Skip to comments.The Ukraine Crisis Is Bolstering America's Oil And Gas Boom
Posted on 03/11/2014 12:50:56 AM PDT by 2ndDivisionVet
The hand-wringing over what to do to help Ukraine has had a very positive impact on the U.S. oil and gas industry. Politicians like Sen. Lisa Murkowski (R-AK) are seizing on the crisis to call for a lifting of the ban on U.S. oil exports the better to counterbalance Russias petro-influence. While the Wall Street Journal this morning wrote that western politicians are working on a variety of options to help loosen Russias energy stranglehold on Ukraine including larger exports of U.S.-made natural gas.
Nevermind that the U.S. currently exports no natural gas in the form of LNG because new liquefaction plants wont be completed until late 2015. The bigger point was made by economist Ed Yardeni in his morning note today: By invading Crimea, Russian President Vladimir Putin may have succeeded in resolving the debate in the U.S. about whether or not we should export natural gas and crude oil.
Yardeni noted this New York Times editorial over the weekend as proof positive that the Obama administration (and the rest of the left-leaning side of the political class) now embraces U.S. energy exports as a potentially powerful political tool. When even the New York Times editorial board defies the anti-fracking lobby to conclude that natural gas exports could serve American foreign-policy interests in Europe it indicates that LNG exports are something we can all agree on....
(Excerpt) Read more at forbes.com ...
Frack we must for our cause it is just!
“Frack, Baby, Frack!”
Obama, the worst Fracking Democrat in the country.
As Bill Haley would sing, “We’re Gonna Frack Around the Clock Tonight, Frack, Frack, Frack till the broad daylight, we’re gonna Frack, we’re gonna Frack, around the clock tonight!”
“The Ukraine Crisis Is Bolstering America’s Oil And Gas Boom”..........
Does that explain why our gasoline prices have jumped from very near the $2/gallon mark to now be at $3.60 mark in a few short weeks?
Exporting gas will cause the price to rise in America, our gas is MUCH cheaper than in Europe or Asia because of the export ban.
This will result in higher home heating bills and electricity bills as well as hurt energy intensive American industries’ competitiveness. That’s not something I think we need right now. Especially, considering that the economics of using LNG exports to hurt Russia doesn’t make sense.
This is being pushed for by parties who stand to reap a financial windfall.
I’m going to say that this could backfire disastrously in the political arena if the domestic price rises enough. The American people are in no mood to freeze in the dark for the purpose of geopolitical chess playing, let alone to make energy companies richer. It’s a big risk for Republicans to be associated with promoting this idea.
Something like that could help usher in president Elizabeth Warren.
You’re exactly right. The combination of high energy prices and a declining U.S. dollar is going to result in a scenario where more and more Americans will find their own energy unaffordable.
Not entirely true.
We export very little, but not zero.
U.S. Natural Gas Exports and Re-Exports by Country
Gasoline was at $2 a few weeks ago? Where?
Very little rise in US pricing and it is arguable they won’t continue to rise anyways.
Believing the demand curve of economics will rule without limits while pretending the supply curve doesn’t exist is foolish.
LNG EXPORTS: HOW MUCH WILL THEY IMPACT U.S. NATURAL GAS PRICES?
Why would US energy companies export LNG to Europe when Asia is offering to pay twice as much for LNG than Europe.
Europe needs to get fraking before fed-up Europeans burn the EU oligarchs at the stake.
The NG market in America is unstable at present, because the economics of fracking havent really stabilized so that the producers actually know what their production will be over the life cycle of a well.The American people are in no mood to freeze in the dark for the purpose of geopolitical chess playing
But what we do think we know is that there is a LOT of gas down there, so we can produce a lot of it for a long time. Meaning that the supply curve, which you are assuming is a constant, actually has a steep upward slope with increasing price.The Arabs had an embargo back in 73, but since then even OPEC doesnt embargo exports. Because what economic sense is there in driving up the price, if you dont actually sell any product at that price?? So here we are, embargoing our friends to help Russia get maximum advantage over them from its supply of NG!
Drilling on private land is the only part of the economy Obama hasnt killed, and the embargo on exporting fuel to our friends is costing our economy. Its too expensive; we cant afford it.
It is the Democrats who are engaged in geopolitical chess playing with their embargo - and they're on the wrong side.
“Meaning that the supply curve, which you are assuming is a constant, actually has a steep upward slope with increasing price.”
No, I’m not assuming that. I’m well aware that more gas is recoverable at higher prices. That still means US consumers will pay more. Do you understand that?
The embargo is to protect America’s energy independence and has been supported by Democrats and Republicans.
None of the people you want to sell gas to are our “friends” in any real sense. Furthermore, we do not have enough gas to export drive down world prices to the point that Russia will “collapse” or any nonsense like that.
Part of the cost rise is due to a shift from heater oil to gasoline production for the Spring. Some refineries are down for repairs, thus limiting production of anything.
Other price rises are from unfounded fears that something that won’t affect us will happen in the Ukraine. That’s Europe’s problem other than the US guaranteeing them liquid petroleum gas (LNG) etc, esp. from the Keystone Pipeline (yeah, Obama and Kerry are going to OK that line, right?).
Also, look at any rise in state sales taxes on gasoline.
One of my prized documents from the National Archives is a 1935 list of “State and Federal Gasoline Taxes as of June 6, 1935”.
Want to crap in your hat? Hold on: State; State tax; Federal Tax; Total (which does not includE County and City taxes)
CALIFORNIA: State = 3 cents; Federal = 1 cent; Total = 4 cents
DELAWARE: State = 3 cents with a 1 cent increase coming in July, 1935; Federal = 1 cent; Total = 4 cents
Illinois: 3 and 1 cents
Kentucky: 5 and 1 cents
Massachusetts: 3 and 1 cents
Mississippi: 6 and 1 cents
New Mexico: 5 and 1 cents
Rhode Island: 2 and 1 cents
Texas: 4 and 1 cents
Wyoming: 4 and 1 cents
Arkansas: 6-1/2 cents and 1 cents
READ ‘EM AND WEEP!
None of the people you want to sell gas to are our friends in any real sense.
Nevertheless,Furthermore, we do not have enough gas to export drive down world prices to the point that Russia will collapse or any nonsense like that.It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. - Adam Smith- and it is not from the benevolence of the US that importers of NG should be able to expect their heat - but from our regard for our own interest. High prices are of no value to a seller who actually will not sell. Selling something that we have so much of that we can readily afford the secondary-effect increase in domestic prices is clearly in our interest. The embargo is an anachronism, and that is the best that can be said for it. It was established when we didnt have the understanding of what is under our feet, and how to extract it. And even then, it had stupid effects. For example, it made sense to export Alaskan fuels to Japan back then, even if it meant importing an equal amount from OPEC. It made sense for simple geography/transportation reasons.
Russia wont collapse in any event - but on the margin, its influence will be moderated if they are not sole source for fuel.It is far more nearly a hostile act toward importers to refuse to deal with them than it is toward other exporters if we do.
Increases in our domestic prices will be a second-order effect, small enough to mitigate with subsidies if necessary, from the huge profits from to be had from exporting.
Look at the source. It’s a group promoting the interests of capital. They think our capital gains tax rate should be cut, so Mitt Romney can pay an even lower share of his income to taxes than he does now. That’s what we need, billionaires paying 5% taxes while the middle class pays 30-50%.
Promoting these kinds of economic policies are probably the main reason why the GOP struggles to beat the likes of Obama.
Policy based upon jealousy of others, is certain to be bad policy.
I would rather not see FR used to promote class warfare. I would rather work to create jobs and the prosperity that flows from them.
Ignoring the supply curve of economics while pretending the demand curve reins without limits is rather foolish.
Promoting capitalist ideals is good. For the economy to thrive, business and profits must be allowed to grow.
Taxing capital gains is counter productive.
Not to mention, it is taxes on income that was already taxed that year.