If someone “opines,” it means the person is expressing his or her opinion.
Well, in my opinion, the word is a combination of “whine” and “opinion,” so it’s the opinion of a whiner.
Last week, I opined on the stumble bunnies that we here in Canada call our political leaders and how they are determined to keep their careers in place at the expense of the Canadian economy, a coalition of consumers, taxpayers, and… oh yeah, the voters.
This week I will switch my sights once again to our “friends” to the south (Ya, NAFTA) as their mid-term November election casts a shadow on the futures of their political song and dance teams. The debate, as to whether to lift the ban on the export of U.S. crude carries on, all of a sudden the political cronies are now chemical engineers just like Neil Young.
Proponents or polipros (my word) of lifting the ban “expertly” proclaim, to the uninformed and unwashed masses, that such a move would create jobs by ensuring that the current oil boom continues. It will also polish up the U.S. geopolitical image by lowering Brent crude and world crude prices with a flood of U.S. crude.
And the most important of all, lifting the export will (drum roll please) lower gasoline pump prices – this point is always left to the end of any of their orations and is always the keynote word in the debate.
Antagonists or poliants are mostly of the refining sector who do not produce crude. These are mainly in the Mid-West and currently use Canadian or Bakken crude, which is discounted off the WTI, then they price the now refined gasoline and diesel based on the Brent price, which is again higher than the WTI crude price.
A good way of defining how to print money. Lifting the ban they claim would increase domestic crude prices and, here it comes, gasoline pump prices.
The debate fades to black when the current administration says it will consider the options next year. That is, after the November mid-terms and when President Obama will be in lame duck mode. Good luck with a lame duck.
So I ask myself, if lifting the ban on exporting U.S. crude will lower Brent and gasoline prices, how come without exporting U.S. crude the Brent prices have plummeted as have the gasoline prices?
Here comes the answer…
The U.S. is the largest consumer of crude oil on the planet. With the shale oil boom, U.S. imports of crude from all but Canada have dropped off dramatically to the point that Brent crude suppliers are scrambling for other customers. This has driven down the price of Brent and the price of gasoline in North America without a drop of U.S. crude having to be exported.
If I were the referee in this entire debate, I would say don’t export crude because you don’t have to. Just import less and build more refineries on coastal waters, not inland. Crank them up to produce and export more diesel and gasoline. This will keep refineries running at full tilt thereby lowering the cost per gallon that will be passed on to the consumer.
It will keep the refiners happy, crude producers happy, and oh yeah, the consumer happy.
But that’s just my Grouchinion as I opine.
Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc.
Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada. All posts by Roger McKnight