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StrongButKind -> RE: Alaskan Oil (8/8/2006 7:42:34 AM)
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quote:
ORIGINAL: WyrdRich
quote:
ORIGINAL: popeye1250
Not surprising since that pipeline is 30 years old.
It only constitutes 1/2 of 1 % of world oil production.
But according to the radio this morning, it is 8% of our domestic consumption. That is significant. Can we all just agree that President Bush will cut a deal to the oil companies on oil in the SPR and not go there?
8% of domestic production, not consumption. We are a net importer (understatement of the day). This translates roughly to 2.5% of our daily supply (including both domestic production and imports).
The SPR has ~ 700,000,000 barrels of oil; this disruption costs ~ 400,000/day, so the SPR can easily handle this outage, even if it extended several years. Which it won't. Prices will go up. In principle, if the reserve is used to protect the market, there would be a very small increase at the time the reserves are replenished. In practice, due to speculative markets, there will be a small but excessive increase immediately which will reduce in time. Because this is not a real market force, it will mostly go to oil company and investor profit. Such is life in capitalism (the worst economic system except for all the other ones).
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