It doesn’t matter whose supply dissappears, that supply comes out of the world market. Thus, the world price changes. Everyone who is am importer pays approximately the same price if they don’t have some sort of contract agreed to in advance. Those contracts have ways of working in favor of the supplier though, so if they get too out of whack, they end up getting renegotiated by negotiators or generals.

If I misunderstood, then here is why: I don’t see a difference between “NAFTA only oil rule” and “unable to get oil from other sources for whatever reason”.

I think it is safe to assume that Canada and Mexico would continue to sell us oil at the prevailing world price so long as they were producing it.

In a normal, competitive, market the producer will sell to the consumer offering the higher price. If prices are, “for whatever reason” higher in the USA, then that’s the price the USA will be be paying.

Would the price of oil in the USA would remain the same as the rest of the world if ~5 Mbpd of its supply disappeared? Until demand came down to meet the supply, I don’t think so.

You miss understood my whole point. I was not suggesting a NAFTA oil only rule. I was pointing out that if we were unable to get oil from other sources for whatever reason, we could actually run our country just fine on NAFTA oil.

All your scenarios are still backwards.

I think it is safe to assume that Canada and Mexico would continue to sell us oil at the prevailing world price so long as they were producing it.

In order to keep Canada and Mexico from selling their oil elsewhere — the USA would need every last drop of it — the US would have to offer more money to them.

How much more? Looking at various numbers (with various dates), the US currently imports ~12 Mbpd, Canada and Mexico (combined) produce about ~7 Mbpd. So when a “NAFTA oil only” rule is imposed, the US would be left with a ~5 Mbpd supply crunch.

To get this kind of drop on the current world market, with the US consuming 1/4 of it, global oil production would have to drop by 20 Mbpd, or a quarter.

Can you imagine it?

Now Canada and Mexico, thinking the USA had gone completely batpooh nuts, would be happy to oblige — actually they would insist! Who wouldn’t? Captive market!

Naturally, neither of these countries would be laboring under stupid “NAFTA oil only” rules, so they would simply buy their own domestic needs elsewhere, for a lot less.

How much less? The 5Mbpd drop in supply to the US would appear to the outside world as a sudden glut of oil of the same magnitude.

What would be the price of oil on Monday if Saudi Arabia suddenly announced it could increase production, empty tankers are waiting, by 5 million barrels per day?

Anyways, an interesting experiment in economic insanity; I doubt it could be sustained for any period of time. Certainly not long enough for the inside-US/outside-US price of oil to equilibrate. Airlines would take their planes and flee, probably to Canada and Mexico. Arbitrageurs would start smuggling inexpensive non-NAFTA oil into the US via Mexico and Canada, the nasty dependency reasserting itself. Citizens with AR-50’s would be actively hunting the politicians and regulators which created the situation. A kind of Prohibition, but raised to the N’th power. The usual unique American drama.

Perhaps you need to think about how the cutoff might occur, and then think about the oil market.

Well, remember that this is your idea, so I’m not really inclined to conjure various ways “how the cutoff might occur”. I’m not even sure if how it occurs would be especially important.

Mind you, if the USA could cut its oil imports comfortably by 5 Mbpd, that would go a huge way to its oil independence. I think efficiency and alternative sources would be the easiest, fastest and safest route. Future-proof one too.

sorry, but your scenario is just wrong.

Why would prices in Canada not rise along with those of the US?

Why would prices around the world suddenly drop?

Perhaps you need to think about how the cutoff might occur, and then think about the oil market.

Current US imports are about 2/3rd of consumption. non-NAFTA (presumably, everything except Canada and Mexico) is about 2/3rd of that, or about 40% of consumption.

What would happen is an instant, and dramatic, price increase in the USA for oil … and a decrease everywhere else.

Would the average American be able to tolerate the fact he would be paying much more or gas, while everyone else pays less?

This kind of thing would breed arbitrageurs like cockroaches. Gas stations within 10-50km of the borders would be out of of business, since everyone would just drive into Canada for fuel.

More importantly, not even OPEC could sustain their supply-side 1973/1974 embargo in the end; the likelihood the USA could impose one on themselves is almost as laughable as the idea they can drill themselves into oil independence, or even significant price control.

Advice: work on some energy efficiency options first. NiMH batteried hybrids sound reasonable. Lithium-ion PHEV’s are another. Canada has lots of nickel, you already have plenty of lithium.

We already have a Canadian solution – oil.

If you cut off every non-NAFTA source, we would likely be just fine. It would hurt, but it wouldn’t be a show stopper.

Oh, that’s right. Chevron won’t let anybody build batteries like that…

That really came from the guy who works for the company working to outsource every aspect of their business to other countries. And wont the EV be coming from Nissan, you know from Japan. Are they goingot to a Tesla and just put the batteries and tiny motor in in Michigan and call them American made. Jim Press is seriously an idiot, I’m starting to wonder about Toyota for keeping him around for 30 years.

If we are not going to be dependant on foreign factories does that mean Ford and GM are going to stop bringing parts, engines, transmissions and whole cars from Mexico, South Africa, Koreo, Japan, Australia, Belgium and China! I’ll let Canada slide on that one.

http://www.youtube.com/watch?v=I0yedpD8YH8

Just sayin’…

C’mon faster_than… you don’t really expect them not to, do ya?

“We must not allow a mine shaft gap!”

Or… no one will care. Chevy touts itself as “America’s brand” yet it pimps the Aveo (South Korea) and Malibu (German), to name the most obvious. And Saturn begged us (sorta) to “Rethink American” with its West German All-stars. Does that matter? Does the public know (or care)?

The dependence on foreign components only highlights the question marks and what-if’s that seem to be built into the foundation of GM’s lineup.

2010 can’t come soon enough, now can it?

The more I hear it, the more ridiculous this “foreign battery dependence” stuff sounds.

The battery is bought. Right now, foreign, because current US Li sources are not economical to develop. But let’s say they will _never_ be economical.

The battery is then used and abused.

Then it is recycled. Why not? You’ve already bought the lithium (see above).

Over time, given a lithium core to energy storage, the USA will develop a titanic pile of the stuff. All yours, to do with as you see fit.

Only gotta buy it once.

Now try recycling the burned oil.

If only.

There’s no doubt that there’ll be some egg on GM’s face for increasing our dependence on foreign batteries

Nobody will notice unless they explicitly sell the car with a patriotic theme. If they do that, there will be considerable analysis and controversy.