American oil companies are starting to scream "mayday."

CNN ^ | 22 January 2016 | Heather Long

[DanZ]

“- Aren’t many refineries that can handle the trash from Venezuela. -”

There are MANY Coker Units on the Gulf coast - They specialize in high sulfur heavy crudes like those from Venezuela

[Zhang Fei]

Yep, and that's why as I much as I hate to say it, there does need to be some government control over energy production, as a matter of national security. How much blood and treasure has been lost for the sake of ensuring the flow of Saudi oil?

Not very much, considering how important oil is as a feedstock for modern industry. WWI killed 100K Americans. WWII killed 400K Americans. The Korean War killed 40K Americans. The Vietnam War killed 60K Americans. In contrast, the total number of Americans killed in the Middle East numbers about 10K. WWII alone consumed 2 years worth of US GDP. In current economic terms, that's about $35T. In comparison, the Iraq and Afghan wars combined cost about $1T. But the body counts are not even remotely similar - 400K for WWII, and ~10K for Afghanistan and Iraq. Defense spending, outside of special appropriations for Iraq and Afghanistan, has hovered between 3% and 5% of GDP since the Cold War ended. Most of that relates to providing protection for Europe against Russia and the Far East against China.

Government control over oil production will work about as well as government control over health insurance - employment rolls will be padded and costs will rise. We have a big military because we don't want anyone engaging in land grabs. The lesson of WWII for American isolationists is that land grabs that are unopposed have a way of snowballing. It's a lesson of history from time immemorial that the American (and European) public chose to ignore even as Germany and Japan morphed into continental-scale empires. It took Pearl Harbor and the German declaration of war on the US to shake the American public out of its navel-gazing complacency.

[thackney]

Shale oil requires a certain price level to warrant drilling. That level is much lower than it was a decade ago, by the way. But once the well is drilled, its drilled. Drop the price all you want, the well keeps on producing.

The catch is, the well doesn't keep producing at that same flow rate.

[Smokin' Joe]

Another one was "A major corporation is hiring geologists and drilling engineers hand over fist in Denver!"

"Who?"

"McDonalds!"

[central_va]

My inflation calculator says 9$ in 1985 = $20.50 in 2015.

[03A3]

Obviously the highly leveraged companies won’t, but those that own their assets will recover just fine. Drilling and completions will continue with the service companies being able to charge what they want.

[PAR35]

Thanks. My original answer wasn’t well worded. I’ll correct it: ‘There aren’t many refineries that can handle that trash efficiently’.

The Citgo refineries were set up to deal with the heavy sour from Venezuela. While others can handle some the heavy sour, most weren’t really configured for it.