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The US's next step in becoming a third-world country: Promote extractive industries, export the product for the benefit of the 1%, internalize the costs to the detriment of the 99%.
by rifek on Tue Mar 25th, 2014 at 10:18:55 PM EST
For a considerable part of its history, the US was the worlds leading oil exporter. Seemed to work out pretty well.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Mar 26th, 2014 at 04:49:42 PM EST
[ Parent ]
Because in addition to exporting, we fueled our own expanding economy with a resulting competitive advantage over energy-importing countries.  1973 was the end of that advantage, and it's been downhill ever since.
by rifek on Wed Mar 26th, 2014 at 06:59:59 PM EST
[ Parent ]
Before 1973, oil already traded on the international market. This means that US firms had to pay just as much as foreign buyers. Hence, being an oil exporter did not give the US a competitive advantage, just like Sweden being an iron ore exporter does not give our steel mills any advantage.

Except, in both cases, that the industry creates know-how. But that is true after the US became an oil importer as well.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Mar 27th, 2014 at 07:11:25 AM EST
[ Parent ]
The argument is that with the US being a net exporter and domestic oil production being cartelised, the US oil industry was a price-setter, not a price-taker. That ended when peak oil in the contiguous US states was reached in the early 1970s. But you know all this, you're in ASPO.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 27th, 2014 at 07:47:56 AM EST
[ Parent ]
Sure, but it was a price-setter for everyone, not just for US consumers.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Mar 27th, 2014 at 08:33:39 AM EST
[ Parent ]
That is like saying that the US Navy does not provide the US a privileged position in the international trade system because the US keeps the sea lanes open for everyone, not just US-flagged vessels.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 28th, 2014 at 06:42:51 PM EST
[ Parent ]
Hard to see how American firms profit from having to pay for keeping the SLOC's open, while say German or Swedish or Danish firms are freeriders.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Mar 29th, 2014 at 09:18:19 AM EST
[ Parent ]
The trade system has rules. The Americans are the ones making the lion's share of those rules, because they are the guy with the gun. And of course they make them such that tribute flows to America.

One of the most important of those rules is "the US can run a perpetual foreign deficit." That's a quite amazing privilege, and one afforded to nobody else in the American trade bloc.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Mar 29th, 2014 at 04:38:57 PM EST
[ Parent ]
The American dominance of the global trade system does not have its roots in the US role as an oil exporter, but rather the US role as an economic and military powerhouse.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Mar 29th, 2014 at 05:10:45 PM EST
[ Parent ]
Jake talked about the US Navy (and not Texaco) keeking the sea lanes open. The analogy is that just like keeping the lanes open is a benefit to the power that keeps them open, setting prices as an oil exporter also has a benefit for the domestic industry.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Mar 30th, 2014 at 06:15:29 AM EST
[ Parent ]
Starvid, I don't understand if all oil use (US) had to be purchased on the international market. Were there no direct sales from producers to customers in the US? If not, how are US auto fuel prices so decoupled from EU and others?

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Mar 27th, 2014 at 07:48:44 AM EST
[ Parent ]
Look, if oil prices were to fall below the world market price in the US, arbitrageurs would quickly remove that difference, barring infrastructure limits.  

The difference in auto fuel prices between the US and Europe is all about taxes. If we didn't tax gas in Europe, it would be as cheap as in the US.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Mar 27th, 2014 at 08:35:39 AM EST
[ Parent ]
How do you explain the spread between WTI and Brent?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 27th, 2014 at 09:15:52 AM EST
[ Parent ]
Infrastructure limitations. Keystone XL will eliminate them.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Mar 27th, 2014 at 09:28:06 AM EST
[ Parent ]
since two years, infrastructure limitations were circumvented by vastly increased use of tar sand trains (includes fracked hydrocarbons)... and the number is still increasing strongly.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Mar 27th, 2014 at 09:56:09 AM EST
[ Parent ]
Without the trains, the divergence would be even greater. It's no coincidence that the divergence materialized at the same time as the shale oil boom.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Mar 27th, 2014 at 10:53:35 AM EST
[ Parent ]
You mean financial arbitrage is not the only force at play? I'm SHOCKED, I tell you, SHOCKED

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Mar 30th, 2014 at 06:19:05 AM EST
[ Parent ]
However:

  1. External costs were never considered, and are only now truly coming to light. Environmental costs are proving to be truly devastating.

  2. With external costs not considered, we had a century and a half of unsustainable development, a costly misdirection for civilization. One example, the complete illegal dismantling of the Los Angeles public transport system in favor of the internal combustion engine.

  3. Fossil fuels delayed a push toward sustainability that had already begun in the late 1800s. By the 1930s, in the US alone, there were already millions (6?) of water pumping windmills, and over 30,000 windmills to produce electricity in the mid-west. Killed by the Rural Electrification Administration.

  4. We are only now beginning to see the costly results of this misdirection.

  5. So actually, hasn't worked out so well after all, if the long view means a healthy sustainable civilization.


"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Mar 27th, 2014 at 05:54:36 AM EST
[ Parent ]

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