European Militaries Don't Need US? Oh Really??

[Kuciwalker]

China is buying as much oil as they can and still have huge deficits. The assertion that they'll stop buying oil from other suppliers once they secure more oil from Canada is hilarious.

PS: Do you know where most of China's current oil comes from?

I officially give up. You do not understand markets or economics, period. Hell, you don't even understand ****ing partial derivatives.

[Asher]

I officially give up. You do not understand markets or economics, period. Hell, you don't even understand ****ing partial derivatives.

I'm glad you're giving up, because it's frustrating dealing with someone who always deals with markets in the theoretical with no appreciation for the real world. To you it's a simple issue of supply and demand. The concept of logistics seems foreign to you.

[Kuciwalker]

The partial derivative of Chinese oil consumption wrt time: some positive number.

The partial derivative of Chinese consumption of non-Albertan with respect to Chinese consumption of Albertan oil: MINUS ONE.

[Kuciwalker]

I'm glad you're giving up, because it's frustrating dealing with someone who always deals with markets in the theoretical with no appreciation for the real world. To you it's a simple issue of supply and demand. The concept of logistics seems foreign to you.

Logistics can only have any effect at all in the timespan it takes to switch where you are buying or selling, which WILL BE PRETTY MUCH THE SAME FOR ALBERTA AND THE US.

Especially since WE ALREADY HAVE THE INFRASTRUCTURE TO IMPORT OIL FROM TANKERS.

[Asher]

We're not as exposed because we're self-sustained and a net exporter of energy.

We can always sell oil elsewhere (for more money). You will have to pay a lot more to get oil from elsewhere, which is very damaging to your economy.

Net exporters are just as exposed to price as net importers.

Outside of the very short run, it does not cost us appreciably more to get more oil from elsewhere instead of Alberta. ONE HUNDRED PERCENT of the effect you've been talking about has to do with short-run logistical issues.

No, I'm talking about long-run production.

There's two problems:

Short-run logistics: How do you get it there?
Long-run supply: Outside of Canada, the world's oil production rate is appreciably falling. China and India have rapidly increasing oil demands. If you're not getting oil from Canada, you're going to be fighting over a diminishing supply of oil while being geographically farther from most of the production and competing with emerging economic powerhouses in China and India. That would not end well.

[Asher]

Logistics can only have any effect at all in the timespan it takes to switch where you are buying or selling, which WILL BE PRETTY MUCH THE SAME FOR ALBERTA AND THE US.

Especially since WE ALREADY HAVE THE INFRASTRUCTURE TO IMPORT OIL FROM TANKERS.

And how many tankers are there? How long do they take to build? How large are the storage tanks in the ports? How much refinery resources do you have? What are the capacities for the pipelines from those ports into the rest of the nation (your current infrastructure depends on a huge portion of your oil coming direct from Canada via pipelines. If you are replacing that with from tankers, you need an enormous amount of tankers with far higher pipeline capacity from the ports).

The situation is far more complex than you seem to comprehend.

Here's one pro tip: China is dominating the tanker market right now with their thirst for oil. There's a shortage as is.

[Kuciwalker]

Long-run supply: Outside of Canada, the world's oil production rate is appreciably falling. China and India have rapidly increasing oil demands. If you're not getting oil from Canada, you're going to be fighting over a diminishing supply of oil while being geographically farther from most of the production and competing with emerging economic powerhouses in China and India. That would not end well.

In the long run the falling production outside of Canada has PRECISELY THE SAME EFFECT ON THE UNITED STATES regardless of where we buy our oil.

[Asher]

In the long run the falling production outside of Canada has PRECISELY THE SAME EFFECT ON THE UNITED STATES regardless of where we buy our oil.

I'm not sure you understand how embargos work, Kuci. Yes, oil prices go up worldwide as the worldwide production falls. However, if you are not able to buy oil from a huge portion of the market, you will be paying a premium to buy from the rest of the market which understands your situation.

Not to mention the practical: If China keeps demanding more oil, why would Saudi Arabia ship oil farther on tankers to the US when they can ship it much closer to India/China? The US would need to give them good reason to do so, no?

[giblets]

Not to mention the practical: If China keeps demanding more oil, why would Saudi Arabia ship oil farther on tankers to the US when they can ship it much closer to India/China? The US would need to give them good reason to do so, no?

You mean, enough to compensate for the cost of the tanker traveling a greater distance? Yes, if Canada refused to sell oil to its neighbor the world would waste more resources shipping oil from place to place. OMG!

[Jaguar]

Asher, you have absolutely no idea what you're talking about. This is maybe the most ridiculous thing you have ever done, including, but not limited to, the time that you cheated in Fantasy Hockey.

[Asher]

You mean, enough to compensate for the cost of the tanker traveling a greater distance? Yes, if Canada refused to sell oil to its neighbor the world would waste more resources shipping oil from place to place. OMG!

Indeed. And oil producers profit.

[giblets]

Indeed. And oil producers profit.

How does increasing the cost of the transaction make the supplier better off?

[Asher]

Asher, you have absolutely no idea what you're talking about. This is maybe the most ridiculous thing you have ever done, including, but not limited to, the time that you cheated in Fantasy Hockey.

I never cheated in fantasy hockey.

And I most certainly do know what I'm talking about. All of this talk about oil being fungible and the oil market being a free market is hilarious. It's pure economic theory.

The oil market is not free. Oil is not realistically fungible. The world is at the mercy of Big Oil to a degree that companies like Exxon can make $11B in profit in just 3 months and no one does anything about it. All of the free market theory in the world doesn't matter when big oil has you by the balls and a cartel controls the market.

[Asher]

How does increasing the cost of the transaction make the supplier better off?

Most do not own their own tanker fleets, post-Valdez. You sell it to whoever wants to come pick it up.

IIRC Chevron is the last big oil company to actually transport oil on tankers it owns.

Alberta makes money in royalties based off of the percentage of the price. If the prices goes up due to transportation cost, so does our cut.

[Asher]

Alberta profits every time the US attacks some random middle eastern country, for christ sakes.

Any time people get scared, oil prices go up, and so do provincial coffers.