catfish wrote:
"$110/bbl oil cuts off the Trump economic recovery at the knees.
This thing better be over in a few weeks, or it is going to get very ugly politically, and soon."
It's time for Mr. Trump to take action (not sure where his authority extends on this, if at all) to "sever" and "insulate" the American petroleum markets (all petroleum produced from inside the borders of the USA, and perhaps Canada as well) from "the rest" of the world market.
Cut it off.
Build "a wall".
But ... do something.
If the American oil market can be severed from the rest of the world, we will see prices (here) fall back towards "normal".
I realize you're going to reply that "petroleum is a fungible product".
But that's only because we ALLOW it to be so.
That can be controlled, if we want to do it.
So... DO IT.
After all, we are now "self-sufficient" in petroleum, are we not?
Isn't that what we've been told for a while, now?
If not, set me straight.
As for the rest of the world -- Europe, the far east -- let them deal with things on their own.
But for now -- don't ship them ANY American oil products. Let them sink or swim on their own.
If they want the oil flowing again, then it's time to "get on our boat", or swim away at their own peril.
Sorry if you don't care for this reply.
(but... this is WAR, and such times require wartime measures...)
I could make this a 20 page response, but I'll keep it simple....hydrocarbon self sufficiency is not a one dimensional process.... it is a multi-step and faceted process that for all practical purposes is impossible to dominate....at every facet.
1. Training and hiring the best geologist and other scientist
2. Possessing best in class technology to find the stuff, including protect that technology via patent and other means.
3. Hiring and retaining the "rough necks" who are critical in EFFICIENTLY building the hardware to extract the oil safely
4. Having collection and distribution systems, pipe rail, ship that can be best in class efficency
5. Adequate refining capacity, and have the technological advantages to process each Carbon faction at its utmost cost effectiveness, including those factions destined for Chemical plant
6. Part 2 of distribution of products be it, LNG, LPG, ethylene, propylene, butene isomers, Aromatic fraction (Bz, Tl,etc), all the . Marketway to heavys like asphalt and tar.
7. Marketing from anywhere from a milk carton, a gas cylinder for your BBQ pit, gas for your car...again to the tar you use for roads.
8. And side processes in distribution for ships, barges over seas, and to pipeage in land.,
The reason I am going into this levels of detail, is there are also side processes which are ancillary to the move of hydrocarbon.... From havitng really good maintenance folks, to keeping it running, to people like me who had to navigate the regulatory largess of what is the most regulated business in the country. Then add the fact each and every country has its own rules,... transportation, safety, environmental etc.
The point is these 8 also have at least a 100 subsets to manage in its own regard. And finally, and maybe the most important factoid in the US oil industry. Back when I was working, what was considered to be a large refinery was about 300K bbl/day. Did you know that there are only 15 of those in the entire country? AND 90% of the expanded capacity since I quit workiing has been in the form of expansions. That because under the present regulatory climate it is literally impossible to build a new grass roots refinery. The permitting process kills any thought of that.
Plus, I hope you realize that there is not only competition within likes of Chevron, Exxon, Valero, etc. There are others world wide who do some of the 8 things better than we do. So when I hear Trump use that term and Drill Baby Drill, I cringe, because it is a hell of lot more complicated than that
