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Wall Street Oasis » Forums » I-Banking Bullpen
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Why don't we drill our own oil?
 

kelleykid's picture
kelleykid
      CO
 
(Senior Orangutan, 392
 
Points)
 on 4/23/11 at 6:54pm
oil.jpg

We are getting raped at the pump and oil companies are due to release earnings which are projected to be records...of course

Given our economy and lack of jobs specifically...

Why don't we drill more of our own oil?. If we were to subsidize imported oil with our own even driving the price back down to ~$2.50 a gallon while hiring thousands to work for this operation...it would spike our GDP (think of the multipliers)

Furthermore, the profits realized, aside from alleviating some of our debt issues, could subsidize the green movement and invest in alternative power.

Seems like a no-brainer to me. Why don't we do this?

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  • I-Banking Bullpen
The Phantom's picture

Supply & Demand

The Phantom
      HF
 
 
(Senior Gorilla, 965
 
Points)
 on 6/29/11 at 7:00am

Supply & Demand

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UofCOandG's picture

I hope the US never drills

UofCOandG
     
 
(Senior Monkey, 90
 
Points)
 on 4/23/11 at 7:16pm

I hope the US never drills for oil, more money for me ma fuckas

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Gekko21's picture

The vast majority of the oil

Gekko21
     
 
 
(Neanderthal, 2,671
 
Points)
 on 4/23/11 at 7:22pm

The vast majority of the oil we use comes from Canada and the US (with Saudi Arabia providing oil for political reasons). The reason we aren't drilling for more oil in the US is because of government prevention (ANWAR?). As for why the government doesn't actively drill its own oil, I can only guess that the political pressure is too much. Can you imagine the outrage if the government was drilling for oil and charging fair market prices that are above $4 a gallon.

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

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UFOinsider's picture

......This way no one truly

UFOinsider
      O
 
(Human, 10,333
 
Points)
 on 4/23/11 at 9:29pm

......This way no one truly has us by the balls.

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

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kelleykid's picture

@gekko21 "government was

kelleykid
      CO
 
(Senior Orangutan, 392
 
Points)
 on 4/23/11 at 9:45pm

@gekko21 "government was drilling for oil and charging fair market prices that are above $4 a gallon."

I know we drill but wouldn't the additional drilling allow for our government to charge its citizens with below market price? - act like a subsidy?

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bfin's picture

kelleykid wrote: @gekko21

bfin
      CF
 
(Neanderthal, 2,772
 
Points)
 on 4/23/11 at 9:48pm
kelleykid:

@gekko21 "government was drilling for oil and charging fair market prices that are above $4 a gallon."

I know we drill but wouldn't the additional drilling allow for our government to charge its citizens with below market price? - act like a subsidy?

^^^this implies the government acts logically.. and is economically efficient...

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

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LIBOR's picture

We drill about 7 million of

LIBOR
      EN
 
(Neanderthal, 2,156
 
Points)
 on 4/23/11 at 9:54pm

We drill about 7 million of the 20 million barrels we use each day. Gekko is right, we get the most from Canada (followed by Mexico, then Venezuela, Saudi Arabia and Nigeria in no particular order).

The reason we don't mostly has to do with environmental policy.

looking for that pick-me-up to power through an all-nighter?

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Gekko21's picture

kelleykid wrote: @gekko21

Gekko21
     
 
 
(Neanderthal, 2,671
 
Points)
 on 4/23/11 at 10:10pm
kelleykid:

@gekko21 "government was drilling for oil and charging fair market prices that are above $4 a gallon."

I know we drill but wouldn't the additional drilling allow for our government to charge its citizens with below market price? - act like a subsidy?

In this country any oil drilled by the government that is >$0 is probably "too high" a price to a politician. There is also the question of how that oil that is drilled by the government is delivered if it is at a "below market price". The cost of gasoline is basically cost on inputs (oil)+refining costs+transportation costs+taxes. Who would get this cheaper oil. Any gas that is refined from government oil could be sold at a lower price and would undercut any companies that didn't have government oil and would put them out of business.

The best thing you can do is limit all the environmental red tape that exists and let oil companies start drilling more.

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

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marcellus_wallace's picture

Have you read up on the

marcellus_wallace
      ST
 
 
(King Kong, 1,617
 
Points)
 on 4/23/11 at 11:13pm

Have you read up on the Bakken? Google it.

America has a lot of unconvential oil that is high grade that can be drilled using hydraulic fracturing and other new methods. The problem? There is absolutely no infrastructure, cushing is full and has been full for a while.

They are moving the bakken by flippin trunks basically at this point, every other method/pipeline is full. Yet the US Government is almost blocking "Key stone" right now.

You need infrastructure to move and drill unconvential oil. Unlike the OPEC nations where you can just swim in that stuff.

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rickyross's picture

The U.S. and Saudi Arabia are

rickyross
      IB
 
(Gorilla, 542
 
Points)
 on 4/24/11 at 2:10am

The U.S. and Saudi Arabia are actually pretty close in terms of daily oil production. Only difference is that we're at full capacity and they're not.

People tend to think life is a race with other people. They don't realize that every moment they spend sprinting towards the finish line is a moment they lose permanently, and a moment closer to their death.

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kalga's picture

The U.S has also been

kalga
      IB
 
(Senior Baboon, 235
 
Points)
 on 4/24/11 at 2:49am

The U.S has also been sporting a pretty significant emergency oil reserve and inventories are rising have risen to nearly 360 mmb.

If anything the U.S might need to import more oil to augment domestic supply since U.S crude imports are down over 1 MMB/d over the past 3 years. Although my memory of the demand picture is a bit choppy so I can't say for sure but if going into backwardation is any sign, demand looks healthy but might be curbed if prices keep rising.

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thor1000's picture

kelleykid wrote: @gekko21

thor1000
      IB
 
(Baboon, 159
 
Points)
 on 4/24/11 at 3:20am
kelleykid:

@gekko21 "government was drilling for oil and charging fair market prices that are above $4 a gallon."

I know we drill but wouldn't the additional drilling allow for our government to charge its citizens with below market price? - act like a subsidy?

Ah da da, greetingz fellow comrade, I see you are a fan of the planned economy, good that is good, we shall drink vodka to that. The capitalist pigs should learn from the glorious soviet 5 year plans

Oh, if the food prices go really high we can set up kolkhoz farms and if you no work then you be sent to gulag.. on aljaska.

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futurectdoc's picture

We aren't allowed to drill

futurectdoc
      IB
 
(King Kong, 1,675
 
Points)
 on 4/24/11 at 8:19am

We aren't allowed to drill where it would be best/easiest. There is basically a moratorium in the gulf and most of the drilling has been forced further offshore into deeper and more technically complex areas. America does have massive shale oil reserves in the Bakken as mentioned, but it is only economically feasible at >40 a barrel. Ultimately what we need is to recognize that America's first priority should be energy independence and after that we can transition to "green energy" not the other way around. I'm pretty sure most people on this board, myself included are too young to remember the OPEC boycott, but that's the real reason to want to be energy independent, although the Canadians and Mexicans are a bit more friendly than the Muslims.

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cashnhonies's picture

kelleykid wrote: @gekko21

cashnhonies
     
 
(Monkey, 50
 
Points)
 on 4/24/11 at 11:31am
kelleykid:

@gekko21 "government was drilling for oil and charging fair market prices that are above $4 a gallon."

I know we drill but wouldn't the additional drilling allow for our government to charge its citizens with below market price? - act like a subsidy?

And repeat what happened in 1979?

The thing is, high oil prices reflects supply/demand and if we make oil cheap, those who need it the most won't be able to get it. That would hurt the economy more than just high oil prices.

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ctw930's picture

We do drill for a lot of our

ctw930
      ST
 
(Monkey, 36
 
Points)
 on 4/24/11 at 11:33am

We do drill for a lot of our own oil and we get even more from Canada. The USA is actually an oil exporter and exports up to 9% of its drilled oil. The reason oil is this expensive is because of a week dollar and a whole lot of speculation. Their is absolutely no need for a gallon of oil to cost $112 other than the former reasons.

Also Have you completely forgot about the BP oil spill. After that Obama put a stop on all new drilling permits for off shore drilling. With out being able to drill more in the Gulf and fracking ( the procedure used to drill for shale) pretty much putting cancer causing chemicals right into our water supply you better just hope that we find a completely new and different energy source that won't be speculated on like oil is today. That is the only way we will ever see cheap energy again.

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ctw930's picture

marcellus_wallace wrote: Have

ctw930
      ST
 
(Monkey, 36
 
Points)
 on 4/24/11 at 11:46am
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konig's picture

The US buys oil from Saudi

konig
      IB
 
(Senior Orangutan, 446
 
Points)
 on 4/24/11 at 1:20pm

Greed is Good.

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Barboone's picture

Ok. Here it is let me give it

Barboone
      IB
 
 
(Senior Gorilla, 828
 
Points)
 on 4/24/11 at 1:52pm

"Climbing a mountain that's only getting steeper"
-Barboon

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marcellus_wallace's picture

About Oil and Speculation:

marcellus_wallace
      ST
 
 
(King Kong, 1,617
 
Points)
 on 4/24/11 at 2:29pm
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ctw930's picture

marcellus_wallace

ctw930
      ST
 
(Monkey, 36
 
Points)
 on 4/24/11 at 3:00pm
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PossumBelly's picture

Oil companies do not make

PossumBelly
      IB
 
 
(King Kong, 1,689
 
Points)
 on 4/24/11 at 6:49pm
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fitzmanon's picture

Because American oil is more

fitzmanon
      IB
 
(Senior Monkey, 72
 
Points)
 on 4/25/11 at 3:47pm

'Oh, yeah, that's right. That's what's it's all about, all right. But talkin' about it and bein' it, that's two different things.'

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UofCOandG's picture

Cartwright wrote: Oil

UofCOandG
     
 
(Senior Monkey, 90
 
Points)
 on 7/1/11 at 10:55am
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down on the upside's picture

ctw930 wrote: The real

down on the upside
      CD
 
 
(Baboon, 143
 
Points)
 on 7/1/11 at 1:11pm
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down on the upside's picture

konig wrote: The US buys oil

down on the upside
      CD
 
 
(Baboon, 143
 
Points)
 on 7/1/11 at 1:16pm
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Asatar's picture

Come back when you have

Asatar
      O
 
 
(Neanderthal, 2,016
 
Points)
 on 7/1/11 at 2:19pm

See my other WSO blog posts>

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Argonaut's picture

konig wrote: The US buys oil

Argonaut
     
 
(King Kong, 1,762
 
Points)
 on 7/1/11 at 2:25pm

More is good, all is better

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Argonaut's picture

ctw930 wrote: The real

Argonaut
     
 
(King Kong, 1,762
 
Points)
 on 7/1/11 at 2:34pm

More is good, all is better

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excelsior's picture

thor1000 wrote: kelleykid

excelsior
      O
 
(Senior Baboon, 238
 
Points)
 on 7/1/11 at 2:44pm
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excelsior's picture

Cartwright wrote: Oil

excelsior
      O
 
(Senior Baboon, 238
 
Points)
 on 7/1/11 at 2:47pm
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Cardinal's picture

UofCOandG wrote: Cartwright

Cardinal
     
 
(Orangutan, 309
 
Points)
 on 7/1/11 at 2:50pm
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Cardinal's picture

UofCOandG wrote: Cartwright

Cardinal
     
 
(Orangutan, 309
 
Points)
 on 7/1/11 at 2:50pm
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Argonaut's picture

Cardinal wrote: UofCOandG

Argonaut
     
 
(King Kong, 1,762
 
Points)
 on 7/1/11 at 4:26pm

More is good, all is better

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Lubyanka's picture

Gekko21 wrote: The best thing

Lubyanka
     
 
(Baboon, 137
 
Points)
 on 7/2/11 at 1:25pm
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UofCOandG's picture

Quote: I am from Pittsburgh

UofCOandG
     
 
(Senior Monkey, 90
 
Points)
 on 7/2/11 at 4:02pm
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RKA's picture

Btw how many proven oil

RKA
      O
 
(Chimp, 8
 
Points)
 on 7/2/11 at 4:24pm

Oil & Gas monkey

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freroht's picture

There are few misnomers in

freroht
      O
 
(Baboon, 152
 
Points)
 on 7/2/11 at 5:29pm
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Argonaut's picture

XOM produces only about 3% of

Argonaut
     
 
(King Kong, 1,762
 
Points)
 on 7/2/11 at 7:32pm

More is good, all is better

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You agree to defend, indemnify, and hold harmless the Company, its officers, directors, employees and agents, from and against any claims, actions or demands, including without limitation reasonable legal and accounting fees, alleging or resulting from your use of the Material or your breach of the terms of these Terms and Conditions. The Company shall provide notice to you promptly of any such claim, suit, or proceeding and shall assist you, at your expense, in defending any such claim, suit or proceeding.

General.

The Company makes no claims that the Materials may be lawfully viewed or downloaded outside of the United States. Access to the Materials may not be legal by certain persons or in certain countries. If you access the Web Site from outside of the United States, you do so at your own risk and are responsible for compliance with the laws of your jurisdiction. These Terms and conditions are governed by the internal substantive laws of the State of New York, without respect to its conflict of laws principles. Jurisdiction for any claims arising under this agreement shall lie exclusively with the state or federal courts within New York, New York. If any provision of these Terms and Conditions are found to be invalid by any court having competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions of these Terms and Conditions, which shall remain in full force and effect. No waiver of any term of these Terms and Conditions shall be deemed a further or continuing waiver of such term or any other term. Except as expressly provided in additional terms of use for areas of the Web Site a particular "Legal Notice," or Software License or Material on particular Web pages, these Terms and Conditions constitute the entire agreement between you and the Company with respect to the use of Web Site. No changes to these Terms and Conditions shall be made except by a revised posting on this page.

PRIVACY POLICY

The Company recognizes that you are concerned about privacy. We are committed to preserving your privacy and safeguarding your sensitive information. The following statement describes the general information-gathering and usage practices of our sites.

Our staff, contractors, Internet service providers and others involved in this site follow this policy or similarly strict policies regarding your Information.

Disclosure

The Company is committed to fully disclosing our policies regarding the collection, use, maintenance, disclosure and security of personal information obtained from users of our site. The term "personal information" includes a name, address, email address, or any other information which could be used to contact you directly or to identify you personally.

Use and Disclosure Limitations

The Company only uses personal information about its Web site users for specific purposes. We do not share user information with third parties except when we have told users about the disclosures, when we have prior consent, or when required by law.

Use Policy: When the Company gathers personal information from users, we ask for permission first. We also disclose, at the time of collection, how the information will be used by us. Personal information is used for activities such as auto-completion of commonly-used forms and helping us contact you when you solicit information from us.

Disclosure Policy: We do not normally disclose personal information to anyone outside of the Company unless we have previously informed users about the disclosures. However, some data may be used from time to time by outside contractors, including auditors or consultants, to assist us in carrying out necessary financial or operational activities. These uses will be consistent with this privacy policy and all contractors using this potential personal information must agree to safeguard it, to use it only for the authorized purpose, and to return it or destroy it upon completion of the activity.

The Company might be required to disclose personal information in response to a valid legal process such as a subpoena, search warrant or court order.

Although unlikely, it is possible that we may have to make certain disclosures to ensure the security of our Web site, to protect its integrity, or to take precautions against potential liability. In any of these situations, we will take any reasonable steps to limit the scope of the data disclosed.

Web Logs: The Company maintains standard Web logs that record basic information about visitors to our Web site. These logs contain: * The Internet domain from which you came to our Web site. * Your IP address. An IP address is a series of numbers which uniquely identifies your connection to the Internet. Although it is possible in some instances, certain types of IP addresses may be used by interested persons to identify users but we do not attempt to identify users in this way. * The type of browser (e.g., Internet Explorer or Netscape) and operating system (e.g., Windows 98) you use. * The date and time you visited the site, and the pages you saw.

We use Web log information to design our Web site, identify popular features, and in similar ways. We do not try to identify individuals from Web logs or to link Web logs to other user information. However, if someone tries to damage our Web site or use it in an unauthorized or illegal way, we may share Web log information with law enforcement agencies. The Company may provide aggregate information such as the number of users who visit particular pages of the site, or the number of people who link to certain external sites from our site, to other parties.

Changes to Privacy Policy

The Company's features and services will change over time and our information-gathering practices and policies may also change.

While our philosophy of protecting user information from inappropriate uses and disclosures will not change, this policy will be updated occasionally to include any change that materially affects the collection, maintenance, use, or disclosure of personal information.

Forum Topics

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  • Anyone else apply/accepted to WUSTL's MSF program for this coming fall? If so, please provide your profile, your track (Quant/Corporate) and why you chose WUSTL. Feel free to pm me if you don't want to discuss your profile in public. I'm trying to get information on select MSF...
    WUSTL MSF Applicants (2013-2014)
  • I haven’t watched a non-007 movie in almost a year, and over the weekend I finally broke that streak by watching “Dirty Harry” and “Magnum Force.” Needless to say, the movies had an effect other than making me wish that I was a cop working in 1970s San Francisco. Dirty Harry extols...
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  • Fellow Primates, just a quick reminder on some perks for WSO Conference attendees and to let you know that we are quickly running out of dicounted tickets for the 2013 WSO Conference and we are LESS THAN 2 MONTHS AWAY! So if you haven't jumped in on the current deal, you shoudlnt...
    WSO Conference 2013 Perks...Time Running Out to Get 50% Off
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    Taleb: @EmanuelDerman Emanuel, you are a smart man, why the fuck are you still talking about CAPM?
  • Doing PWM SA this summer at BB. It is the junior/senior internship and hopefully will turn into a FT offer. I would like to go on to B School. But here are my questions... 1. I did 8 years in the Marines, with solid leadership gigs. How many years of FT work would I need after I graduate to...
    Question for those that have first hand knowledge
  • I don't know why I find this funny: http://www.politico.com/story/2013/05/apple-taxes-offshore-senate-investigation-91633.html?hp=t1 What do you...
    Apple Tax
  • I have a question for people in IB. What are the roles of the right bookrunners? Let's say you are an institutional investor. You always go to the lead bank to submit your commitment and hopefully receive allocations. What exactly would a right bookrunner do? Do they control the...
    Role of Right Bookrunners
  • I emailed an alumnus (Managing Director of MM IB | hitter | from PE to IB) a couple months ago asking for an internship and he got back to me yesterday. We are having lunch in one of the very fancy cafes of Boston soon. Since I am new to this game of networking, I am kind of amazed to go out to...
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Upcoming Events

  • Advanced M&A Accounting & Tax Topics Webcast (Live)
    May 21 2013 - 6:00pm - 9:00pm
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    May 22 2013 - 6:00pm - 8:00pm
  • Financial and Valuation Modeling Boot Camp (Dallas)
    May 23 2013 - 8:00am - May 25 2013 - 5:00pm
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Highest Ranked Content

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I used to work with a guy that had everything on the surface, but absolutely nothing inside. The guy was 6 feet tall, good-looking, charismatic, multi-lingual, graduated from a top business school, and had made MD at a bulge bracket investment bank. Yet he couldn’t remember the last time he...
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Assuming that you have access to no financial products such as FactSet, Bloomberg, CapitalIQ, Thomson or otherwise, thought it would be helpful to give a step by step guide on how to ramp up on a new company from your home computer. Using FaceBook as an example. Lets go ahead and start with the...
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