Newt Chavez

[cthulu2016]

All Republican claims about energy require that the USA nationalize domestic energy production. Since that is the opposite of what they favor the whole energy thing is one of the biggest political lies I’ve ever seen.

The US consumes 20% of the world’s energy. We are a major energy producer but we are net importers because we consume at a high rate per capita. (Counting everything, not just oil, we produce three times more total energy than we import. More than 70% of US energy is already domestic.)

Top World Oil Producers, 2010
(Thousand Barrels per Day)
______________________
Saudi Arabia 10,521
Russia 10,146
United States 9,688
China 4,273
Iran 4,252
Canada 3,483
Mexico 2,983

(First off… the promise that we could be like Saudi Arabia is pretty funny, since we already are.)

If the US nationalized the oil industry we could allocate all domestic production to American use. (This would be a government oil subsidy, since the government could make more selling that oil on the open market.) If the oil companies were nationalized then doubling oil production here would indeed result in $.2.50 gas. Domestic energy use would increase with lower prices, of course, but doubling supply in our market would have a dramatic effect.

But without going all Hugo Chavez on the corporations it would have almost no effect.

In a free market the US would need to come up with enough additional oil production to collapse the global oil market. If oil is $150/barrel then oil drilled in the US will cost about $150/barrel. If Americans didn’t want to pay that then our oil would be shipped to some country that did.

We produce 12% of the world’s oil. If we doubled domestic production (and OPEC did not cut production to compensate…ahem) the world oil production would go from 100 units to 112 units.

From 100 to 112. Would that increase knock 40% off the international price of a barrel of oil to magically produce $2.50 gasoline?

Yes, can achieve $2.50/gallon gas for consumers provided that we socialize all US energy production and that the government then subsidize domestic gasoline prices by selling oil to consumers for less than it is worth elsewhere.

But without going socialist it is a patently ridiculous idea.

[cthulu2016]

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[cthulu2016]

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