Reducing the cost of oil

I read the following article by Dr. Robert Zubrin and tried to be objective however, the reasoning and conclusions are nothing but political spin and misleading to the US consumer.

He states in part:

If we assume the conservative five-to-one elasticity ratio, it would take the addition of the equivalent of 3.3 billion barrels of oil per year (10 percent of the world’s supply) to decrease oil prices by 50 percent (which would incidentally bankrupt the Iranian government, thereby stopping its nuclear-bomb program dead in its tracks).


Read the article yourself and draw your own conclusions http://www.openfuelstandard.org/

He argues for the building of The Keystone Pipeline then tries to tell the reader that by implementing his policies the price per barrel could be reduced to 50 dollars per barrel. Now how does that work? Alberta is already telling British Columbia that there is NOT sufficient revenues from the Northern Gateway project to share. The sludge extracted from the sands is heavy oil ( considered a bitumen - ergo the moniker TAR SANDS) and expensive to separate.... at 50 dollars per barrel it would not be economically viable to develop, the sands would die, and the pipeline would run dry.

America extracts oil, refines it and consumes it domestically all at World Prices yet the Arab States and Venezuela sell it within their borders cheap and outside their borders at World prices.

It comes down to the old concept that if you deceive the people often enough and repeat the lies they become truths. He even tries to garner public sympathy for his fantasies by claiming that lower oil prices would bankrupt Iran's nuclear goals. The old fear mongering tactic.

Oil prices are set by two things OPEC and speculators, Canada finds it economically viable to sell the oil at World prices to the USA why would they sell it for less? The addition of ethanol did not lower the price of gas at the pump ...... but it did raise the price of corn on the table.

The simplest thing such as a rumour that Obama is considering the release of strategic oil reserves can cause oil speculators to sell and lower the per barrel price....

http://ca.news.yahoo.com/brent-slips-more-1-u-eyes-oil-stocks-034309159--finance.html

The per barrel price of crude hit a high of 23.56 in 1991 and The Sands developers were telling the World that the barrel price had to reach 50 dollars for development to be profitable. That was 21 years ago and cost of extraction has escalated I would assume.

Canada's proven oil reserves are second only to Saudi Arabia's. At the end of 2006, Canada's remaining established reserves amounted to 179 billion barrels, of which more than 95 per cent are in the form of crude bitumen in oil sands.

Crude oil production has been increasing fairly steadily during the last two decades. While conventional resources continued to account for more than half of crude oil production, most of the production growth in recent years has come from oil sands.

Canada is a net exporter of crude oil. Domestic oil is exported from the western provinces while the eastern provinces import international oil. In 2006, exports reached $38 billion and imports amounted to $23 billion.

Canada has an extensive network of pipelines carrying crude oil to domestic refineries. The three main refining centers in Canada are in Edmonton (Alberta), Sarnia (Ontario) and Montreal (Quebec).

Oil is the most important energy source used in Canada, ahead of natural gas and electricity. Over two-thirds of the refined petroleum products sold in Canada are used for transportation: gasoline, low-sulphur diesel and aviation fuel.

After a period of low and relatively stable prices during the 1990s, crude oil prices have risen in recent years in international markets. This has resulted in increased revenues for Canadian producers and higher prices for Canadian consumers.

In coming years, the Canadian oil sector will be dominated by the pace of oil sands development. New pipeline and refining capacity will also be required to accommodate supply and market requirements.

http://www.nrcan.gc.ca/energy/sources/petroleum-crude-prices/1225

Both the Alberta and Federal Conservative party have worked hard to change environmental groups and the voters view of the sands by altering their name and referring to them as Oil Sands when in fact the material extracted is considered bitumen. To most people bitumen is the sludge or waste product produced in the refining process and used for roofing, driveways and roads.