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The U.S. is now energy independent

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Re: The U.S. is now energy independent

#41

Post by friedturkey »

jmpman wrote: post #34

Can someone explain why during the start of Covid lockdowns, gasoline prices didn’t drop to $1.00/gallon? There was no demand, and plenty of supply. The simple supply/demand curve of my high school economics memory, seems to imply prices should have taken a dive to virtually zero. Sure they went down, but nowhere near what the models I’d learned would predict. Just a rant that lit up inside my brain every time I fill…

I think we've reached a point where prices don't really drop on anything within established industries even when it's expected that they should, unless they're at serious risk of being replaced by a newer, better product.

My country had a massive glut of milk overproduction this year. Well beyond what the country could drink, use in other products, or even export.

Know what happened? Some companies reduced milk container sizes from 1000mL to 900mL and prices went up.

Re: The U.S. is now energy independent

#42

Post by TameAntelope »

jmpman wrote: post #34

Can someone explain why during the start of Covid lockdowns, gasoline prices didn’t drop to $1.00/gallon? There was no demand, and plenty of supply. The simple supply/demand curve of my high school economics memory, seems to imply prices should have taken a dive to virtually zero. Sure they went down, but nowhere near what the models I’d learned would predict. Just a rant that lit up inside my brain every time I fill…

Oil barrel (futures) prices dropped into the negatives in 2020, which meant people were literally paying to give their barrels of oil away [0], driven partially by storage concerns.

So I guess, in a sense, what you're asking about did happen?

[0] https://www.marketwatch.com/story/oil-prices-went-negative-a...

Re: The U.S. is now energy independent

#43

Post by mkhpalm »

schmichael wrote: post #3
jimmygrapes wrote: post #2

This is a weird article. It is short and lacking detail, does not link any sources, and presents its data as if it's a first (it is not[0]). It reads, to be honest, as propaganda, especially considering the current rise in consumer prices for fuel and news about Saudi Arabia refusing to increase production[1]. What is the purpose of this article and why is it on the front page here? [0] https://www.eia.gov/energyexpl…

> It is short and lacking detail This, if you're not familiar, is Axios's entire value prop: short and sweet. Not saying it's good or bad, just pointing out that I would consider this article standard if not verbose by Axios's own standards.

What does citing sources have to do with succinctness?

Re: The U.S. is now energy independent

#44

Post by ctime »

jmpman wrote: post #34

Can someone explain why during the start of Covid lockdowns, gasoline prices didn’t drop to $1.00/gallon? There was no demand, and plenty of supply. The simple supply/demand curve of my high school economics memory, seems to imply prices should have taken a dive to virtually zero. Sure they went down, but nowhere near what the models I’d learned would predict. Just a rant that lit up inside my brain every time I fill…

Actually many places with real competition, near production and very little regulation in the U.S. did have $1.00 or so gallon gas, i.e. much of the south and near energy producing areas in LA for example.

I wouldn't be surprised to find out that gas retailers in California would continue to price their gas at ~$5.00 a gallon when they don't actually have any to sell (or conversely, aren't selling any at all) because of how inelastic and regulated the supply is.

Everyone in CA that I know is ready to be done with gas. Regrettably, Californians also pay some of the highest costs for electricity (more expensive than HI[1]) so we're out of the frying pan and into the fire. Nothing more American than regulatory capture (looking at you SDG&E and CPCU)

[1] https://www.cbs8.com/article/money/amped/san-diego-has-the-h...

edit: source for $1 gallon https://abc7news.com/gas-prices-lowest-in-a-decade-13-states...

Re: The U.S. is now energy independent

#45

Post by ineedasername »

jmpman wrote: post #34

Can someone explain why during the start of Covid lockdowns, gasoline prices didn’t drop to $1.00/gallon? There was no demand, and plenty of supply. The simple supply/demand curve of my high school economics memory, seems to imply prices should have taken a dive to virtually zero. Sure they went down, but nowhere near what the models I’d learned would predict. Just a rant that lit up inside my brain every time I fill…

OPEC oil production dropped off a cliff after things shutdown in 2020, so the supply did not remain high. At the same time, at least a little demand shifted rather than disappeared by increasing home deliveries of goods and services.

In the US, gasoline prices still dropped about 30% off their most recent pre-covid prices.

There are also fixed costs involved with transporting gasoline, running a gas station, gas tax, etc that will not change much with supply & demand.

Given all of this, gas prices seem to mostly correspond to what was happening: production plummeted, demand plummeted with some modest shifts, and so prices at the pump dropped by a relatively modest 30%.

Re: The U.S. is now energy independent

#46

Post by cc101 »

I have scanned the comments, but I have not read the article. The title begs an imponderable issue. There is energy used in making every thing we import and in every thing we export. This invisible energy can be shipped back and forth multiple times. How do you add all that up to achieve an answer?

Re: The U.S. is now energy independent

#47

Post by 8note »

XorNot wrote: post #22
hammock wrote: post #17

Producing more oil than you consume does not, as the article claims, make you truly energy independent. The US will always have to import oil from other countries to meet its needs, because not all oil is the same, and the type of oil that the US produces is not the type that it needs. For a better understanding: https://www.api.org/news-policy-and-issues/blog/2018/06/14/w...

A better argument would be whether there are any restrictions at all that, during a world shortage, would prevent companies producing oil from exporting it to other parts of the world to the detriment of local US consumers. There aren't, so the US isn't independent on anything: the regular citizen will get priced out of the market regardless of their need the moment there's profit to be made elsewhere.

There's no current threat of being priced out, the major oil producers are too busy trying to get market share on low cost oil.

Going forward, will this ever be an issue? Peak oil is coming from societies moving away from oil and adopting renewables. By the time OPEC et Al start raising their prices, they will be irrelevant to most US consumers

Re: The U.S. is now energy independent

#48

Post by yucky »

hammock wrote: post #17

Producing more oil than you consume does not, as the article claims, make you truly energy independent. The US will always have to import oil from other countries to meet its needs, because not all oil is the same, and the type of oil that the US produces is not the type that it needs. For a better understanding: https://www.api.org/news-policy-and-issues/blog/2018/06/14/w...

The better reason to import oil is to avoid using the strategic reserves. Even if the US us technically energy independent it should still import oil.

Re: The U.S. is now energy independent

#49

Post by chiefalchemist »

jimmygrapes wrote: post #15
chiefalchemist wrote: post #13

> The impact on geopolitics extends to a potential Russian invasion of Ukraine. Disruptions to European energy supplies would have a less direct effect on the U.S. than they might have in an earlier era. Put another way, the USA now has less incentive to "keep the peace." Putin's drama and posturing, plus the USA being untethered...that's not a good combination.

I don't actually expect any conflict there, but I also remember the old saw: "gas is up, polls are down? start a war!" I hope that joke doesn't apply. As Sting said, "Russians love their children too"

That is certainly a consideration. There's what Biden will do (in the context of his unflattering polling numbers). And then there's what Putin would like to see Biden do. If I were to wager I'd say currently Vlad is more than covering the spread.

Re: The U.S. is now energy independent

#50

Post by jandrese »

anm89 wrote: post #31

For how long? I've seen estimates claiming that at the rate we are depleting the major shale areas the new glut of shale wells will go into a steep production decline around 2024-26. I dont have all the data but from what I've heard this is pretty temporary.

I’m hoping the transition to electric vehicles will be in full swing by that point. While we use oil for more than passenger cars if the decline in demand could more or less match the reduced supply it would be ideal.
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