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Tractor Talk Discussion Board

Re: O.T. Made in USA


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Posted by MarkB_MI on September 23, 2010 at 18:58:37 from (32.178.12.247):

In Reply to: Re: O.T. Made in USA posted by LAA on September 23, 2010 at 10:09:32:

LAA,

You argument doesn't hold much water. Here's why:

1. China didn't develop its huge trade surplus through cheap energy. They have to buy their oil on the international market, just like everyone else. And they have to pay for it with dollars. China is able to maintain the trade imbalance with a combination of cheap labor, loose environmental regulation and a currency that is kept artificially devalued.

2. Domestic oil isn't cheaper than imported oil. That's why drill rigs are idle all over the country: no oil company will drill for oil that costs 100 bucks a barrel to produce when they can buy light Saudi crude for 70 bucks a barrel. All the cheap oil was pumped a long time ago.

3. Even if we do become energy-independent, that just leaves that much more oil on the global market, which the Chinese can get even cheaper than today.

The days of cheap energy are long gone, which is not necessarily a bad thing. If we want to become globally competitive, we need to become more efficient and do more with less.


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