4 ms·

I thought this would be obvious to people. An oil glut means fewer dollars spent on gas, making an effective tax cut for Americans, and putting that money into

I thought this would be obvious to people. An oil glut means fewer dollars spent on gas, making an effective tax cut for Americans, and putting that money into the economy in a more productive way.

ars 8y ago
The opposite actually. Allowing exports gives a market to that glut, keeping prices in the US higher. Imagine a scenario where the US pumps more oil than we can use - prices would crash (until enough non-profitable production shuts down). Instead we sell the oil, and prices remain higher. They don't go extra high mind you, it's more of a stabilizing influence, keeping prices inline with global prices instead of being extra low in the US, because obviously on a global scale more oil pumped by the US means lower prices (since there's more oil), and oil production is shut down in other parts of the world.
- avar 8y ago
  Give that argument, wouldn't Texas be better off seceding from the rest of the union and not exporting any oil? Practically free energy for all their residents! Of course that would be foolish, they need to import things in return. Similarly, the US is benefiting from importing goods that are cheaper than they otherwise would be, because it's exporting more oil and lowering the market price.
  - ars 8y ago
    I don't think you have to secede from the union to not export oil. Just add some really bureaucratic and complicated zoning for any export pipelines or terminal construction, etc. If there were free energy there people would start energy intensive industry, over time enough demand would go up enough to balance out supply. That's basically what happens in Iceland with alumunium, or Canada with Hydro-Quebec. You can check out their economies to see real-world examples.
    - alacombe 8y ago
      Quebec issue is really a NIMBY syndrome, they have no problem using gas/oil, but they have no problem 1) using Alberta's oil, and 2) getting boatload of (dirty) money from the equalization policy.
      - jeromegv 8y ago
        You were in so much rush to spill some hate on Quebec that you failed to realize that your comment has no relationship with the point that the parent was making. Oil in Quebec has no relationship to the previous comment, the comment was how some energy-intensive industries develop in economies where energy is dirt cheap. What is dirt cheap in Quebec is electricity (made out of water, hydro-electricity), which created the aluminimum industry and lots of data center. How is that any relevant on how Quebec doesn't want to have pipelines?
  - cryptonector 8y ago
    No, because no one would bother to produce oil they could not sell at a profit. There's a lot more to economics and politics than the price of oil anyways.
- Fjolsvith 8y ago
  > The opposite actually. Allowing exports gives a market to that glut, keeping prices in the US higher. Then why are gasoline prices nearly 9% lower than they were last year this time? [1] That's 9% directly into American's pocketbooks. The glut I'm speaking of is the one in the world markets. If US producers have a bigger market, they will produce more oil, which results in, well, more oil. More oil produced from the US will require less oil produced from elsewhere to balance (in the world markets), or there will be a glut. 1. https://ycharts.com/indicators/gas_price https://ycharts.com/indicators/gas_price

I thought this would be obvious to people. An oil glut means fewer dollars spent on gas, making an effective tax cut for Americans, and putting that money into the economy in a more productive way.

ars 8y ago

The opposite actually. Allowing exports gives a market to that glut, keeping prices in the US higher. Imagine a scenario where the US pumps more oil than we can use - prices would crash (until enough non-profitable production shuts down). Instead we sell the oil, and prices remain higher. They don't go extra high mind you, it's more of a stabilizing influence, keeping prices inline with global prices instead of being extra low in the US, because obviously on a global scale more oil pumped by the US means lower prices (since there's more oil), and oil production is shut down in other parts of the world.

avar 8y ago
Give that argument, wouldn't Texas be better off seceding from the rest of the union and not exporting any oil? Practically free energy for all their residents! Of course that would be foolish, they need to import things in return. Similarly, the US is benefiting from importing goods that are cheaper than they otherwise would be, because it's exporting more oil and lowering the market price.
- ars 8y ago
  I don't think you have to secede from the union to not export oil. Just add some really bureaucratic and complicated zoning for any export pipelines or terminal construction, etc. If there were free energy there people would start energy intensive industry, over time enough demand would go up enough to balance out supply. That's basically what happens in Iceland with alumunium, or Canada with Hydro-Quebec. You can check out their economies to see real-world examples.
  - alacombe 8y ago
    Quebec issue is really a NIMBY syndrome, they have no problem using gas/oil, but they have no problem 1) using Alberta's oil, and 2) getting boatload of (dirty) money from the equalization policy.
    - jeromegv 8y ago
      You were in so much rush to spill some hate on Quebec that you failed to realize that your comment has no relationship with the point that the parent was making. Oil in Quebec has no relationship to the previous comment, the comment was how some energy-intensive industries develop in economies where energy is dirt cheap. What is dirt cheap in Quebec is electricity (made out of water, hydro-electricity), which created the aluminimum industry and lots of data center. How is that any relevant on how Quebec doesn't want to have pipelines?
- cryptonector 8y ago
  No, because no one would bother to produce oil they could not sell at a profit. There's a lot more to economics and politics than the price of oil anyways.
Fjolsvith 8y ago
> The opposite actually. Allowing exports gives a market to that glut, keeping prices in the US higher. Then why are gasoline prices nearly 9% lower than they were last year this time? [1] That's 9% directly into American's pocketbooks. The glut I'm speaking of is the one in the world markets. If US producers have a bigger market, they will produce more oil, which results in, well, more oil. More oil produced from the US will require less oil produced from elsewhere to balance (in the world markets), or there will be a glut. 1. https://ycharts.com/indicators/gas_price https://ycharts.com/indicators/gas_price