US-we are a conquering nation

[Coolville]

I found this today.... it might be old and people have seen it before, but i liked it and wanted to share....

-----------
Bush's anthem... (sung to 'If you're Happy and you Know it')

If you cannot find Osama, bomb Iraq.
If the markets are a drama, bomb Iraq.
If the terrorists are frisky,
Pakistan is looking shifty,
North Korea is too risky,
Bomb Iraq.

Quality satire, ducky! Cheers!

 

[Tungwagger]

A viable threat?? .... and that would be that those fucking Arabs don't deserve that oil and we should use it for them to keep the world economy stable.

Mind you, a good war is a great way to boost the money bags of the rich industrialists in the US so some of it may trickle down to you, but don't hold your breath.

Uh oh....sounds like Redwave has an alter-ego......

 

[Problem Child]

Re: Re: Re: Re: Oh, and about the oil angle...

It's called the "Strategic Oil Reserves."

The philosophy is to use other nations oil reserves in times of peace, and maintain our oil fields in reserve for times of war when access to imports is unreliable or restricted. I think it's something like 60% of US oil producing capacity is allocated to the Strategic Oil Reserves.

I'm a little confused as to what you're saying here Harold.

The strategic petroleum reserves isn't composed of capped oil wells, it is are a group of salt domes along the Texas coast that are physically filled from both foreign and domestic oil sources.

I think you're roughly right about the percentage of domestic production that goes into the spr, but the reason oil wells are not in production in the U.S. isn't because they're part of the SPR, it's because of foreign competition.

 

[Weird Harold]

I'm a little confused as to what you're saying here Harold.

The strategic petroleum reserves isn't composed of capped oil wells, it is are a group of salt domes along the Texas coast that are physically filled from both foreign and domestic oil sources.

I think you're roughly right about the percentage of domestic production that goes into the spr, but the reason oil wells are not in production in the U.S. isn't because they're part of the SPR, it's because of foreign competition.

I'm sure that some are capped because of economics, but many are capped as part of the strategic reserve. The salt domes you mention are only part of the strategic reserve -- the part directly controlled by the government/military.

It's been some time since I read up on the details, but as I understand it, part of the Strategic Oil Reserve is similar to the farm subsidy that pays farmers for not growing certin crops; The government "buys" the oil still in the ground and pays the company to NOT pump it out. Cheaper in the long run than pumping it from one hole in the ground just to pump it into another.

 

[Coolville]

I think there are several here that know more about military matters than me.

Another way of saying that you actually have a life.

 

[Problem Child]

I'm sure that some are capped because of economics, but many are capped as part of the strategic reserve. The salt domes you mention are only part of the strategic reserve -- the part directly controlled by the government/military.

It's been some time since I read up on the details, but as I understand it, part of the Strategic Oil Reserve is similar to the farm subsidy that pays farmers for not growing certin crops; The government "buys" the oil still in the ground and pays the company to NOT pump it out. Cheaper in the long run than pumping it from one hole in the ground just to pump it into another.

I'm by no means an expert on oil economics, so I'll buy that as an explanation for part of the shut downs, but I still think that the main reason is that while some of the wells have just gone dry, many of them are just not economically viable anymore. As the price of crude goes up, some will start pumping again if they can pay for themselves.

The Texas and Oklahoma oil business has been depressed for a long while now (since the early eighties?). It seems to me that if the oil companies were really making money from domestic crude they would be pumping it instead of taking a payoff from the government, a lot like if farmers could still make money farming they would instead of taking the subsidies.

I know the reasons for government involvement are different (farm prices suck vs. national security) but friends I have in Texas tell me the oil boom there has been over for a long time.

Maybe someone who works in the industry will pipe up and give us the skinny.

 

[Weird Harold]

The Texas and Oklahoma oil business has been depressed for a long while now (since the early eighties?). ...

I know the reasons for government involvement are different (farm prices suck vs. national security) but friends I have in Texas tell me the oil boom there has been over for a long time.

Some definitive opinions from somone close to the business would help.

The Texas and Oklahoma oil boom has been over since the fifties/sixties -- with a brief resurgance during the oil embargo in the 70's.

There isn't as much difference in farm subsidies and oil subsidies as youmight think -- the justifiction for farm subsidies is to keep the land available for farming (instead of letting it get paved) in the case of problems importing food; ie farm subsidies are also a "strategic reserve" in case of war or trade disagreements.

 

[Problem Child]

Another question for you Harold, if you're still interested:

You say 60% of domestic production goes to the SPR, and I glossed over it at first, but then did some math-

We pump about 7.7 million barrels of oil a day in the U.S.

60% of 7.7 M is 4.62M bbls.

Our strategic reserve is now at 600M bbls

600/4.62 = 129 days. Theoretically we could fill the SPR in 129 days if we're using 60% of our domestic production to fill it.

I think the last time we used the SPR was the last gulf war if I'm correct, and theoretically we've been replenishing it since then, and not using it, no?

If my numbers above are correct, how can 60% of our output possibly be going to the SPR?

6% I could see, but 60%? Doesn't make sense.

 

[Problem Child]

There isn't as much difference in farm subsidies and oil subsidies as youmight think -- the justifiction for farm subsidies is to keep the land available for farming (instead of letting it get paved) in the case of problems importing food; ie farm subsidies are also a "strategic reserve" in case of war or trade disagreements.

Wow, I've never heard that, and I've worked in ag or ag-related businesses most of my life and have many farmer friends. Farm subsidies are designed to boost farm prices. That's why they're called price supports. They don't have anything to do with keeping land from being paved as far as I know.

Programs like PIK (payment in kind) take land out of production, but it's not to keep it from being paved, it's to artificially raise prices.

You got me baffled on that one.

 

[Weird Harold]

Another question for you Harold, if you're still interested:

You say 60% of domestic production goes to the SPR, and I glossed over it at first, but then did some math-

We pump about 7.7 million barrels of oil a day in the U.S.

60% of 7.7 M is 4.62M bbls.

Our strategic reserve is now at 600M bbls

I've been doing a bit of refresher work with google.

The current estimate from the DOE website is that we will have the Strategic Petroleum Reserve facilities full (700 MIllion Barrels) by 2005, using "royalties in kind" oil from offshore producers.

That is the statistics on the "Strategic Petroleum Reserve" which is a specific progrm and facility established in 1977.

The principle of Strategic Oil Reserves dates back to the oil policies of the FDR administration before and during WWII and involves subsidies and tax breaks/penalties for producing domestic oil above certain levels, and is separate from the SPR.

The 60% figure was off the top of my head and may well be wildly inaccurate. The target for preserving US oil supplies by using imported oil by preference was somewhere in that ballpark during the Vietnam/Nixon era discussions on creating an explicit strategic reserve-- how much politics and world economics has changed that figure I really don't know.

PS: The 60% figure applies to Domestic Oil prodution not "reserves" per se. The idea is/was to limit US Domestic production to a percentage of the theoretical maximum while maintaining enough expertise and infrastructure to scale up to full production as necessary.

 

[Nora]

Wow, I've never heard that, and I've worked in ag or ag-related businesses most of my life and have many farmer friends. Farm subsidies are designed to boost farm prices. That's why they're called price supports. They don't have anything to do with keeping land from being paved as far as I know.

Programs like PIK (payment in kind) take land out of production, but it's not to keep it from being paved, it's to artificially raise prices.

You got me baffled on that one.

<brief hijack>

I didn't know that, PC. I'm also in an ag-related business. Neat!

</hijack>

 

[Weird Harold]

Farm subsidies are designed to boost farm prices. That's why they're called price supports. They don't have anything to do with keeping land from being paved as far as I know.

You're missing the distinction between the effect and the justification. It's not legal for the government to tamper with the free market -- it is legal for the government to do things for "strategic purposes"

Much of the justification can be found only by reading various histories of the debates over the "New Deal" policies and provisions of the FDR administration, and debates about Nixon's price control efforts during the Vietnam era (when the current incarnation of farm subsidies were basically established.)

 

[Problem Child]

I've been doing a bit of refresher work with google.

The current estimate from the DOE website is that we will have the Strategic Petroleum Reserve facilities full (700 MIllion Barrels) by 2005, using "royalties in kind" oil from offshore producers.

That is the statistics on the "Strategic Petroleum Reserve" which is a specific progrm and facility established in 1977.

The principle of Strategic Oil Reserves dates back to the oil policies of the FDR administration before and during WWII and involves subsidies and tax breaks/penalties for producing domestic oil above certain levels, and is separate from the SPR.

The 60% figure was off the top of my head and may well be wildly inaccurate. The target for preserving US oil supplies by using imported oil by preference was somewhere in that ballpark during the Vietnam/Nixon era discussions on creating an explicit strategic reserve-- how much politics and world economics has changed that figure I really don't know.

PS: The 60% figure applies to Domestic Oil prodution not "reserves" per se. The idea is/was to limit US Domestic production to a percentage of the theoretical maximum while maintaining enough expertise and infrastructure to scale up to full production as necessary.

Ah, thank you. I didn't know that strategic oil reserve and strategic petroleum reserve were two different programs.

I think the 60% figure must be wrong. That's a shit load of oil to have in reserve, especially over the period of time since the gulf war. 1 billion, 680 million barrels per year, times 12 years = 20 billion 235 million barrels! That would take a hell of a salt dome to store.

 

[Problem Child]

You're missing the distinction between the effect and the justification. It's not legal for the government to tamper with the free market -- it is legal for the government to do things for "strategic purposes"

Much of the justification can be found only by reading various histories of the debates over the "New Deal" policies and provisions of the FDR administration, and debates about Nixon's price control efforts during the Vietnam era (when the current incarnation of farm subsidies were basically established.)

Well, I can see the effect of the subsidies being that farmers stay on the farm and their land doesn't get paved, but I've never heard that used as a justification, even in ag econ class way back when.

I'll take your word for the historic aspect of it, but if I go ask any farmer why he gets a subsidy check he'll say it's because that's the only way he can stay on the land.

And...I know, that's the whole point, right?

 

[Weird Harold]

Ah, thank you. I didn't know that strategic oil reserve and strategic petroleum reserve were two different programs.

I think the 60% figure must be wrong. That's a shit load of oil to have in reserve, especially over the period of time since the gulf war. 1 billion, 680 million barrels per year, times 12 years = 20 billion 235 million barrels! That would take a hell of a salt dome to store.

I'm not even sure that the "strategic oil reserve" is as much a "program" as it is a "policy" and not even an explicit policy at that. It was discussed prior to the 1977 establishment of the SPR as something that should be official policy, but I haven't found anything that specifically says it's policy.

What prompted the creation of the SPR was the delay in bringing capped wells back online during the oil embargo. It's purpose is tto have a "ready reserve" of petroleum that can be quickly injected into the oil market to control price fluctuations and fill in during the delay of uncapping our reserve production capacity.

The 60% figure is oil that is NOT being pumped, rather than oil that is being "stored" and dates from long before the Gulf War and Oil Embargo.

 

[Problem Child]

Okay thanks, that makes much more sense.

 

[Weird Harold]

I'll take your word for the historic aspect of it, but if I go ask any farmer why he gets a subsidy check he'll say it's because that's the only way he can stay on the land.

And...I know, that's the whole point, right?

Part of the historical aspect comes from Confgressional debates on doing way with the Farm Subsidies a few years ago, although the comparison to oil policies came from a book on the history of the oil industry in the US during WWII.

 

[Weird Harold]

Okay thanks, that makes much more sense.

Finally! I'm usually better at explaining things than this. It must be getting too close to my nap time.

Oddly enough, a lot of what I know about this comes from an interest in Black History and the background explanations of the political maneuverings that affected blacks.

 

[Problem Child]

Finally! I'm usually better at explaining things than this. It must be getting too close to my nap time.

Oddly enough, a lot of what I know about this comes from an interest in Black History and the background explanations of the political maneuverings that affected blacks.

Well, you just had the 60% thing reversed, no biggie.

Your explanation of farm subsidies is very interesting though. I'll have to look for a book on it next time I'm shopping for reading material. Like I alluded to, they either glossed over it in college ag econ 101, or I missed class that day sleeping off a hangover.

Probably the second.

 

[Don K Dyck]

Hey Harold, PC . . . great discussion, very informative . . . thanks

 

[Problem Child]

Hey Harold, PC . . . great discussion, very informative . . . thanks

Thank Harold. I didn't do anything but ask a bunch of questions.

 

[bluespoke]

I've nothing to add to the discussion but I just wanted to say, thanks guys for a quality discussion. Adults debating without the flaming.

Thanks, this is good stuff!

 

[Azwed]

My dad was a petrogeolgist for many years and, along with a partner, even owned his own prospecting company for a few years.

He could probably right a dissertation on this whole thing but I will try and dredge up what I remember about the industry when we lived in Texas.

The last time the reserves we keep in the salt domes was used was by clinton in the winter of 99-2000 to lower oil prices when they spiked.

I know the first year that my dad went out with his partner and started his own business he went from making 50,000 or so a year to over a 100,000. This was around 82-83 or so. We stayed in Texas till 1990 and had been living off our savings for about two years probably. The hope was that the market would go back to about its pre-1987 levels but it never did so we bailed and moved to VA.

There is still a lot of oil in the states, there are filing cabinets worth of gelogical maps and surveys in my garage to prove it, but most of it is not economicaly viable right now.

My family and my dad's partners family still own the rights to several different oil fields that never went beyond the estimation stage. There is oil in these fields but the oil is either too deep to drill for at the current price or there is not enough oil in the field to justify putting up a rig.

I actually wouldn't mind if oil prices doubled because it would probably finaly make these oil fields viable and maybe my mom, sister and me could finaly get out of debt.