Black GOLD
Yes, as oil prices are now past $120 a barrel, market watchers are now looking foward to $200 barrel oil, it’s causes and effects.
Maybe it’s because of all the Bush Derangement Syndrome rantings that have left my eyes in a near-permanent rolling motion, but I have to wonder:
If the Iraq War was all about oil [can I get a “NO BLOOD FOR OIL”?], then what will have the more devastating effect on oil prices next year: staying in Iraq and stabilizing the place, or retreating and letting it collapse?
Lord help me, but…I don’t see “Iraq” anywhere in this article. Could it be [COULD IT BE?!] that the war in Iraq isn’t about oil? Could Operation Iraqi Freedom be about Freedom? I know, it’s crazy talk, but the coffee’s strong this morning, so I wonder, while the candidates are whining and pandering and bribing their way to nomination (abomination?), what idea addresses the cost of oil in 2009 best:
- a gas tax holiday
- a windfall profits tax on any company that makes too much money (oil companies to start with, computers to follow?)
- staying in Iraq to stabilize it
- retreating from Iraq and gambling on its collapse (if it does collapse post withdrawal, there is no doubt at all that a subsequent third invasion would be infinitely more costly in blood, treasure, and duration)
- Or perhaps something else?
What’s the best thing the next President can do to keep oil from reaching $200 barrel next year, and what’s the best course in Iraq given the prospect of $200barrel oil?
Additionally, what should the next President do in terms of Iran given the prospect of $200 barrel oil next year?
Author of “Reparations and America’s 2nd Civil War
Reparations and America’s 2nd Civil War: Malensek, Scott: 9798864028674: Amazon.com: Books
What a straw man false dilemma looks like: either “…staying in Iraq and stabilizing the place, or retreating and letting it collapse”?
On the “either”:
Certainly, a majority of the American public and a majority of foreign policy wonks have seriously questioned even if the Administrations’ present policies are capable of stabilizing Iraq.
On the “Or”:
Secondly, again, thoughtful minds have argued there is no certainty Iraq will collapse given a responsible withdrawal, with proper attention to supportive structures. Further, realistically speaking, ‘collapse’ is a relative term and sound arguments can be made that Iraq already can be described in a state of collapse.
Asserting questionable premises for both events as certainties it’s hoped here will obscure the reality that this position is a minority position regarding Iraq: both publicly and academically.
Why not $300 per barrel? Nobody in Washington is talking about pushing back against OPEC or the supply manipulators.
well let’s take a look at what might send the price to 200 dollars
Military action against Iran When a couple of speed boats can cause the price to jump 3 dollars (on 2 different occasions) what would war drive the price up to ? How much would Iran benefit from 200 dollar oil ? How much would 7 dollar gas and 8 dollar diesel hurt our economy ? What would the reaction be of China to whom we owe a trillion dollars, remember the war in Iraq has been paid for by money borrowed, not funded by taxes.
And BTW: Why not $400 per barrel? It doesn’t bother people like Doug who prefer theorizing and hypothesizing about Bush’s policies for GWOT and the Iraqi War. His “analysis” of your post is pure unadulterated hog slop.
Doug demonstrates an interesting and immedite duplicity. On the one hand his first comments suggest that stabilization of Iraq isn’t possible, and then in the very next sentence he claims that people believe Iraq can be stable via a withdrawal. Fascinating.
Just drill and Refine our own oil. Those who oppose this would rather this country collapse than become energy self sufficient. Traitorous, or is there another agenda at work?
Well Jainphx we do drill and refine our own oil but of course even after that we still must pay the world market price, unless of course you are talking about nationalizing the oil industry like say Mexico where gas and diesel currently sell for 2 dollars per gallon or Venezuala where it is about 15 cents per gallon. If ANWAR is drilled we will also pay the current world price for that oil also.
ANWAR is just one of the places, and it’s a small one at that compared to the coastal regions. I’ve always found that the bigger the problem, the more causes there are and the more solutions that are needed. Only simpletons see a single problem and a single solution. To that end, conservation, alternative energy sources, pressure on OPEC, etc are but some of the solutions. More drilling, more resource utilization, and more refining are also solutions. Rather than advocate a few, I think we should do them all. Oil’s often portrayed as some sort of corporate evil, but it’s more than that-it’s life. No oil=no food, no money, no clothing, etc., and all in just a very very short period of time. It’s a lot more than just a corporate profit.
Perhaps it’s time someone asked the Presidential contenders what the maximum affordable price of oil should be. In other words, above what price should the US reconsider prohibitions against developing additional domestic sources of crude oil? OTOH, is the oil market so distorted that we should consider federal subsidies on crude on a par with those of our OPEC, Latin American, and Asian competitors? It’s becoming increasingly clear that domestic production is no longer large enough for America or non-state owned oil companies to have any pricing power in the oil marketplace. If that’s true, at what price does the American economy break?
The price of oil shouldn’t be a big issue for the government unless government policy is distorting the market. It’s true that $200-a-barrel oil sucks for consumers, but if that’s the price that has to be paid to encourage development of more energy resources (including more oil) then so be it. Personally I doubt the price will go that high in the near future.
then what will have the more devastating effect on oil prices next year: staying in Iraq and stabilizing the place, or retreating and letting it collapse?
Leaving Iraq might well cause an increase in the price of oil, depending on how it played out (but keep in mind that there are plenty of people in Iraq who would like to keep making money by keeping the oil flowing). But why are we in the business of stabilizing world oil prices through large military expenditures? Sounds like Japan, China and the EU (heck, everybody) are getting a free ride on the backs of US soldiers and the US taxpayer. Because on our end the math doesn’t work out. Even if all Iraqi oil went offline, and using standard models of price elasticity, the cost to the US would be less than what we spend on Iraq.
If we develop our own oil resources (coastal and oil shale, for example), nothing says we would be required to “purchase” that oil at the prevailing per barrel price. The additional supply would require the market to adjust the per barrel cost downward.
A side note for your consideration: Shell Oil is thinking about re-entering the oil shale development project. Of the estimated 1 trillion barrels of oil locked in shale deposits, current technology and processes estimates an 80% recovery, or 800 billion barrels of oil. This is more than the proven reserves of Saudi Arabia at the time oil was discovered there. As previously stated in a previous thread, shale mining is hard rock mining – there is no open pit or strip mining to recover the shale. The arsenic presence in the shale deposits have been resolved sufficiently where it does not pose a problem in the refining process or the use of refined products from shale.
Keep track of oil futures here all the way till 2016:
http://www2.barchart.com/dfutpage.asp?sym=CLM8
Most of the oil in the U.S. comes from Canada. The U.S. gets little oil from OPEC. Oil use is growing. Even beaten down Iraq is posting historical highs for energy uses each month. As more countries get wealthy they will consume lots of oil. U.S. historically has been drunk on oil for a long long time and now others have been able to join the party. Ethanol right now has just increased food prices, but stopping ethanol will probably increase the cost of oil by 20% or more. Changing to switchgrass could put 9 times the amount of ethanol into the system, but this would just delay oil prices and do nothing for food prices.
How much possible energy demand is out there. Although this was made in 1990, the ratio hasn’t changed that much, but it’s changing at a faster and faster pace.
http://www.miniature-earth.com/me_english.htm
It may take 50 years to build an alternative infrastructure and of course this new infrastructure would have to be maintained by people that would have to be trained. Some of that would probably have to paid by U.S. taxpayers. Why? Because let’s say a country wants to build an oil powered generator because for them it’s the cheapest plant to build. The U.S. may have to step in and pay the difference for a more expensive generator. Just imagine the U.S. paying Iraq billions of dollars to build solar farms so we can get cheaper oil. Even more interesting, let’s say the U.S. would pay Iran billions of dollars for solar farms so they wouldn’t build a nuclear plant (they have energy needs too) or more oil powered generators. The same thing may have to happen with North Korea as the oil for no nukes program is getting very expensive. Another sore spot is more nuclear plats maybe made even for countries that may cause problems down the road. Imagine if Iran had nuclear plants when the Shaw was overthrown. Such senerios could happen in the future. That senerio might play out in Pakistan.
So to keep energy prices low, the U.S. should expand it’s own alternative energy sources along with helping other countries even if the U.S. taxpayer has to foot the bill now, so they don’t have to foot the bill later. By the time this infrastructure is built, countries could be running dry of oil and oil would easily be more costly.
Maybe some economics whiz could say how much the price of oil is caused by hedge funds(not just US hedge funds, mind you) playing in the commodity markets.
I do think that any oil produced from US territory should be priced for Americans. BTW, Shell Oil is a Dutch company, Dutch Royal Shell.
Tom
Economics 101. The more plentiful a product or commodity the cheaper it is, Which means that the opposite would be more precious. Ergo the more oil you have the cheaper it will be.
why don’t we drill our own oil? i know it may sound ignorant, but we have the deposits sitting under us. is it the enviromentalists? this tends to get confusing, because if we only get a small amount of oil from the middle east and the opec nations does that mean there is price fixing or a monopoly goin on?
“Maybe some economics whiz could say how much the price of oil is caused by hedge funds(not just US hedge funds, mind you) playing in the commodity markets.”
You mean like in this article:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/08/bcnfood108.xml
Would it be this whiz kid:
“Jim Newsome, the head of the New York Mercantile Exchange, said trading curbs on hedge funds woold achieve nothing. “All you’re going to do is potentially cripple the US exchanges and move that flow of trading to non-US regulated markets,” he told the Wall Street Journal.”
or this one:
“Martin Schulz, MEP, the leader of the Socialist group in the European Parliament, said speculators had crossed a moral line by trying to corner positions in the staple foods at a time when 100m people in the poorest countires are at risk of famine.
“Casino capitalism has taken a seat at the table of the poor. This is immorality carried to the extreme. We need international controls on financial markets,” he said, echoing a feeling share widely by Europe’s political class.”
Harry Reid (D) has the answer:
“Big oil is making money hand over fist: We will hold them accountable for their unconscionable price-gouging and force them to invest in renewable energy,” said Senator Harry Reid, the Senate Majority Leader.”
In my opinion, there is not a lot that an American president can do to stop the market forces that are driving up the price of oil. The US dollar is falling and the world’s oil producers are going to get more (in dollar terms) for their oil to make up the difference. As long as the US is flooding the world in dollars to finance its federal budge deficit, this will continue.
In that case, a “gas tax holiday” only makes it worse since the “make up money” will be filled by more borrowing (Hillary Clinton’s proposal to make it up by taxing oil company profits is going nowhere, and John McCain would just put it on the credit card).
Regarding oil and Iraq, I would at least stop subsidizing reconstruction projects that the Iraqis can afford now themselves.
Remember “Iraqi oil will pay for the occupation”. Perhaps it is time for that promise to be kept.