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LeeG
10-27-2015, 04:01 PM
The Strategic Petroleum Reserve needs to make infrastructure improvements and gov't needs a little cash so they're going to sell 8% of the SPR over seven yrs to raise funds. I wonder if they'll pull it off. It would make more sense to pay for it with a tax on consumption/import or oil.


http://www.bloomberg.com/news/articles/2015-10-27/u-s-plans-to-sell-down-strategic-oil-reserve-to-raise-cash

skuthorp
10-27-2015, 04:23 PM
yes.

Too Little Time
10-27-2015, 06:19 PM
They should have locked in buyers when the price was high.

Chris Smith porter maine
10-27-2015, 06:23 PM
We should be buying now not selling.

LeeG
10-27-2015, 08:02 PM
We should be buying now not selling.

But still the infrastructure for drawing out that reserve for future emergencies needs rebuilding, pipelines and pumps don't last forever anymore than highways do. That's the weird part, we don't want to pay the cost.

Lew Barrett
10-27-2015, 08:57 PM
Infrastructure? Humbug. What a country.

BrianW
10-28-2015, 12:02 AM
I suggest we put the oil in train cars, and move them around the country until the work is done. Trains are safe.

Gerarddm
10-28-2015, 01:05 AM
Leaving dead dinosaurs and ferns in the ground is even safer.

slug
10-28-2015, 01:23 AM
When the US has so much unconventional domestic oil , Fracking , why does it need so much stored oil in the reserve ?

Selling stored oil sounds like a good way to raise revenue .

LeeG
10-28-2015, 09:35 AM
When the US has so much unconventional domestic oil , Fracking , why does it need so much stored oil in the reserve ?

Selling stored oil sounds like a good way to raise revenue .

Because the US is an oil importer and disruptions can occur. "So much" means little without qualifiers of amount at what price. At prices that hurt our economy the daily flow from unconventional oil is still inadequate to run the economy as conventional oil continues to deplete since the 1970 peak. Fracked oil production is as much a consequence of the credit market as it is high prices, with low oil prices fracked oil production is declining.
Selling stored oil saved for an emergency for necessary infrastructure upgrades because you don't want to pay the cost now leaves less for that emergency. Inflation adjusted the SPR oil costs $75/b, selling into a $55/b market sounds like a good way to lose money.

Jim Mahan
10-28-2015, 09:41 AM
We could make up the shortfall by squeezing the entitlement juice out of all the poor people who really just faking.

slug
10-28-2015, 09:45 AM
If you sell at 50 a barrel from the reserve..then oil drops to 40 and you buy, refil ....you just made money for society and made infrastructure improvements.

im not prepared to critize the sale. The reserve is an asset owned by the public and used to benifit society.

LeeG
10-28-2015, 10:15 AM
If you sell at 50 a barrel from the reserve..then oil drops to 40 and you buy, refil ....you just made money for society and made infrastructure improvements.

im not prepared to critize the sale. The reserve is an asset owned by the public and used to benifit society.

Oil price set by world supply and demand not a few fields in the US. The reserve is oil for a specific purpose. Selling assets to pay for operating costs is a hell of an admission that one is downsizing but let's keep eating out.

slug
10-28-2015, 10:20 AM
Oil price set by world supply and demand not a few fields in the US. The reserve is oil for a specific purpose. Selling assets to pay for operating costs is a hell of an admission that one is downsizing but let's keep eating out.


tell us what the purpose is ?

LeeG
10-28-2015, 10:33 AM
Wrt there being "so much unconventional oil" that doesn't mean it's all technically, or economically recoverable. The ocean has so much fish, but if you live 1000miles inland your fishing rod won't reach them.

Tight oil is an example of world oil supplies slowing down, not a way to avoid it.


http://news.nationalgeographic.com/news/2014/12/141219-fracking-oil-supply-price-reserves-profits-environment/

The Energy Department's estimate of "proved reserves" of shale oil—those that can be recovered economically today—is only about ten billion barrels. That's about a sixth of technically recoverable reserves, and less than a year and a half's worth of current consumption. Proved reserves include all currently known U.S. oil shale resources-North Dakota Bakken, Texas Eagle Ford, Colorado and Nebraska Niobrara, Texas Barnett, and others.

In contrast, the proved reserves from just three Middle East nations—Saudi Arabia, Kuwait, and the United Arab Emirates—total more than 460 billion barrels. That's 46 times U.S. shale oil reserves, and more than 12 times the total U.S. oil reserves.

LeeG
10-28-2015, 10:46 AM
tell us what the purpose is ?

Make your point, I said above in post #5 and #10 what the SPR is for.

John of Phoenix
10-28-2015, 11:06 AM
We bought a bunch of oil for the Reserve during the cheney administration when it was at $120-140. It only makes sense to sell it a now at $40-50. And since there will never be any tax increases, selling is much better than borrowing money at 0.50% for these repairs.

Yeah, "What a country!"

slug
10-28-2015, 11:27 AM
We bought a bunch of oil for the Reserve during the cheney administration when it was at $120-140. It only makes sense to sell it a now at $40-50. And since there will never be any tax increases, selling is much better than borrowing money at 0.50% for these repairs.

Yeah, "What a country!"


The average cost of reserve oil is 30 dollars per barrel , not adjusted for inflation.

the reserve is used as a price buffer. Especialy around election time.



since oil now comes from a variety of sources the reserve has lost its strategic role. Private oil inventories in the US are almost equal to the reserve.

LeeG
10-28-2015, 11:40 AM
The average cost of reserve oil is 30 dollars per barrel , not adjusted for inflation.

the reserve is used as a price buffer. Especialy around election time.



since oil now comes from a variety of sources the reserve has lost its strategic role. Private oil inventories in the US are almost equal to the reserve.

Adjusted for inflation it's $75. The rate of extraction from the reserve is insignificant on the world market so it's ability to affect world prices is little especially when figuring in world demand. Oil is a vital strategic resource that China/India can outbid us on the export market and the Middle East is still where the largest reserves exist. You are betting a lot on peace breaking out in the Middle East. Private oil reserves are just that, private and they are in decline.

slug
10-28-2015, 11:48 AM
Adjusted for inflation it's $75. The rate of extraction from the reserve is insignificant on the world market so it's ability to affect world prices is little especially when figuring in world demand. Oil is a vital strategic resource that China/India can outbid us on the export market and the Middle East is still where the largest reserves exist. You are betting a lot on peace breaking out in the Middle East. Private oil reserves are just that, private and they are in decline.


When hurricane katrina shut down the gulf ,oil is released from the reserve to prevent domestic price shocks. A buffer.

if the chinese would like to outbid wall street...let them

LeeG
10-28-2015, 12:37 PM
When hurricane katrina shut down the gulf ,oil is released from the reserve to prevent domestic price shocks. A buffer.

if the chinese would like to outbid wall street...let them

And if a demographic or civil hurricane hits Saudi Arabia the affects will last a lot longer than Katrina.

slug
10-28-2015, 12:44 PM
Mexico, africa, russia, norway, .....plenty of oil around.

LeeG
10-28-2015, 12:55 PM
Mexico, africa, russia, norway, .....plenty of oil around.

I have plenty of coins in my pocket and plenty of nails in a box.



http://econbrowser.com/wp-content/uploads/2014/07/NSea_jul_14.png

Michael D. Storey
10-28-2015, 01:58 PM
The Strategic Petroleum Reserve needs to make infrastructure improvements and gov't needs a little cash so they're going to sell 8% of the SPR over seven yrs to raise funds. I wonder if they'll pull it off. It would make more sense to pay for it with a tax on consumption/import or oil.

http://www.bloomberg.com/news/articles/2015-10-27/u-s-plans-to-sell-down-strategic-oil-reserve-to-raise-cashIs it really the SPR that has to make infrastructure improvements?
If infrastructure is 'only' bridges and roads, I would point out that the petroleum use tax does not even keep up with inflation. Spineless elected officials at work, here. What is not spoken about, and is a vital part of the infrastructure needs to include water. I happen to know of a town in MAryland, just two hours from the Villa Vanilla, that had a fire across the street from a gas station and did not have enough water to put it out. They had to call for a tanker from over 20 miles away to come to the River to bring water. Coulda gone bad. Why I believe in luck.
This is a real crisis here, and the congress has refused to move on any of this because they do not want to co operate with My President. Whatta tona Crap.

LeeG
10-28-2015, 02:19 PM
Is it really the SPR that has to make infrastructure improvements?
If infrastructure is 'only' bridges and roads, I would point out that the petroleum use tax does not even keep up with inflation. Spineless elected officials at work, here. What is not spoken about, and is a vital part of the infrastructure needs to include water. I happen to know of a town in MAryland, just two hours from the Villa Vanilla, that had a fire across the street from a gas station and did not have enough water to put it out. They had to call for a tanker from over 20 miles away to come to the River to bring water. Coulda gone bad. Why I believe in luck.
This is a real crisis here, and the congress has refused to move on any of this because they do not want to co operate with My President. Whatta tona Crap.

It's one of the reasons. The infrastructure for the SPR isn't maintenance free anymore than a highway or a building. Since it won't take place till 2018 it looks like one of those "Robbing Peter to pay Paul" budgeting tactics to avoid telling tax payers it costs money to run the show. Speaking of subsidies:

http://www.theatlantic.com/business/archive/2015/10/driving-true-costs/412237/#article-comments


A report published earlier this year confirms, in tremendous detail, a very basic fact of transportation that’s widely disbelieved: Drivers don’t come close to paying for the costs of the roads they use. Published jointly by the Frontier Group and the U.S. PIRG Education Fund, “Who Pays for Roads?” exposes the myth that drivers are covering what they’re using.

The report documents that the amount that road users pay through gas taxes now accounts for less than half of what’s spent to maintain and expand the road system. The resulting shortfall is made up from other sources of tax revenue at the state and local levels, generated by drivers and non-drivers alike. This subsidizing of car ownership costs the typical household about $1,100 per year—over and above the costs of gas taxes, tolls, and other user fees.

While congressional bailouts of the Highway Trust Fund have made this subsidy more apparent, it has actually never been the case that road users paid their own way. Not only that, but the amount of their subsidy has steadily increased in recent years. The share of the costs paid from road-user fees has dropped from about 70 percent in the 1960s to less than half today, according to the study.

LeeG
10-28-2015, 03:05 PM
Hopefully oil goes up but if it doesn't the fracked oil boom will go from a plateau to a much faster decline, joining the depletion of existing wells.

http://www.washingtonpost.com/business/economy/congress-and-obama-tap-petroleum-reserve-to-plug-hole-in-the-budget/2015/10/27/8b9135f0-7ce0-11e5-beba-927fd8634498_story.html

The sale of crude oil from the nation’s Strategic Petroleum Reserve amounts to little more than a rounding error in the federal budget deal struck Tuesday, but some critics lament that the sales will draw down a large portion of the emergency reserve.

Moreover, Congress and the Obama administration are planning to take another dip into the reserve: The compromise to fund the Highway Trust Fund also relies on sales of crude oil from the SPR. Taken together, the measures could ultimately liquidate more than 20 percent of the nation’s petroleum reserves.

“Using the SPR like an ATM is not a good idea,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, who formerly was President Obama’s National Security Council adviser on energy and climate.

Congressional Budget Office’s oil price estimates — $88 a barrel. That figure assumes prices will rebound from current levels. The benchmark for U.S. crude oil, West Texas Intermediate, closed Tuesday at $43.41 a barrel, less than half the CBO projections.

John of Phoenix
10-28-2015, 03:16 PM
I wonder if there will be any question concerning the Highway Trust Fund or SPR during the "debate" tonight. How would The Donald handle this? Carson?

:D LMAO :D

slug
10-28-2015, 03:39 PM
Hopefully oil goes up but if it doesn't the fracked oil boom will go from a plateau to a much faster decline, joining the depletion of existing wells.

http://www.washingtonpost.com/business/economy/congress-and-obama-tap-petroleum-reserve-to-plug-hole-in-the-budget/2015/10/27/8b9135f0-7ce0-11e5-beba-927fd8634498_story.html

The sale of crude oil from the nation’s Strategic Petroleum Reserve amounts to little more than a rounding error in the federal budget deal struck Tuesday, but some critics lament that the sales will draw down a large portion of the emergency reserve.

Moreover, Congress and the Obama administration are planning to take another dip into the reserve: The compromise to fund the Highway Trust Fund also relies on sales of crude oil from the SPR. Taken together, the measures could ultimately liquidate more than 20 percent of the nation’s petroleum reserves.

“Using the SPR like an ATM is not a good idea,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, who formerly was President Obama’s National Security Council adviser on energy and climate.

Congressional Budget Office’s oil price estimates — $88 a barrel. That figure assumes prices will rebound from current levels. The benchmark for U.S. crude oil, West Texas Intermediate, closed Tuesday at $43.41 a barrel, less than half the CBO projections.


Hmmmm...




. The average price of the oil in the reserve is $29.70 a barrel, according to the Energy Department. That estimate doesn’t adjust for inflation or storage costs.
The Congressional Budget Office predicted (https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/costestimate/bipartisanbudgetactof2015revisedestimate.pdf) Tuesday that oil would cost $70 a barrel in 2018, when sales begin, and increase to $95 in 2025, when 10 million barrels would be sold. Altogether, the sales are estimated to bring in $5.05 billion. The energy secretary would have the ability to halt sales if supplies dropped below certain thresholds.

In 2000, imports made up such a large proportion of U.S. supplies that the reserve could cover only 111 days if the Organization of Petroleum Exporting Countries cut off shipments. Last year, that figure reached a high of 274 days, according to data compiled by Bloomberg. The oil market won’t be much affected by the sale, wrote Rob Barnett and Cheryl Wilson, analysts for Bloomberg Intelligence. With U.S. consumption at about 7 billion barrels a year, or 19 million barrels a day, the sale of 5 million barrels starting in 2018 is small relative to the size of the market, they wrote.

Phil Y
10-28-2015, 03:55 PM
I've taken all my furniture out to paint my house, and Im finding there is not much I really want to put back in.

LeeG
10-28-2015, 04:02 PM
Hmmmm...




. The average price of the oil in the reserve is $29.70 a barrel, according to the Energy Department. That estimate doesn’t adjust for inflation or storage costs.
The Congressional Budget Office predicted (https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/costestimate/bipartisanbudgetactof2015revisedestimate.pdf) Tuesday that oil would cost $70 a barrel in 2018, when sales begin, and increase to $95 in 2025, when 10 million barrels would be sold. Altogether, the sales are estimated to bring in $5.05 billion. The energy secretary would have the ability to halt sales if supplies dropped below certain thresholds.

In 2000, imports made up such a large proportion of U.S. supplies that the reserve could cover only 111 days if the Organization of Petroleum Exporting Countries cut off shipments. Last year, that figure reached a high of 274 days, according to data compiled by Bloomberg. The oil market won’t be much affected by the sale, wrote Rob Barnett and Cheryl Wilson, analysts for Bloomberg Intelligence. With U.S. consumption at about 7 billion barrels a year, or 19 million barrels a day, the sale of 5 million barrels starting in 2018 is small relative to the size of the market, they wrote.

"The oil market won't be much affected by the sale" that's what I said.
A few billion dollars could be easily raised with a few cents on a gallon of fuel or $.20 on a barrel.
The basic fact hasn't changed that the US is an importer of oil with no ability to survive on domestic supplies with the present system.

"In 2000, imports made up such a large proportion of U.S. supplies that the reserve could cover only 111 days if the Organization of Petroleum Exporting Countries cut off shipments. "

In 2000 we could compete with China for world exports of oil, this isn't 2000. Fracked oil was going to peak and decline in a few years if oil stayed at $100/barrel, now that it's $50 it's declining now.

LeeG
10-28-2015, 04:03 PM
I've taken all my furniture out to paint my house, and Im finding there is not much I really want to put back in.

There you go, space appreciation.