Why the US stores 700M barrels of oil underground • Hacker News Board

Re: Why the US stores 700M barrels of oil underground

#91

Post by selestify » Tue, Sep 22, 2015, 8:52 PM UTC

logfromblammo wrote: post #62

lukeschlather wrote: post #27

Earlier quoted context omitted.

The disingenous (or ignorant) thing about that sort of thing is that it makes no mention of alternative fuel prices. Coal and natural gas can be refined into gasoline. This is obviously not a great idea from an environmental standpoint, but from a cost standpoint it becomes economically viable when oil hits about $70/barrel. Electrolysis-refined hydrogen becomes economical when oil hits $200/barrel, and that has a lo…

The US tapped out its highest-profit traditional oil wells a long time ago, and used the export profits to grow its economy. Now the US is awash in fracked gas. The "sit on it" strategy assumes that the resource held in reserve will not become obsolete. It makes more sense to me to pull it all out of the ground as fast as you can, so you can sell more of it when the global price is highest, rather than being forced t…

What was China's rare earths play?

Re: Why the US stores 700M barrels of oil underground

#92

Post by ckozlowski » Tue, Sep 22, 2015, 9:08 PM UTC

retube wrote: post #21

Shivetya wrote: post #10

Earlier quoted context omitted.

I am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantees to Saudi Arabia to have them swamp the markets. Far more effective than military intervention.

Sorry but that's nonsense. It's a well known and indeed publically admitted strategy by the Saudi's to drive US shale producers out of business. Google "saudia arabia united states oil price" for many authoritive hits on the subject. Russia was collateral damage.

A bit of both. I wouldn't characterize as being quite so malicious, but it's business for sure. The Saudi's need to maintain market share, even if they are selling it cheaper. They're banking on the price going back up, and if it does and the world has switched to US suppliers, then they're out even more.

But there's another country they're looking to disrupt, one who's primary source of income is through oil sales due to sanctions. Their biggest enemy.

Iran.

Re: Why the US stores 700M barrels of oil underground

#93

Post by logfromblammo » Tue, Sep 22, 2015, 9:30 PM UTC

selestify wrote: post #91

logfromblammo wrote: post #62

Earlier quoted context omitted.

The US tapped out its highest-profit traditional oil wells a long time ago, and used the export profits to grow its economy. Now the US is awash in fracked gas. The "sit on it" strategy assumes that the resource held in reserve will not become obsolete. It makes more sense to me to pull it all out of the ground as fast as you can, so you can sell more of it when the global price is highest, rather than being forced t…

What was China's rare earths play?

After China became practically the sole supplier of rare earth elements to the entire world, they restricted exports in 2011, creating shortages everywhere outside of China.

It caused a lot of companies to reexamine their supply chains, this time considering factors other than just price per ton. Several nations started subsidizing domestic production from mothballed facilities for strategic economic reasons. China went from 95% share of that market to less than 80%.

Essentially, they were expecting to get higher prices by restricting output as a monopoly supplier, but it blew up in their faces.

Re: Why the US stores 700M barrels of oil underground

#94

Post by logfromblammo » Tue, Sep 22, 2015, 9:47 PM UTC

dudus wrote: post #85

logfromblammo wrote: post #58

Earlier quoted context omitted.

Canada has had a strategic maple syrup reserve since 2000. It hit the news when someone stole $30000 worth of the sweet stuff from it. It's basically there to both protect Canada's domestic syrup producers and extend the sales market internationally. You can bet your tuque that the reserve would be put into play if New England syrup producers made a move that might hurt the Quebec producers across the border.

I'll never forget the Gawker article on it. It was actually worth $30 Million http://gawker.com/we-gave-canada-one-job-dont-lose-all-the-m... My favourite quote: """ The Federation of Québec Maple Syrup Producers (three magical elves) noticed that the syrup was missing during a routine inspection of the warehouse, which is maintained as part of the world's "global strategic maple syrup reserve." """

I actually think that the story could be successfully adapted into the best comedic caper movie ever to be filmed in Montreal.

Re: Why the US stores 700M barrels of oil underground

#95

Post by icanhackit » Wed, Sep 23, 2015, 12:17 AM UTC

Synaesthesia wrote: post #17

Shivetya wrote: post #10

Earlier quoted context omitted.

I am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantees to Saudi Arabia to have them swamp the markets. Far more effective than military intervention.

It's certainly not beyond conception! As Assange mentioned in this interview, a wikileaks cable showed how the US departments all work together to achieve a Foreign Policy aim, for example when a a country needs to be isolated by the they work together to apply pressure in the economic, diplomatic, military and public relations realm. https://www.youtube.com/watch?v=W3HWiydFlJc

> US departments all work together to achieve a Foreign Policy aim

My interpretation wasn't that they're working together, i.e. coordinating, more like acting in unison where they are each given a different pressure-point to attack suited to their innate abilities or field. So a central goal would be established at the highest level and you give a task to each entity that can contribute in their own separate ways to that goal - e.g. a newspaper leaks something that will destabilize something. An NGO will support a particular group with food, AID, legal advice, protection. A diplomat will call in some favors.

They're all doing different things with different effects that will hopefully contribute towards the greater goal, which would also explain how things can go pear-shaped if it doesn't all lock together into a cohesive outcome.

Re: Why the US stores 700M barrels of oil underground

#96

Post by frandroid » Wed, Sep 23, 2015, 1:56 PM UTC

Shivetya wrote: post #10

jacobolus wrote: post #8

> But there’s an important line to draw between that and using an SPR for ad hoc manipulation of the world’s markets. On this point, Martin Young is emphatic: “The oil stocks are not there for price management as such,” he explains, “they’re there to correct a shortage in the market because of a supply disruption.” Strategic reserves can absolutely also be used as an offensive economic weapon, however. As one example…

I am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantees to Saudi Arabia to have them swamp the markets. Far more effective than military intervention.

Saudi Arabia has its own interest in crippling the Iranian economy further. If we're looking at a geopolitical goal beyond Saudi's own need to keep oil cheap to undermine renewables and U.S. shale oil, that would come way before the American desires to undermine Russia. Saudi Arabia is strongly allied with the U.S. but doesn't feel particularly threatened by Russia.

Re: Why the US stores 700M barrels of oil underground

#97

Post by Shivetya » Wed, Sep 23, 2015, 9:33 PM UTC

retube wrote: post #21

Shivetya wrote: post #10

Earlier quoted context omitted.

I am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantees to Saudi Arabia to have them swamp the markets. Far more effective than military intervention.

Sorry but that's nonsense. It's a well known and indeed publically admitted strategy by the Saudi's to drive US shale producers out of business. Google "saudia arabia united states oil price" for many authoritive hits on the subject. Russia was collateral damage.

Figure it this way, Obama killed two birds with one stone.

Re: Why the US stores 700M barrels of oil underground

#98

Post by rancur » Fri, Oct 02, 2015, 5:12 PM UTC

elektromekatron wrote: post #90

rancur wrote: post #78

Earlier quoted context omitted.

because we don't care that much about Russia. This isn't the 80's. OPEC got greedy, that created room for shale, and Russia got hurt.

Hello, there's a fairly warm little proxy war going down right now in Ukraine and an increase in Russian forces in Syria. The 80's were the nice hopeful bit.

yes, those were the days when Russia could at least hope they would win a war with us