Mitt Romney Would Pay 0.82 Percent in Taxes Under Paul Ryan's Plan

[Asher]

I never claimed knowledge of oil logistics. I simply believe they are probably a less difficult proposition than winning World War II was.

If one were making claims to difficulty, you'd probably have a compelling argument.

[Asher]

Am I being punked?

What's absurd, Asher, is that under your hypothetical, which as I recall is "Alberta stops selling oil to the US and sells to China", there would be the exact same logistical problems on Alberta as there are to the US. Yet you claim that Alberta would not be affected if they did this.

Kuci:

Is Canada also losing the benefit from selling that oil for the same time period?

Me:

Quite obviously, yes it is.

Keep digging.

[Hauldren Collider]

Well in that case, what is your point? How does this in any way disprove the fact that oil is fungible? If you take a ton of product off the market OF COURSE supplies are going to be affected.

[Asher]

Well in that case, what is your point? How does this in any way disprove the fact that oil is fungible? If you take a ton of product off the market OF COURSE supplies are going to be affected.

So now that we agree what I have been saying is patently obvious and abundantly clear, do you feel silly for arguing otherwise and continually bringing it up in unrelated threads?

[Hauldren Collider]

So now that we agree what I have been saying is patently obvious and abundantly clear, do you feel silly for arguing otherwise and continually bringing it up in unrelated threads?

You're the one constantly moving goalposts here. I recall you at one point declaring that Alberta could **** the entire USA by refusing to sell us oil without any consequences. Now you've retreated to "if you arbitrarily stop producing oil, THE PRICE GOES UP." Like I needed your deep experience in the oil industry to figure that bit of wisdom out.

Do you still insist oil is not fungible?

[Asher]

And my point was oil is not fungible in the short term. You cannot take a massive supply of oil away and replace it with something else in the short term.

It's a rather obvious claim.

[Asher]

You're the one constantly moving goalposts here. I recall you at one point declaring that Alberta could **** the entire USA by refusing to sell us oil without any consequences. Now you've retreated to "if you arbitrarily stop producing oil, THE PRICE GOES UP." Like I needed your deep experience in the oil industry to figure that bit of wisdom out.

Do ou still insist oil is not fungible?

Oil is most certainly not fungible in the short term.

I'm not moving any goal posts. You are displaying a remarkable inability to read posts and infer reasonable arguments from them.

[Hauldren Collider]

No, that doesn't mean oil isn't fungible in the short term, you've merely demonstrated that markets can be isolated over the short term. If I got rid of all the oil on earth, you couldn't replace it with oil from one of Jupiter's moons (let's pretend there is some there). That doesn't mean it isn't fungible.

Under your ridiculous examples, NOTHING is fungible in the short term. If Iowa stopped producing corn, you would argue corn isn't fungible in the short term.

[Asher]

No, that doesn't mean oil isn't fungible in the short term, you've merely demonstrated that markets can be isolated over the short term. If I got rid of all the oil on earth, you couldn't replace it with oil from one of Jupiter's moons (let's pretend there is some there). That doesn't mean it isn't fungible.

Let's break this down, as it's obviously confusing you.

What does fungible mean?
It means it can replace or be replaced by another identical item. Right?

Would Oil not need to be identical for this to be the case? There's huge varieties in types of oil with specific infrastructure in place to refine specific types. That alone makes it questionable in terms of being fungible. It's too broad a term. Bitumen from Alberta is nothing like light crude from Saudi Arabia.

On a higher level, it means it can be replaced as a form of energy with another identical item. If Canada cut off its oil supply to the US, there's not enough ethanol/fuel cells/hydrogen/natural gas/etc available to make up that energy shortfall for years. Oil, as an energy source, is not fungible in the short term either in this case.

This isn't a new concept. Ivory tower economists who don't know anything about oil make sweeping claims about it in generalities without an eye to the real world. Real world economics dictates otherwise.

For example:

http://www.theoildrum.com/node/7216

http://www.tandfonline.com/doi/abs/10.1080/10803920.2012.686726?journalCode=uafp20

http://www.ianwelsh.net/clueless-about-oil-it-isnt-going-to-stay-fungible/

Edit: The abstract for one of those Journal-published papers should sound familiar....

In studying petroleum issues, some analysts tend to overestimate the role of markets in promoting U.S. energy security. In particular, these analysts assume that crude oil moves internationally as if it were traded in a “free market.” They often repeat phrases such as “oil always moves to the highest bidder,” or “oil is fungible and where it comes from does not matter.” But global petroleum markets are not “free.” They are severely constrained by many factors, including logistical limitations, increasingly non-interchangeable types of crude oil, and limitations on where companies can produce oil and to whom they can sell it. Most important, the markets for petroleum are distorted by the practices of Saudi Arabia and the Organization for Petroleum Exporting Countries (OPEC). A misunderstanding of the above factors can lead to, among other misconceptions, an underestimation of the role of Canada in promoting U.S. energy security and an exaggeration of the ability of markets to protect consumer or U.S. national interests, both before and after supply disruptions. A more realistic understanding would recognize the imperfect hold markets have on global crude oil allocation and would stop confusing the theory of “free markets” with the reality of international politics and oligopoly.

[Lorizael]

In the end, the only truly fungible things are bosons.

[Asher]

Under your ridiculous examples, NOTHING is fungible in the short term. If Iowa stopped producing corn, you would argue corn isn't fungible in the short term.

No, because corn is corn. Oil is an umbrella term for many incompatible types, each with their own (very expensive) infrastructure demands.

[Kidlicious]

No, that doesn't mean oil isn't fungible in the short term, you've merely demonstrated that markets can be isolated over the short term.

Because economists and others say that oil is fungible since increasing the supply is a particular place, like the US, doesn't change the price in that place. Asher is using the term correctly.

[Ogie Oglethorpe]

No, because corn is corn.

Fungus/mold is a big deal on corn. Typically if the corn moisture is too high you apply acidic fungicides. Obviously you don't do that to a barrel of crude. Thus crude is not fungible.

Quod Erat Demonstrandum

[Hauldren Collider]

No, because corn is corn. Oil is an umbrella term for many incompatible types, each with their own (very expensive) infrastructure demands.

Because there definitely aren't different kinds of corn.

Asher would have us believe that nothing other than actual currency is fungible, because it has to be ALL EXACTLY THE SAME.

[Asher]

Because there definitely aren't different kinds of corn.

You (hopefully) understand the difference, right? Yes, there are different "kinds" of corn but not in any meaningful way with regards to infrastructure.

Asher would have us believe that nothing other than actual currency is fungible, because it has to be ALL EXACTLY THE SAME.

I don't think you truly appreciate the difference in crude types. Again, this is because you're completely ignorant. It's not like the oil has a different colour. They require completely different processes and technologies to refine. They're effectively different products completely.

Read some of the links above for a crash course. The SO is a petroleum engineer working in the field so I've got some idea on the complexities involved here.