Lion of the Blogosphere

Low oil prices bad for America

I agree. High oil prices create good-paying blue-collar jobs in the labor-intensive oil-drilling sector. Low oil prices could snowball into a recession.

Although it’s ironic that the NY Times is sticking up for these types of workers. Back when Obama was President, the NY Times had loads of articles saying how bad these jobs were, and that the workers would be better off without them. This demonstrates how the NY Times will do a complete about-face on any issue if they think it makes Trump look bad.

Written by Lion of the Blogosphere

November 29, 2018 at 11:17 AM

Posted in Economics

20 Responses

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  1. Oil prices were low for much of the 80’s and 90’s yet the US economy boomed

    grey enlightenment

    November 29, 2018 at 11:31 AM

    • Yeah I think on balance lower oil prices are good. They’re better for consumers and for manufacturing.

      The 2008 recession was precipitated by a spike in oil prices.

      McFly

      November 29, 2018 at 12:06 PM

    • Low oil prices also mean lower prices at the pump, which benefits the blue collar workers LotB mentions, because they generally drive a lot. Not to mention lower prices on all the stuff at Walmart, Home Depot, etc, since gas is priced into all those goods.

      Whether low oil prices are bad for the economy is difficult to answer. It could lead to more job opportunities in areas outside drilling and refineries: areas like construction, shipping, farming, hospitality, or commercial banking.

      Lowe

      November 29, 2018 at 12:06 PM

    • That’s because America was a net petroleum importer during the 80’s and 90’s. Therefore, low oil prices lowered our production costs. Now that America is a petroleum producer, lower oil prices erodes America’s competitive advantage by lowering the production costs for other countries. In addition to putting the squeeze on America’s petroleum industry.

      destructure

      November 29, 2018 at 12:15 PM

      • Oil is an input. You want high value added manufacturing that takes inputs like oil and creates high tech products. You don’t ‘want to be a resource based economy which doesn’t employ many people overall and doesn’t create a robust general economy.

        Tom

        November 29, 2018 at 2:41 PM

      • America is still massively a net oil importer, by something like 6 million barrels a day. We export some light crude now because that’s all the tracking plays produce but it has to be blended with heavier grades to be easily refined. We had been mostly using Venezuelan crude to blend.

        bobbybobbob

        November 29, 2018 at 7:56 PM

    • no to mention the 50’s and 60’s.

      amused observer

      November 29, 2018 at 1:11 PM

    • Wow. Things sure didn’t boom in Canada in the 80’s. Interest rates went sky high. People in Alberta were walking away from homes they could no longer afford the payments on (after their interest rate jumped to 18% or some damned thing). Some people shot themselves after getting foreclosed on. The oil industry crashed badly,

      There were bumper stickers saying: “Dear God, please send another oil boom. I promise not to piss it all away this time.”

      Things are not looking good in Alberta at the moment. The damned environmentalists and whiny Indians are preventing pipelines from being built, so they can’t get their oil to market. And the country is being run by a moron.

      Rosenmop

      November 29, 2018 at 2:45 PM

  2. I disagree. It’s basically a tax cut. The job market is good. Construction companies can’t find workers who would be similar to the ones you described. And I wouldn’t call oil prices low. Early 1999 oil was $9 a barrel.

    99.9% Fine

    November 29, 2018 at 12:04 PM

  3. Sorry, but you’re wrong. Bad maybe for oil workers, but much better for the rest of us, and there are a lot more “rest of us” then there are of them. If I save $5 a week filling up my tank, that’s $250 a year to spend on other stuff, or to save and create capital.

    sestamibi

    November 29, 2018 at 12:12 PM

  4. You know the NYT are just being as*hats about this. The prices will cycle up and down but will stay within more reasonable limits because now the US is THE marginal producer. Every time prices go up the US can increase fracking and drilling. 40 years ago, when the Arabs dominated all production without Russia or the US they could choose to slow the falls or keep the rises. That world is long gone and it’s good that the US controls it. Once China learns to frack even a modest amount (say 10-15 percent of their gas use) it’s goodbye cartels. What matters is not total production for prices as availability of marginal producers when prices rise or fall. Oil and gas become like any other commodity. Mostly low but lots of interruptions with high prices due to random shocks or political surprises.

    ivan1917

    November 29, 2018 at 12:55 PM

    • The fracking story is a total scam. These operations are almost all huge ponzi schemes piling on massive amounts of junk debt. They cannot make money even with $80 oil. It’s all going to come to tears in the next business cycle downturn. There are a tiny number of Permian fracking operations that actually make sense.

      Even if it weren’t the case that these operations are burning massive amounts of cash and due to crash, the fact is there is way less viable oil in these plays than people pretend. We are talking another ten years or so before it’s all sucked dry. So these “America is now oil independent!” types need to be a little more forward thinking.

      bobbybobbob

      November 29, 2018 at 2:33 PM

  5. More Americans consume energy than produce it, it seems obvious that low energy prices are good for the economy.

    Gozo

    November 29, 2018 at 12:59 PM

  6. It’s ludicrous to claim low oil prices are bad for the country. They might be bad for Elon Musk, but driving, personal freedom, are what America IS. The whole purpose of the country is to allow the greatest number of people to enjoy the most flexible possible lifestyle. That means me driving from Cal to Texas just for BBQ, or Gothamette to Branson to see Wynonna, or some patriot going from New Hampshire to Nashville to shoot Tim Wise – whatever. Gasoline over $1.50/ gal. is a crime.

    Marty

    November 29, 2018 at 1:29 PM

    • This mentality has never made any sense to me. 90 years ago you could do all those things by buying cheap train tickets with cash. You could get almost everywhere on passenger rail and street cars. You’re not more free having to own and maintain a $20K car, and pay a ton of taxes to maintain a very expensive road network.

      bobbybobbob

      November 29, 2018 at 2:28 PM

  7. They’re worse for Russia, and they dramatically reduce the risk of war.

    J1

    November 29, 2018 at 7:10 PM

  8. The shale/fracking boom is almost over so those jobs won’t be there for very long regardless.

    https://oilprice.com/Energy/Crude-Oil/The-Shale-Boom-Might-Not-Last-Long.html

    Fact Checker

    November 30, 2018 at 1:43 AM


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