Donald Trump's energy plan: Regulate less, drill more

[IsailedawayfromFR]

All the rights things are being said.  Wonder if he will come through?

Donald Trump has a simple formula to get America's energy industry back on its feet: regulate less and start drilling a lot more for oil and gas.

In his first in-depth speech about energy policy, Trump on Thursday promised to make American energy "dominance" a strategic economic and foreign policy goal of the U.S.

"America's incredible energy potential remains untapped. It's a wound that is totally self-inflected," Trump said during a speech at a North Dakota oil industry conference.

Trump, who earlier in the day had secured enough delegates to clinch the GOP nomination, warned that Democratic rival Hillary Clinton will make life tougher for the energy industry.

"This is your treasure and you the American people are entitled to share in the riches," Trump said. The event was live-streamed by ValleyNewsLife.com, the NBC and CBS affiliate for Fargo, N.D.

At least in the short term, Trump's plan would be unlikely to solve all of the energy industry's problems. Oil prices crashed as much as 75% over the past two years because of a supply glut caused by too much U.S. drilling, not by overregulation. The same is true with natural gas, which remains at depressed prices.

Pumping a lot more oil could make the U.S. less reliant on foreign oil, but it may also renew the oversupply problem that only recently has started to recede.

Here's what you need to know about Trump's energy plan:

America first: Trump promised that the U.S. will achieve "complete" independence from foreign sources of oil.

"Imagine a world in which our foes and the oil cartels can no longer use energy as a weapon. Wouldn't that be nice?" Trump said, adding that the U.S. is "loaded" in oil and gas resources.

A key Trump adviser, Rep. Kevin Cramer of North Dakota, has co-sponsored a bill that would create a commission to investigate whether OPEC is manipulating oil prices through anti-competitive behavior.

Regulate less:


http://money.cnn.com/2016/05/26/investing/donald-trump-energy-plan/index.html

[sinkspur]

A key Trump adviser, Rep. Kevin Cramer of North Dakota, has co-sponsored a bill that would create a commission to investigate whether OPEC is manipulating oil prices through anti-competitive behavior.

Well, if they are, they're doing a damned poor job of it.  The price of a barrel of oil has dropped 35% in the last year.

This is something I'd expect a Democrat to do.

[Oceander]

Maybe they'll start a price-gouging committee too.  They could call it the House Un-American Pricing Committee.

[montanajoe]

Basic economics says there needs to be a profit motive to encourage drilling. Removing over regulation is certainly a good idea but it wont increase the price of a barrel of oil, nor will drilling a lot more to increase the supply if it can't be sold at a profit. Oil is a fungible worldwide commodity it is economically impossible to drill our way to a recovery in the oil patch at these prices...

[Elderberry]

We need to remove the restrictions on exporting Crude and play the OPEC card of attempting to bankrupt the competition.

It appears that the rest of the world is lying about their oil reserves.

"Where did all the oil go? The peak is back"

"Jefferson’s conclusion is stark: "Put bluntly, the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 875 billion barrels. Thus, despite the fall in crude oil prices from a new peak in June, 2014, after that of July, 2008, the ‘peak oil’ issue remains with us.”


http://www.middleeasteye.net/columns/former-shell-oil-chief-says-global-oil-reserves-overstated-half-1901398787

[Smokin Joe]

Basic economics says there needs to be a profit motive to encourage drilling. Removing over regulation is certainly a good idea but it wont increase the price of a barrel of oil, nor will drilling a lot more to increase the supply if it can't be sold at a profit. Oil is a fungible worldwide commodity it is economically impossible to drill our way to a recovery in the oil patch at these prices...

While removing regulations (and not implementing some of the new ones) won't increase the price of a barrel of oil, it will decrease the cost of extracting that barrel. It may not be intuitive, but the reason drilling cannot proceed economically at current prices is, in part the regulatory burden imposed which increases costs. Remove some of that, and you decrease the price level at which producing American oil becomes profitable enough to pursue.

[IsailedawayfromFR]

Basic economics says there needs to be a profit motive to encourage drilling. Removing over regulation is certainly a good idea but it wont increase the price of a barrel of oil, nor will drilling a lot more to increase the supply if it can't be sold at a profit. Oil is a fungible worldwide commodity it is economically impossible to drill our way to a recovery in the oil patch at these prices...

The selling price is only one part of the equation.  Basic economics is comprised of making additional  profit by selling something at lower cost.

By removing the costs associated with regulations, there is much more profit available at even low crude prices.  Estimates on the amount of over-regulations in the oil patch were as high as 20 to 25% of the costs to produce a barrel the last time I looked.

Also, regulations include barring from drilling some of the most promising places to find oil.  Getting to produce the most prolific areas bring about a lowered capital cost structure per barrel produced, meaning more profit is to be made.  That is also basic economics.

[thackney]

Basic economics says there needs to be a profit motive to encourage drilling. Removing over regulation is certainly a good idea but it wont increase the price of a barrel of oil, nor will drilling a lot more to increase the supply if it can't be sold at a profit. Oil is a fungible worldwide commodity it is economically impossible to drill our way to a recovery in the oil patch at these prices...

Removing regulations lowers the cost to drill and produce a barrel of oil.  Because of that it is basic economics and lowers the price needed for a barrel of oil to be profitable.

[IsailedawayfromFR]

@Smokin Joe  @thackney

In perusing the topics so far on this board, am thinking that the whole sub-board should be contained in Economy and Business instead of Science and Technology.

Seems most topics are related to economic issues which impact economy.  Should solicit more robust reading as it is a more active board?

[thackney]

@Smokin Joe  @thackney

In perusing the topics so far on this board, am thinking that the whole sub-board should be contained in Economy and Business instead of Science and Technology.

Seems most topics are related to economic issues which impact economy.  Should solicit more robust reading as it is a more active board?

I've thought all along the energy topics were more business than science.

My 2¢, there are too many topic sections.  I would rather see keywords, hashtags, etc. for topics.

[montanajoe]

Removing regulations lowers the cost to drill and produce a barrel of oil.  Because of that it is basic economics and lowers the price needed for a barrel of oil to be profitable.

Do you have any solid numbers on what percentage of the cost of production is attributable to government regulations? Then I suppose there would be a question as to what is attributable to regulation and what is the price to bring in a well. eg are noise and flaring restrictions governments regulations that could be done away with or are they just a modern cost of production?

[thackney]

Do you have any solid numbers on what percentage of the cost of production is attributable to government regulations? Then I suppose there would be a question as to what is attributable to regulation and what is the price to bring in a well. eg are noise and flaring restrictions governments regulations that could be done away with or are they just a modern cost of production?

No, I know of no company that publishes a breakdown of oil production cost increases due to government regulation.  Nor have I seen any other company of any industry do so either.

Are you really trying to argue against government excessive regulation do not inflate the cost of doing business?

[Weird Tolkienish Figure]

Oil prices will rebound, it's inevitable. You have over 2 billion people entering into the worldwide middle class in China and India.

Oil will be a huge part of that, one way or the other.

[montanajoe]

No, I know of no company that publishes a breakdown of oil production cost increases due to government regulation.  Nor have I seen any other company of any industry do so either.

Are you really trying to argue against government excessive regulation do not inflate the cost of doing business?

No not at all, obviously excessive regulation inflates the cost of doing business. I'm just not one of those that accepts at face value arguments that aren't backed up by facts. I was hoping you had ran across some actual numbers in all the excellent research you do.

[IsailedawayfromFR]

Do you have any solid numbers on what percentage of the cost of production is attributable to government regulations? Then I suppose there would be a question as to what is attributable to regulation and what is the price to bring in a well. eg are noise and flaring restrictions governments regulations that could be done away with or are they just a modern cost of production?

Not comprehensive, but the George Marshall Institute sometimes speaks to this issue. http://marshall.org/energy-policy/

In a nutshell, it says federal regulations are increasingly costly.  An example is this report of a coalition of Western producers which bring up the fact that the EPA's regulations are a staggering five fold increase in compliance costs compared to the next most costly agency.   
http://www.westernenergyalliance.org/knowledge-center/regulatory

Duplicate and overlapping regulations are surmised to add costs unfairly that are unnecessary.   Once can easily make the case that this cost should be essentially zero, as the states already undertake this regulation of industry, including the ability to do so for federal lands within that state.

It is not untrivial that the EPA was created by Executive Order and only later came about with some Congressional direction.

[Weird Tolkienish Figure]

Federal regulations are completely unnecessary for oil production. States and local government can handle the job just fine.

Liberals scream when I state the first sentence (OMG what about the environment?!?!). I answer that it's covered by my second sentence.

[IsailedawayfromFR]

Federal regulations are completely unnecessary for oil production. States and local government can handle the job just fine.

Liberals scream when I state the first sentence (OMG what about the environment?!?!). I answer that it's covered by my second sentence.

I love to hear liberals scream.  Means the Constitution is being effective.

The #1 issue in this country, other than religious rights and crippling abortion, is the preservation of states' rights, like the Founders envisioned when they drew up that miraculous document called the US Constitution.  We actually fought a war over that issue, although many would deny that and say it was against slavery.

[Weird Tolkienish Figure]

I love to hear liberals scream.  Means the Constitution is being effective.

The #1 issue in this country, other than religious rights and crippling abortion, is the preservation of states' rights, like the Founders envisioned when they drew up that miraculous document called the US Constitution.  We actually fought a war over that issue, although many would deny that and say it was against slavery.

Only way I could see it being necessary to get the Feds involved is if somehow two states were feuding on regulations, or if one state was polluting another state. Then they might be necessary.

Just MO.

[montanajoe]

Federal regulations are completely unnecessary for oil production. States and local government can handle the job just fine.

Liberals scream when I state the first sentence (OMG what about the environment?!?!). I answer that it's covered by my second sentence.

Not trying to be argumentative but the USSC says regulations regarding oil (like other commodities) are constitutional under the Commerce Clause and are specifically authorized since the Interstate Commerce Act of 1887.  Whatever ones personal view of regulations are they are not going away...

[Weird Tolkienish Figure]

Not trying to be argumentative but the USSC says regulations regarding oil (like other commodities) are constitutional under the Commerce Clause and are specifically authorized since the Interstate Commerce Act of 1887.  Whatever ones personal view of regulations are they are not going away...

Constitutional does not mean necessary. And yes, deregulating oil production at the federal level is essentially impossible to achieve politically.

My point is that deregulation does not necessarily mean you are in favor of unfettered rape of nature. Quite the contrary. I fully believe we should be stewards of the environment. Federalizing regulations, IMO, is not the best way to go about things. States might be the better avenue for regulations, since they may understand their local environment better.

[IsailedawayfromFR]

Constitutional does not mean necessary. And yes, deregulating oil production at the federal level is essentially impossible to achieve politically.

Why?  Politically, the citizens of this country have allowed the federal govt to subvert states' rights.

Are you trying to say that the Constitution is not be to be followed as the Founders intended?

To me, it would be easy for a state, such as Texas where I live, to just say 'Go Away' if some federal bureaucrat tried to enforce an edict that my state believes has no basis in the law established by the US Constitution.  This goes for oil regulation, environmental or abortion.

This is worth fighting for, and what are the federal bureaucrats going to do anyway?  Try to arrest our governor?  I'd like to see them try to do that, as there would be a 100,000 armed citizens waiting at the Governor's mansion in Austin.

[Weird Tolkienish Figure]

Why?  Politically, the citizens of this country have allowed the federal govt to subvert states' rights.

Are you trying to say that the Constitution is not be to be followed as the Founders intended?

To me, it would be easy for a state, such as Texas where I live, to just say 'Go Away' if some federal bureaucrat tried to enforce an edict that my state believes has no basis in the law established by the US Constitution.  This goes for oil regulation, environmental or abortion.

This is worth fighting for, and what are the federal bureaucrats going to do anyway?  Try to arrest our governor?  I'd like to see them try to do that, as there would be a 100,000 armed citizens waiting at the Governor's mansion in Austin.

Welp, from what I saw nearly 55% of Americans would vote for Bernie Sanders. If you think that deregulating oil drilling is feasible with those numbers...

[IsailedawayfromFR]

Welp, from what I saw nearly 55% of Americans would vote for Bernie Sanders. If you think that deregulating oil drilling is feasible with those numbers...

Believe me, 55% of Texans will not vote for Bernie.

And that is what is important, not what some Oregon or Vermont native may wish.

[montanajoe]

Are you trying to say that the Constitution is not be to be followed as the Founders intended?

Actually regulation of commerce between the states is exactly what the founders intended. Thats why they wrote Article I Section VIII into the Constitution. One of the driving factors behind the Constitutional Convention was the fact that the Articles of the Confederation was silent on the issue. What one state decides is is its best interest might be very much against the interests of an adjoining state and that is what the Founders addressed Commerce in the Constitution.

Clearly Federal regulation has run amok, thats a problem with our voters and political leadership, not with the Constitution....

[IsailedawayfromFR]

Actually regulation of commerce between the states is exactly what the founders intended. Thats why they wrote Article I Section VIII into the Constitution. One of the driving factors behind the Constitutional Convention was the fact that the Articles of the Confederation was silent on the issue. What one state decides is is its best interest might be very much against the interests of an adjoining state and that is what the Founders addressed in the Constitution.

Clearly Federal regulation has run amok, thats a problem with our voters and political leadership, not with the Constitution....

You are describing exactly what is wrong at present. No where in the Constitution can it possibly be inferred that a well drilled and completed in one state can be regulated by the federal govt.  That is exclusively the domain of the individual state, which is stated in the 10th Amendment.

Where do you see it otherwise in the Constitution?  I am curious on the extrapolation that you have made that this is 'Commerce between the States'.