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The Global Effects of Falling [Oil Prices] - OPEC tentatively agreed to cut production

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    DevoutlyApatheticDevoutlyApathetic Registered User regular
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    Nod. Get treat. PSN: Quippish
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    tinwhiskerstinwhiskers Registered User regular
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    So we can engage in an oil war with Iran. Except I'd expect that there is actually a greater benefit to the US from domestic prices being slightly lower, than whatever value we'd get exporting, and whatever our exporting would do to spike Iran's wheel.

    As it is if Iran starts to ramp its production back up its going to have a hell of a time actually making any money on the stuff since the price is so low already and they'll just drive it downward.

    6ylyzxlir2dz.png
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    DevoutlyApatheticDevoutlyApathetic Registered User regular
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    So we can engage in an oil war with Iran. Except I'd expect that there is actually a greater benefit to the US from domestic prices being slightly lower, than whatever value we'd get exporting, and whatever our exporting would do to spike Iran's wheel.

    As it is if Iran starts to ramp its production back up its going to have a hell of a time actually making any money on the stuff since the price is so low already and they'll just drive it downward.

    Don't we still import a few million barrels a day? Until we go oil positive we're still connected to the world pricing market and it's still a commodity.

    I may be missing something here.

    Nod. Get treat. PSN: Quippish
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    PhyphorPhyphor Building Planet Busters Tasting FruitRegistered User regular
    edited July 2015
    If US oil can be produced at a lower average cost than the global oil supply, and global oil prices are higher, local producers will tend to export instead and more will be imported, which will change the price, but only slightly

    Phyphor on
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    The EnderThe Ender Registered User regular
    So, like, I grew up in a place whose conservative government hedged it's entire financial future on oil prices remaining high forever. And the higher the oil price got, the more the province hedged. Have a really good year? Send everyone in the province a $500.00 check. No, really. That actually happened. I'm pretty sure I bought one of my Gameboy systems with my check.

    In fact I think it happened more than once, but I wasn't there for any of the other 'let's do a retarded thing with our treasury money' subsidies (yes, even from a political standpoint, it was a dumb idea. The conservatives were always a voter shoe-in, so long as King Ralph was in power anyway).


    Said place just finished voting in a socialist government, which is now going to try and fix all of the horrific damage that was done by going all in on black.


    Of course, the oil price will see an upward correction at some yet-to-be-determined time, because commodities always violently fluctuate in value, which is why you don't want to do things like tie your currency or economy to one commodity that seems really lucrative in the here and now.

    With Love and Courage
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    DoodmannDoodmann Registered User regular
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Whippy wrote: »
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    The EnderThe Ender Registered User regular
    Doodmann wrote: »
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Crude oil prices and gasoline prices are not really linked together as neatly as you might think.

    With Love and Courage
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    KiplingKipling Registered User regular
    edited July 2015
    Oil refineries want high uptime to maintain what are crappy margins when everyone is running optimally. So if a plant has an incident that causes a fire, supply is constrained and they make more profit then. This is worse in California, which requires a gasoline that other refineries cannot easily switch over to. To switch and get on the profit, you need to shutdown, but you want high uptime. So you switch and gain market share for the short term, But you lose out long term because either eventual oversupply will make your plant unprofitable or you eat the cost of downtime to switch back. There has never been financial motivation for refineries to equilibrate market shocks in California.

    This same local supply/demand effect helped the U.S. for years before because Brent was selling at a premium in comparison to WTI (West Texas Intermediate). WTI had more supply because of the fracking boom in the U.S. so WTI sold at a discount.

    The reason crude oil is so low right now is that the Saudis and the rest of the OPEC nations refuse to reduce supply to support high oil prices because none of them are willing to give up market share. Saudi Arabia has no reason to help American frackers profit by pushing oil prices higher unless the math works in their favor.

    Kipling on
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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    The Ender wrote: »
    So, like, I grew up in a place whose conservative government hedged it's entire financial future on oil prices remaining high forever. And the higher the oil price got, the more the province hedged. Have a really good year? Send everyone in the province a $500.00 check. No, really. That actually happened. I'm pretty sure I bought one of my Gameboy systems with my check.

    In fact I think it happened more than once, but I wasn't there for any of the other 'let's do a retarded thing with our treasury money' subsidies (yes, even from a political standpoint, it was a dumb idea. The conservatives were always a voter shoe-in, so long as King Ralph was in power anyway).


    Said place just finished voting in a socialist government, which is now going to try and fix all of the horrific damage that was done by going all in on black.


    Of course, the oil price will see an upward correction at some yet-to-be-determined time, because commodities always violently fluctuate in value, which is why you don't want to do things like tie your currency or economy to one commodity that seems really lucrative in the here and now.

    Well, Russia is really taking a beating from the current market for basically this reason.

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    JragghenJragghen Registered User regular
    The Ender wrote: »
    Doodmann wrote: »
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Crude oil prices and gasoline prices are not really linked together as neatly as you might think.

    Well, California's a special case. We have higher standards than most other parts of the country in terms of how many pollutants can be in our gasoline, so gasoline sold in CA is pretty much only refined in CA. That being said, this higher cost (and the tax situation) usually translated to CA being 20-30 cents more per gallon than the national average. This year, we've been paying about a buck more than the rest of the country. There was a refinery explosion and then a strike, which caused a boost early in the year, but as oil prices continued to drop, the gas companies have just.....left the prices high. I think there's a lawsuit going on right now over alleged price fixing.

    Here's an article from back in March on it, and here's another one from this month, continuing to claim refinery issues.

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    The EnderThe Ender Registered User regular
    The Ender wrote: »
    So, like, I grew up in a place whose conservative government hedged it's entire financial future on oil prices remaining high forever. And the higher the oil price got, the more the province hedged. Have a really good year? Send everyone in the province a $500.00 check. No, really. That actually happened. I'm pretty sure I bought one of my Gameboy systems with my check.

    In fact I think it happened more than once, but I wasn't there for any of the other 'let's do a retarded thing with our treasury money' subsidies (yes, even from a political standpoint, it was a dumb idea. The conservatives were always a voter shoe-in, so long as King Ralph was in power anyway).


    Said place just finished voting in a socialist government, which is now going to try and fix all of the horrific damage that was done by going all in on black.


    Of course, the oil price will see an upward correction at some yet-to-be-determined time, because commodities always violently fluctuate in value, which is why you don't want to do things like tie your currency or economy to one commodity that seems really lucrative in the here and now.

    Well, Russia is really taking a beating from the current market for basically this reason.

    It would've been interesting to see what happened to Venezuela's economy if it hadn't already imploded. The current price drop really would've set the record straight as to whether or not the country was as dependent on petro dollars as critics claimed, or whether the planned economy was as robust & sound as it's supporters claimed.

    With Love and Courage
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    PhyphorPhyphor Building Planet Busters Tasting FruitRegistered User regular
    The Ender wrote: »
    Doodmann wrote: »
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Crude oil prices and gasoline prices are not really linked together as neatly as you might think.

    Also stop complaining

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    tinwhiskerstinwhiskers Registered User regular
    The Ender wrote: »
    The Ender wrote: »
    So, like, I grew up in a place whose conservative government hedged it's entire financial future on oil prices remaining high forever. And the higher the oil price got, the more the province hedged. Have a really good year? Send everyone in the province a $500.00 check. No, really. That actually happened. I'm pretty sure I bought one of my Gameboy systems with my check.

    In fact I think it happened more than once, but I wasn't there for any of the other 'let's do a retarded thing with our treasury money' subsidies (yes, even from a political standpoint, it was a dumb idea. The conservatives were always a voter shoe-in, so long as King Ralph was in power anyway).


    Said place just finished voting in a socialist government, which is now going to try and fix all of the horrific damage that was done by going all in on black.


    Of course, the oil price will see an upward correction at some yet-to-be-determined time, because commodities always violently fluctuate in value, which is why you don't want to do things like tie your currency or economy to one commodity that seems really lucrative in the here and now.

    Well, Russia is really taking a beating from the current market for basically this reason.

    It would've been interesting to see what happened to Venezuela's economy if it hadn't already imploded. The current price drop really would've set the record straight as to whether or not the country was as dependent on petro dollars as critics claimed, or whether the planned economy was as robust & sound as it's supporters claimed.

    That it didn't survive the price drop down to $80 answered that pretty convincingly.

    And part of the reason it collapsed was that PDVSA's output kept falling and its costs kept going up. "Run off all the major oil companies, chase as many experienced engineers out of the country as possible, and replace each with 2-3 unqualified political appointees" while a good plan for unemployment is a poor plan for actually running oil wells and refineries. When they had the massive refinery explosion a few years back it came out that they were doing only something like 20% of all planned maintenance shutdowns.

    6ylyzxlir2dz.png
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    ElJeffeElJeffe Not actually a mod. Roaming the streets, waving his gun around.Moderator, ClubPA mod
    edited July 2015
    Is there any
    Phyphor wrote: »
    The Ender wrote: »
    Doodmann wrote: »
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Crude oil prices and gasoline prices are not really linked together as neatly as you might think.

    Also stop complaining

    Yes, because the fact that your gasoline expenses went up by a hundred bucks a month is made irrelevant by higher gas prices in other countries with actual functioning public transit systems.

    And hey you, person who just lost his leg in an industrial accident! Stop whining, because someone somewhere just lost two legs!

    ElJeffe on
    I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
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    The EnderThe Ender Registered User regular
    Jragghen wrote: »
    The Ender wrote: »
    Doodmann wrote: »
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Crude oil prices and gasoline prices are not really linked together as neatly as you might think.

    Well, California's a special case. We have higher standards than most other parts of the country in terms of how many pollutants can be in our gasoline, so gasoline sold in CA is pretty much only refined in CA. That being said, this higher cost (and the tax situation) usually translated to CA being 20-30 cents more per gallon than the national average. This year, we've been paying about a buck more than the rest of the country. There was a refinery explosion and then a strike, which caused a boost early in the year, but as oil prices continued to drop, the gas companies have just.....left the prices high. I think there's a lawsuit going on right now over alleged price fixing.

    Here's an article from back in March on it, and here's another one from this month, continuing to claim refinery issues.

    That is interesting, but as the one article you linked explains, most of the price movement is likely due to gas being bought on the future's market to make-up for supply shortages.


    i really hope that if there is a lawsuit, whatever advocacy group is bringing it forward has done their homework first. Chevron fucking loves to gloat about all of the lawsuits it wins or settles favorably against, and we really don't need another load of that crap.

    With Love and Courage
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    XaquinXaquin Right behind you!Registered User regular
    gas prices are weird

    they went down 20 cents yesterday

    and back up 5 cents this morning

    (they were not discount days either)

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    rhylithrhylith Death Rabbits HoustonRegistered User regular
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    So we can engage in an oil war with Iran. Except I'd expect that there is actually a greater benefit to the US from domestic prices being slightly lower, than whatever value we'd get exporting, and whatever our exporting would do to spike Iran's wheel.

    As it is if Iran starts to ramp its production back up its going to have a hell of a time actually making any money on the stuff since the price is so low already and they'll just drive it downward.

    Don't we still import a few million barrels a day? Until we go oil positive we're still connected to the world pricing market and it's still a commodity.

    I may be missing something here.

    There's basically a loophole around the export ban via "stabilized condensate" anyway. Unstabilized condensate is a hydrocarbon liquid mix that is also extracted during natural gas drilling, containing a wide range of hydrocarbons from ethane to C30+. It's basically a light crude. Boil off some light ends (basically through Butane) in a single column to meet a vapor pressure requirement and it's legal to export the column bottoms.

    Of course, you have to build facilities to do the stabilization. But they're cheap (well by oil industry standards) and modular and easy enough to operate.

    Still seems pretty weird that it's allowed when we're importing but I guess I shouldn't complain seeing as I'm designing a stabilizer right now.

    Oh, and the oil price we see is for a benchmark crude. Different regions produce different quality crudes that sell for different amounts. The U.S. companies probably want to export because our crude is generally light and sweet (lower sulfur), and therefore on the high end of the price. Meanwhile, before our production ramped into the stratosphere we converted a bunch of our refineries to process the nasty stuff so we might actually need some of the heavy, sulfur rich stuff from say, Venezuela for example, to keep them running optimally on their current design.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    rhylith wrote: »
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    So we can engage in an oil war with Iran. Except I'd expect that there is actually a greater benefit to the US from domestic prices being slightly lower, than whatever value we'd get exporting, and whatever our exporting would do to spike Iran's wheel.

    As it is if Iran starts to ramp its production back up its going to have a hell of a time actually making any money on the stuff since the price is so low already and they'll just drive it downward.

    Don't we still import a few million barrels a day? Until we go oil positive we're still connected to the world pricing market and it's still a commodity.

    I may be missing something here.

    There's basically a loophole around the export ban via "stabilized condensate" anyway. Unstabilized condensate is a hydrocarbon liquid mix that is also extracted during natural gas drilling, containing a wide range of hydrocarbons from ethane to C30+. It's basically a light crude. Boil off some light ends (basically through Butane) in a single column to meet a vapor pressure requirement and it's legal to export the column bottoms.

    Of course, you have to build facilities to do the stabilization. But they're cheap (well by oil industry standards) and modular and easy enough to operate.

    Still seems pretty weird that it's allowed when we're importing but I guess I shouldn't complain seeing as I'm designing a stabilizer right now.

    Oh, and the oil price we see is for a benchmark crude. Different regions produce different quality crudes that sell for different amounts. The U.S. companies probably want to export because our crude is generally light and sweet (lower sulfur), and therefore on the high end of the price. Meanwhile, before our production ramped into the stratosphere we converted a bunch of our refineries to process the nasty stuff so we might actually need some of the heavy, sulfur rich stuff from say, Venezuela for example, to keep them running optimally on their current design.

    This was a good informative post, thanks for that.

    Just read an article that says, according to OPEC Secretary General Abdalla Salem El-Badri, oil prices won't fall lower due to increased demand. But OPEC will continue to pump out 30 million barrels a day. I'm not sure how he can be so confident about it. Either he knows something for an absolute certainty that the rest of the world can't take for granted or this is posturing. I'm not sure where I'd put my money.

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    PhyphorPhyphor Building Planet Busters Tasting FruitRegistered User regular
    ElJeffe wrote: »
    Is there any
    Phyphor wrote: »
    The Ender wrote: »
    Doodmann wrote: »
    I find the geopolitics of fracking and oil trends really fascinating, but the fact that gas is still $4 dollars a gallon in Los Angeles makes me want to eat the executive class.

    Crude oil prices and gasoline prices are not really linked together as neatly as you might think.

    Also stop complaining

    Yes, because the fact that your gasoline expenses went up by a hundred bucks a month is made irrelevant by higher gas prices in other countries with actual functioning public transit systems.

    And hey you, person who just lost his leg in an industrial accident! Stop whining, because someone somewhere just lost two legs!

    If everybody else had lost two legs, then yes. You still have the lowest prices of any developed nation by a substantial margin, and it's not like other places are immune to or do not show the same price increases

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    ArtoriaArtoria Registered User regular
    edited July 2015
    Cantido wrote: »
    Rchanen wrote: »

    Fuck you Texas, this is a good thing*

    *And not a substitute for continued investment in green technology.

    I can tell you that low oil prices has been horrible for people around here as thousands have lost their jobs, several smaller businesses have had to close up shop since their business has dropped, and my place of employment has had 3 rounds of layoffs. I also lost all my savings in a real estate deal that was a sure thing but then fell part because oil craters about 1 1/2 months after we got started.

    :(

    Artoria on
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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    August has been crazy.

    WTI hit $37.75 this month!

    It looks like it's recovering somewhat, though; estimates of shale production in places like Texas have decreased because production is going down (no shit).

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    XaquinXaquin Right behind you!Registered User regular
    I can actually afford to go pick up my son 4 times a month

    Drop all you want gas prices

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    Xaquin wrote: »
    I can actually afford to go pick up my son 4 times a month

    Drop all you want gas prices

    Low price of oil != low price of gasoline

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    KrieghundKrieghund Registered User regular
    Usually what'll happen is the price for the retailer will go down until they feel they've made enough to offset any losses then the price of gas will go down. I was $26k off last years numbers until Ericka decided to scare people. I was making about a quarter per gallon that day and did something like 25k gallons of regular. Fiscal year ended yesterday. I'll see tomorrow what my final numbers are going to be.

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    JusticeforPlutoJusticeforPluto Registered User regular
    Yeah, gas is back up to just under $3.00 a gallon.

    Highest it ever reached was $4.00 a gallon.

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    XaquinXaquin Right behind you!Registered User regular
    Xaquin wrote: »
    I can actually afford to go pick up my son 4 times a month

    Drop all you want gas prices

    Low price of oil != low price of gasoline

    well

    ok

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    iguanacusiguanacus Desert PlanetRegistered User regular
    Down to $1.99 here in Jersey.

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    ShadowhopeShadowhope Baa. Registered User regular
    Civics is not a consumer product that you can ignore because you don’t like the options presented.
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    TOGSolidTOGSolid Drunk sailor Seattle, WashingtonRegistered User regular
    edited September 2015
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    I dunno, I worked for ATC when I was starting my engineering career and they run four VLCC tankers that can haul 1.2 million barrels of crude. The primary route they ran was from Valdez down to Long Beach to drop off. They'd also hit some smaller ports like Cherry Point along the way but the big main stop was always Long Beach, California. A few other outfits do this also. Even with the ability to export, I imagine that it'd still make more sense to do the main export pick up point out of a big port like Long Beach rather than to dick around with trying to use Valdez as a primary export point. It's got enough tanker traffic problems as it is.
    The Ender wrote: »
    So, like, I grew up in a place whose conservative government hedged it's entire financial future on oil prices remaining high forever. And the higher the oil price got, the more the province hedged. Have a really good year? Send everyone in the province a $500.00 check. No, really. That actually happened. I'm pretty sure I bought one of my Gameboy systems with my check.

    In fact I think it happened more than once, but I wasn't there for any of the other 'let's do a retarded thing with our treasury money' subsidies (yes, even from a political standpoint, it was a dumb idea. The conservatives were always a voter shoe-in, so long as King Ralph was in power anyway).


    Said place just finished voting in a socialist government, which is now going to try and fix all of the horrific damage that was done by going all in on black.


    Of course, the oil price will see an upward correction at some yet-to-be-determined time, because commodities always violently fluctuate in value, which is why you don't want to do things like tie your currency or economy to one commodity that seems really lucrative in the here and now.

    Alaska is going through exactly this right now and it's even worse. The dickheaded, idiotic right wing up here successfully managed to get rid of the ACES tax which was a tax on oil revenue in Alaska. When ACES was killed and the moron residents up here approved it the state lost TWO BILLION in revenue and is now scrambling to try and find money. We just got through a potential government shutdown due to trying to get a budget passed, again due to the shitbag Republicans being shitbag Republicans. Alaska went all in on oil money, got rid of the oil tax, and then oil prices tanked. Fucking brilliant. We'd still be hurting even with ACES but it would't be anywhere near this bad. On the plus side, people are kinda pissed off at the legislature (even though it's kinda the people's own fucking fault we're in this mess) but they're also being manipulated into having to consider new taxes or giving up the PFD (which the legislature has been trying to tap into for years).

    Needless to say, I'm moving the fuck out of this state ASAP. It's already a backwater shit hole and it's about to get worse.

    TOGSolid on
    wWuzwvJ.png
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    DevoutlyApatheticDevoutlyApathetic Registered User regular
    TOGSolid wrote: »
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    I dunno, I worked for ATC when I was starting my engineering career and they run four VLCC tankers that can haul 1.2 million barrels of crude. The primary route they ran was from Valdez down to Long Beach to drop off. They'd also hit some smaller ports like Cherry Point along the way but the big main stop was always Long Beach, California. A few other outfits do this also. Even with the ability to export, I imagine that it'd still make more sense to do the main export pick up point out of a big port like Long Beach rather than to dick around with trying to use Valdez as a primary export point. It's got enough tanker traffic problems as it is.

    That was like a month old but if I remember the point was that yeah, it goes south because it has to by law. The US isn't allowed to export its oil because RAH RAH FUCK ECONOMICS.

    I think my initial confusion was if it would really be cheaper for business for it to go west to Russia/China than south.

    Nod. Get treat. PSN: Quippish
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    TOGSolidTOGSolid Drunk sailor Seattle, WashingtonRegistered User regular
    TOGSolid wrote: »
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil.

    Murkowski won a write in campaign after getting primaried off the ballot from the R side. To say she gives no fucks about keeping the "GOP Establishment" happy would be accurate.

    I am confused by why she would be doing this though it might be easier/cheaper for AK oil to flow westwards than all the way down to the US.

    I dunno, I worked for ATC when I was starting my engineering career and they run four VLCC tankers that can haul 1.2 million barrels of crude. The primary route they ran was from Valdez down to Long Beach to drop off. They'd also hit some smaller ports like Cherry Point along the way but the big main stop was always Long Beach, California. A few other outfits do this also. Even with the ability to export, I imagine that it'd still make more sense to do the main export pick up point out of a big port like Long Beach rather than to dick around with trying to use Valdez as a primary export point. It's got enough tanker traffic problems as it is.

    That was like a month old but if I remember the point was that yeah, it goes south because it has to by law. The US isn't allowed to export its oil because RAH RAH FUCK ECONOMICS.

    I think my initial confusion was if it would really be cheaper for business for it to go west to Russia/China than south.

    Honestly, I'd prefer it to stay in country and get used in US made refineries and then have more US made finished products being pumped out onto the global market but I acknowledge this is also completely silly in today's market.

    wWuzwvJ.png
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    Mr KhanMr Khan Not Everyone WAHHHRegistered User regular
    I read a report recently which stated that Bakken Shale could be profitable as low as $29/barrel, so it could be that the industry will adjust soon.

    I know it had an impact in Pittsburgh. The charity I was working for (paid internship! I was lucky) got most of their money from corporate sponsors, and had gotten big into shale programs because part of the charity's gig was in promoting non-bachelor's-degree jobs. Prices go down, companies cut their donations, suddenly the charity is facing a big shortfall in meeting their annual projections. They were great about it; they didn't terminate me until my internship naturally expired with the academic year.

    It's been rough on my dad's employer, a steel forge, which was also heavily invested in making drills for them.

    Honestly, though, breaking the fever of shale-mania is probably better for the state in the long run. The drop in prices was fortuitously timed with incoming Tom Wolf (D-Gov), so our politics stops functioning like a petro-state and the dialogue becomes more balanced. An actual tax on shale is part of Wolf's demands to not veto a state budget (although i imagine he'd just settle for boosts in education funding, which was his winning issue).

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    edited October 2015
    The IMF is predicting that if oil stays below $50/barrel, Saudi Arabia will be bankrupt in five years or less.

    So they're cutting government projects, but only economic projects, not social or military ones, allegedly to avoid a repeat uprising.

    The balancing act is too delicate, in my opinion. They're throwing away potentially their entire rainy day funds in the hopes of capturing marginally better market share than they had. When oil was $100/barrel, they were running huge budget surpluses. Instead of a strategy to become slightly more dominant in an energy market that's (hopefully) on its way out, they should be investing that money in ways to expand their economy beyond the oil business. But nobody ever said oil speculators weren't myopic, I guess.

    joshofalltrades on
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    Kipling217Kipling217 Registered User regular
    The moment Saudi Arabia runs out of Oil is the moment Saudi Arabia becomes just plain Arabia. If they run out of money before that it will happen sooner.

    The entire kingdom is based on Oil. Worst case of Dutch Disease ever seen.

    The sky was full of stars, every star an exploding ship. One of ours.
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    PhillisherePhillishere Registered User regular
    Kipling217 wrote: »
    The moment Saudi Arabia runs out of Oil is the moment Saudi Arabia becomes just plain Arabia. If they run out of money before that it will happen sooner.

    The entire kingdom is based on Oil. Worst case of Dutch Disease ever seen.

    They've made some efforts at diversification, but the combination of corruption (projects tend to devolve into cash sinks for royal family members and their friends) and the extreme repressive nature of Saudi society mean that those do not go anywhere. The other Gulf states have managed to paper over their regressive regimes enough to get expatriate workers, tourism and global investment dollars. The Saudis just can't make that happen.

    I'd say the most damning thing in terms of stability is the rumors that their military is essentially a paper shell filled with royals playing officer at the top and poorly paid Pakistani and Indonesian immigrant soldiers at the bottom.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    Given that the Saudis just agreed to help the rebels in Syria, it's possible that their economy is going to become even more strained. It all depends upon the nature of the assistance they're going to provide, though. If they actually contribute military forces I would think that would be quite a heavy burden, perhaps enough to get them to constrain their output. But I'm not willing to put money on that bet; it's entirely possible that increasing their market share in oil is more important to them than their military agreements and that they'd just scale back their military involvement rather than reduce their crude output to bolster their short-term income deficit.

    All that is based on a whole lot of what-if, though.

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    Mr KhanMr Khan Not Everyone WAHHHRegistered User regular
    A military disaster in Yemen won't do them any favors either. Though it may not come to that, i'm not optimistic about their chances in a land war.

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    Dis'Dis' Registered User regular
    The other Gulf states have managed to paper over their regressive regimes enough to get expatriate workers, tourism and global investment dollars.

    The other gulf states have the advantage of size - you can just about run a city state of 0.5-1 million as a top down operation and have it kinda sorta work, not so much a country of 30 million.

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    RchanenRchanen Registered User regular
    edited October 2015
    Mr Khan wrote: »
    A military disaster in Yemen won't do them any favors either. Though it may not come to that, i'm not optimistic about their chances in a land war.

    Neither is Kaputa

    @Kaputa thought I would call you in.

    So far as I can tell from Kaputa's dispatches in the front lines of sorting bullshit from truth from various Media sources, the war is not going well for the Saudis. At all.

    And this is not the time they can afford it.

    Rchanen on
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    KaputaKaputa Registered User regular
    Rchanen wrote: »
    Mr Khan wrote: »
    A military disaster in Yemen won't do them any favors either. Though it may not come to that, i'm not optimistic about their chances in a land war.

    Neither is Kaputa

    @Kaputa thought I would call you in.

    So far as I can tell from Kaputa's dispatches in the front lines of sorting bullshit from truth from various Media sources, the war is not going well for the Saudis. At all.

    And this is not the time they can afford it.
    I'll preface this by saying that I'm not an academic or an expert, just a dude who spends too much of his free time reading about Middle Eastern history/conflicts in the MENA. But I'm flattered that you consider me to be a good source for this stuff.

    The Saudi-led coalition's ground invasion quickly pushed their mostly northern Yemeni enemies out of most of their southern territory, though things have been back and forth since then. Foreign troop levels keep escalating - Qatari, Bahrarini, and Sudanese troops are reported to be present, in addition to the Saudi and UAE troops which probably make up the bulk of the force. But they don't seem positioned to take the capital in the imminent future, and the alliance of Yemeni forces that the KSA is relying on is both fractious and largely unwilling to push further north. The Southern Movement, which fought hard to push the Houthis from Aden and other southern areas, is now holding massive protests in southern cities in demand of secession, and has made it clear that they won't fight the Houthis for the north. Meanwhile, as I described in the ME thread, al-Qaeda is taking over parts of southern cities and straining the loose southern alliance. This means that an assault on Sanaa or any serious push northward would require the KSA-led coalition's own troops to be the main ground force, which would be far costlier than supporting an indigenous Yemeni ground force. A stalemate between North and South seems like the best likely option at the moment, while a number of worse scenarios (continued war of attrition, jihadist takeover of parts of the south, more international escalation etc.) seem plausible.

    I don't think the KSA and their allies will suffer a major military defeat at the hands of the northern Yemeni forces, if only because the history of foreign intervention in Yemen is so disastrous that it might dissuade them from making a serious attempt on the north. And if heavy fighting does continue, I think the international nature of the coalition will distribute the economic and human costs to a tolerable extent. I think the primary downsides are political rather than military or economic - being forced to accept a partition of Yemen or making significant concessions to the Houthis will be a bitter pill for this especially bellicose Saudi regime to swallow. AQAP's expansion under the KSA's cover is a very concerning wild card, though; the situation in southern Yemen has become so chaotic that I hesitate to make any predictions as to what will happen now.

    Not sure if this is helpful or not!

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