist. I recall something like $4/gal back in January, which is already elevated. Do you have the domestic production and consumption time series, too? For refinery products preferably. I was clicking about the EIA page but I'm not familiar enough with oil&gas to navigate all the terminology there.
Here's crude production
Here's refinery run
Data on consumption is a bit harder to parse because you have to start filtering out by the various flavors of refined petroleum, but it's about in line with total refinery capacity. Roughly 9mm barrels/day of gasoline, 3-4mm barrels/day of diesel as quick estimates.
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On June 29 2022 08:08 LegalLord wrote:Show nested quote +On June 29 2022 07:21 ChristianS wrote:
Unless I’m missing something, the proposed export controls are negative sum by your own admission, whereas confiscation is at least zero sum? What other numbers are you wanting an economist to run? It just seems like if your motivations are fundamentally confiscatory, we might as well be direct about it. I'm not sure I proposed any specific controls other than the general direction of "we are currently a net exporter, and should stop being so in a way that instead redirects outbound supply towards domestic consumption." Export bans, tariffs, quotas, something clever, what have you - these would be several methods by which to achieve the intended result of not being a net exporter. Not sure you could really call that confiscation; the oilmen make less money, certainly, but they still sell their product for a profit on a market that more strongly favors domestic consumption. Call it a windfall tax by other means, which may or may not be theft depending on your view on taxation. Is a subtle market incentive less effective than direct government intervention into the supply chain? I suppose that'd be an interesting economic question to pose. Probably not, outside of war, but I could see a case for it in certain specific cases (e.g. refineries scheduled for closure that could instead continue to produce under government control). Not sure that it's really negative sum. Foreigners will have less supply, American oil companies make less profits, but Americans who use energy (i.e. all of them) get lower costs. If you just look at the balance for the US - more money for the common consumer, less money for oil producers and their shareholders. A grand win in most people's eyes! Longer term, you'd have to worry about investment and the like, and you'd be hurting the profits of big oil in a way that would discourage some portion of future production. Once the current shock subsides, maybe you ease off the export controls, or chalk up lower production to a win for the environment or something. Next time we have an oil glut, we can fill the strategic reserves "right up to the top" as was proposed during the 2020 demand crisis.
And what of the international relations implications of your proposal, never mind the direct responses other countries would take?
It would be a departure from years of trade liberalization, put into question american international leadership and, in the worst case scenario lead the world into an era of autarkic policies, with all the implication that has on global security. It's nearsighted and irresponsible.
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This roe repeal is turning out a lot worse than I expected. Wouldn’t ya know it, a lot of abortions are for medical reasons and urgent. This is a deeply bad situation. Ashamed to be American, again
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United Kingdom13775 Posts
On June 29 2022 09:16 Sbrubbles wrote:Show nested quote +On June 29 2022 08:08 LegalLord wrote:On June 29 2022 07:21 ChristianS wrote:
Unless I’m missing something, the proposed export controls are negative sum by your own admission, whereas confiscation is at least zero sum? What other numbers are you wanting an economist to run? It just seems like if your motivations are fundamentally confiscatory, we might as well be direct about it. I'm not sure I proposed any specific controls other than the general direction of "we are currently a net exporter, and should stop being so in a way that instead redirects outbound supply towards domestic consumption." Export bans, tariffs, quotas, something clever, what have you - these would be several methods by which to achieve the intended result of not being a net exporter. Not sure you could really call that confiscation; the oilmen make less money, certainly, but they still sell their product for a profit on a market that more strongly favors domestic consumption. Call it a windfall tax by other means, which may or may not be theft depending on your view on taxation. Is a subtle market incentive less effective than direct government intervention into the supply chain? I suppose that'd be an interesting economic question to pose. Probably not, outside of war, but I could see a case for it in certain specific cases (e.g. refineries scheduled for closure that could instead continue to produce under government control). Not sure that it's really negative sum. Foreigners will have less supply, American oil companies make less profits, but Americans who use energy (i.e. all of them) get lower costs. If you just look at the balance for the US - more money for the common consumer, less money for oil producers and their shareholders. A grand win in most people's eyes! Longer term, you'd have to worry about investment and the like, and you'd be hurting the profits of big oil in a way that would discourage some portion of future production. Once the current shock subsides, maybe you ease off the export controls, or chalk up lower production to a win for the environment or something. Next time we have an oil glut, we can fill the strategic reserves "right up to the top" as was proposed during the 2020 demand crisis. And what of the international relations implications of your proposal, never mind the direct responses other countries would take? It would be a departure from years of trade liberalization, put into question american international leadership and, in the worst case scenario lead the world into an era of autarkic policies, with all the implication that has on global security. It's nearsighted and irresponsible.
I'm fine with that. Beats getting bled dry at the pump, and the implications thereof for domestic policy.
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On June 29 2022 01:53 Simberto wrote:
I am always fascinated by this absurd focus on gas prices. How much do people drive for this to be as relevant as it seems to emotionally be for them?
If i drive 50km/day, at 10l/100km, that means i consume 150l of fuel a month. At prices of 2€/l, this means i spend 300€ on fuel. If the price was 1,5€/l instead, i spend 225€ instead. I save a whopping 75€.
Why is an increase like that a massive crisis to people? And if it is really catastrophic and something people can not handle on their own, i would rather say that the goverment should hand everybody 75€/month instead of trying to lower gas prices by 50c/l. Because that way, everyone profits, not only the people who burn lots of gas. In fact, if you live environmentally friendly, you actually win. Meanwhile, if you drive 3 SUVs, you have to pay more. The incentive structure is much better this way, because it incentivices people to burn less fuel, while also taking the economic burden off of the people who cannot afford it.
US public transport is ass. It's largely "oh, we built too much car infrastructure and need public transit, so let's throw some buses on top because it's the cheapest, quickest fix." Problem ends up being that culturally taking public transit is looked down upon. The buses constantly get stuck in traffic and schedules might as well not exist. The vehicles aren't anywhere near as taken care of compared to what I experienced in Paris or Bordeaux.
Live in the suburbs and work in the city? Good luck on living near a regional rail line, or you're either driving into the city, or driving to the train station and paying for parking before hopping on the train if you want to use public transit. Based on my location, the regional rail will take 20-100% longer to get to work. Driving to and from work at a hypothetical down town job would be ~120km round trip. For 4 weeks I'd use around 360 liters.
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United States24690 Posts
It does seem like the US is a little rail challenged. My city's subway system has been operating for the better part of a year with over half of their trains out of service because the wheels don't stay fixed on the axles. I'm not sure how 1840s technology was a bridge too far but here we are. Also, Amtrak just had a derailment with fatalities the other day after striking a dump truck.
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On June 29 2022 01:42 Liquid`Drone wrote:
In Norway the gas price last year was like 15 crowns per liter, thereabouts. ($1.5) We had an election last autumn and prior to that, our environmental party campaigned on increasing gas prices by a lot, possibly upwards to 25 crowns per liter. ($2.5). The other parties derided and mocked them and said that's absolutely not going to happen and they're out of touch urban elites who live places where public transportation and bicycles are actually viable methods of transportation etc etc. Parties refused to cooperate with them because of their environmental demands, and the environmental party ended up getting 3.9something% of the vote, where 4% is the threshold for significant parliamentary representation. The Center Party, one of the two parties forming the coalition government after the election, said 'they will not be in government if the price for gasoline is above 20 crowns per liter'.
Been about 27 cpl for a while now. Green party lost, but won, center party is still in government, but their support has been halved. xD.
Frankly I'm wondering where are the people that should be rejoicing over these higher gas prices. If people care about climate change and want others to burn fewer fossil fuels then they should be satisfied that gas prices are going up. Higher prices should lead to lower demand, however inelastic it may be.
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EPT
