29 Comments

• 1. Eric T  |  May 25th, 2008 at 7:13 am

  In the Short term, John McCain’s plan for a gas tax relief holiday is what the people need.

  A another good idea might be relief from 32% interest credit cards.

• 2. Tom Thumb  |  May 25th, 2008 at 9:37 am

  This appears to be another argument for nationalizing US oil: take the speculators out of it.

• 3. js  |  May 25th, 2008 at 10:38 am

  really, the gas tax is a real issue to the trucking industy…those are the guys that really deserve congress’ attention….because without them, million of americans would be starving….the cost of diesel fuel approaches $5 a gallon…that is what is called a national security threat, our economy is under attack…oil did not rise from $20-30 per barrel to 140 because its in short supply, it rose because of attacks on the US Dollar (which has been vulnerable since we left the gold standard)…its economic warfare and they are using Stock Exchanges in the US to accomplish it….

• 4. Sam Spade  |  May 25th, 2008 at 5:17 pm

  If the above three posts are indicative of the economic smarts of right wingers then it is no surprise that the US finds itself suffering from such serious macroeconomic difficulties after eight years of ‘conservative’ leadership.

• 5. neocon  |  May 25th, 2008 at 5:33 pm

  “If the above three posts are indicative of the economic smarts of right wingers…” - Sam

  If the above post is indicative of the reading and comprehension skills of left wingers, it is no surprise why we continue to have to explain things.

  (did you miss post #2? I mean there is only 3!)

• 6. phnx  |  May 25th, 2008 at 6:06 pm

  Tom T: Why stop at the oil industry?

  OBTW: Given the sterling track record of Amtrak and the Post Office, nationalizing our oil industry would be an economic disaster.

• 7. middlefinger  |  May 25th, 2008 at 6:08 pm

  Seriously Mark,

  How does it feel to just get EVERYTHING wrong?

  Now…pick up your toys and go inside.

• 8. Eric T  |  May 25th, 2008 at 7:08 pm

  Sam-

  Enlighten us with your take on oil prices.

  Who knows what the price will do, it could take off soaring again or drop like a rock, or not move much at all, but one thing is for sure. It costs way too much to drive back and forth to work. Obama and his party of tax hikers offer no plans or ideas for relief. They don’t like the McCain tax relief plan because they want to push prices up to the levels like they have in England or Norway $8-9 a gallon to cover their socialized health care, baby bonds and every other big dollar big government plan they can dream up ect..

• 9. Mark Noonan  |  May 25th, 2008 at 7:23 pm

  middlefinger,

  Even supposing I do have everything wrong, the crux of this article isn’t my writing, but someone else…unless you want to say I’m factually wrong about oil prices in 1980 and where they went to…or that I’m wrong about the commodities market might be in for an interesting time…

  How does it feel to have to come here and say dumb things, day after day, because you signed up at some lefty group to go bother conservative blogs?

• 10. Mark Noonan  |  May 25th, 2008 at 7:26 pm

  Eric,

  I’ll have to agree with you there - though we’re pretty far off topic bringing that up. I work in the financial industry and it seems to me that if you wanted to sabotage the financial industry, you couldn’t do a better job of messing up than the people in charge of it are doing…

  The real problem, of course, is the bigness of the banks…just as a massive government bureaucracy is bound to get it wrong, so will a massive multinational get it wrong. My employer is actually headquartered in a foreign country - kudos for the investment in the American economy, but how is someone in a foreign capitol really supposed to know what the particular financial needs are in southern Nevada?

• 11. Sam Spade  |  May 25th, 2008 at 9:55 pm

  Eric T et al,

  In your first post you claim that a gas tax holliday is what this country needs. What is that going to do towards encouraging us to take the hard steps necessary to reduce our dependence on oil imports or to cheapen the base cost of oil? Both of these factors are strangling this nation on a macroeconomic level.

  You say that you would like me to enlighten you about what is going to happen to the price of oil. Alright, I will. In the long term the price of oil will continue to rise. There will be occasional fallbacks to lower prices but the large scale factors influencing the price are as follows. I have ranked them roughly in what I consider to be their relative order of importance:

  • MASSIVELY expanding demand in China, India and South East Asia.

  • Oil supply is at or near peak supply (look up ‘peak oil’ to understand this). From here on the supply of easily extractable petroleum will decline slowly but steadily. Put that together with the first point and what do you come up with?

  • The next one is a little more complicated, try to pay attention. In the early years of his first term George Bush was confronted with a minor growth-cycle recession. He chose to buy his way out of this with the largest credit boom in US history (remember when interest rates were reduced all the way down to 1%?). Bush also chose to give the wealthiest members of American society the largest tax break in history at this time while simultaneously commencing two open-ended wars of occupation in the middle east. All of this added up to record-breaking trade and budget deficits. These deficits have been mainly financed by foreigners, most importantly east asian central banks. Because of all of this the financial markets of the world do not view the US dollar as a good bet and consequently the dollar has dropped by more than 50% of its value since Bush came to office. And guess what? Oil is a non-US originated commodity that trades in dollars, so when the buck declines by 50% the price of crude doubles. Too complicated for you? Go back and read it again.

  • Fourth reason - due to Bush/Cheney’s “ram them, damn them” foreign policy the oil markets consider that there is a significant danger of a highly destabilizing event occurring in the middle east at any moment. Obviously right now the main bogeyman is an attack on Iran, something which repeated leaks from the state department have indicated Bush would like to do before he leaves office. (Now I know the conservatives on this blog have their opinions about this and so far I have spared you mine, but let me ask you a question. Do you really think that Iran would ever launch a nuclear attack on Israel? Doing so would be nothing but certain suicide for the Iranian nation. They simply aren’t going to do that. However, if we launch a “pre-emptive” attack on Iran we will have CERTAINLY guaranteed the short to medium term economic annihilation of the United States).

  Now I would like to turn to some reason which DO NOT account for the high price of oil:

  • Speculators. Yes there are such things as speculators but the oil market is one which is too large to be gamed. If you’re the kind of person who thinks there are phantom oil tankers sitting ‘just outside’ the harbors of the world waiting for the price of crude to rise then you have watched one episode of the X-files too many. ‘Speculators’ are betting on the price of oil to rise because of all the reasons I listed above. I have made leveraged commodity investments in the past, it is a VERY high stakes game - a small movement in the price of the commodity in the wrong direction can wipe your position out in no time at all. These guys are putting their money on the line because they believe that the underlying data supports the notion that the price will continue to rise. People who rant and rave about ’speculators’ being behind all of this haven’t got the first clue of what their talking about.

  • Drilling for oil in the Gulf, ANWAR, etc. etc. Okay, for the last time, it’s virtually impossible with our current technology to get oil out of the Gulf of Mexico (most of it is 6 - 10 miles beneath the surface of the ocean). Even if we could get it out we have no real idea how much is down there and it would only be economically sensible to extract it (if we can at all) if the price of oil stays WELL ABOVE the current high levels. That’s called a Catch-22. When oil execs go before congress and talk about the price of oil being dependent on drilling restrictions they are just trying to find a way to hit back at the politicians who are attacking them for earning record breaking profits from a national emergency. In the case of ANWAR it’s estimated that if all of it came online tomorrow it would supply less than 5% of America’s petroleum needs and would impact the price of a barrel of crude on the open markets by something in the order of 50 cents at most. Big deal. See the first three points at the top of this post for the real problems.

  Okay, I guess this got a little long and I know it will just be filed under ‘ignore’ by most of the true-believers on this blog. But like Jack Nickolson said in One Flew Over the Cuckoo’s Nest - “I tried, didn’t I? God-damn it. At least I did that.”

• 12. phnx  |  May 25th, 2008 at 11:04 pm

  sam Spade,

  There are a number of holes in your theory. I will just point to one. Massively increasing demand of China, India and SE Asia is based on increasing demand for the goods they produce. Just like the housing bubble, the oil bubble will burst when the price of oil adversely impacts the US, the EU, and Japan, the major consuming markets, in a serious way.

  A US recession, or worse yet depression, will cause a ripple effect throughout the world which will dramatically lower demand (depending upon the severity of the economic downturn). as demand reduces the speculators. which you say do not exist will take a bath, as oil prices tumble.

  BTW I noticed that you didn’t mention ANWR, and have you taken a look at a Oceanographic map of the Gulf? There are plenty of promising grounds well within the limits of present technology. Hell, the Chinese are already drilling in the Straits between Cuba & the US. They must not know what you do.

• 13. Southerner  |  May 26th, 2008 at 2:25 am

  PHNX,

  I guess it’s too much to expect you to have the attention span to read my post through to the end. The last section of my post deals with ANWR and the drilling in the Gulf. Furthermore, if you think that a recession or even depression in the US is going to stop China, India, etc in their tracks you must be on crack. They have modernized their economies and are trading globally - with the the EU, Russia, Oceania, South America, Middle East, Africa, etc. A sputtering US economy would slow them but find a serious economist who says it will halt their runaway demand for oil and I’ll buy you an icecream. Go visit Beijing (if you can afford to do it with your declining dollar). How many bicycles do you see on the streets? Those days are over baby.

  Nice try.

• 14. Southerner  |  May 26th, 2008 at 2:46 am

  By the way PHYNX, Chevron estimates that there is at MOST 15 billion barrels of mixed oil and gas in their test fields in the Gulf. If ALL of this was found to be extractable in the form of petroleum and was extracted tomorrow it would fuel current global demand for about 5 months. That’s the best case (sunny day) scenario according to the oil companies themselves and the hard fact is that right now we simply don’t have the technology or know how to remove oil that is 7 miles underneath the surface of a sea which is two miles deep. So go ahead, ignore the numbers and the data, it’s what people who view the world from a purely ideological viewpoint do best.

• 15. Southerner  |  May 26th, 2008 at 2:56 am

  And finally PHYNX, I did not say speculators do not exist, I said the exact opposite - that they indeed do exist but that they are not capable of gaming the global oil market to any significant long term degree. As I said above - if the underlying fundamentals do not support their theories about the future cost of oil then bullish oil speculators will lose their investments. The reason they have been winning big is the fundamentals have support their bullish viewpoints more and more as the data about supply and demand keeps coming in.

  Thanks again for completely misreading my post.

• 16. ViralNexus  |  May 26th, 2008 at 3:54 am

  I just wanted to touch on Saudi Arabia, Iraq, and peak oil which Sam/Southerner brought up. When Bush went to the Saudis to ask for more oil production they told him they would not. There was a lot of speculation as to why. There are quite a few voices in the Saudi oil market that are saying that going any higher than their 12 million barrel per day output could be reckless. 1) because they struggle to maintain a higher output meaning sometimes they can get it and other times they can’t and 2) they are afraid that a much higher output could eventually strain their supplies. Prior to the Bush administration the US was denied access to Iraqi oil fields by Saddam Hussein. As part of the post war strategy, the US government had set up a transfer of oil production and distribution to foreign oil companies but these plans were halted by Iraqi oil workers. During the oil workers strike the US attempted to have KBR run the facilities but they failed miserably and so they were returned to Iraqi government control. No I’m not going to be the one to jump on the blood for oil band wagon but when you really read into the Iraq post war planning you find that there were extensive plans for oil production but none for say an initial security apparatus for the looting and rioting that took place. We easily secured Iraq’s oil fields but allowed 90% of the ancient artifacts in the Baghdad museum to be destroyed. Conspiracy theory or not, the facts themselves are not promising. Peak oil is a real problem that we must face sooner or later. The UAE is struggling to maintain 2 million barrel per day output as is Iran with their 3 milion. Canada is our largest supplier and they have resorted to processing the oil sands which for them costs to barrels or oil for the one that they gain. In the post 1970 one Dr. Hubbert quite accurately predicted that oil production would peak and then begin to decline rapidly beginning in 1970. He was ridiculed and forced from him profession. Yet in the exact year that he predicted US oil production peaked and we all remember what occurred that year. Our oil was embargoed by OPEC countries and we couldn’t produce and refine the oil needed. Seismic geologists have scanned the world over and have found that there are very few untapped sources of oil. It has also been suggested that our oil prospect and drilling technologies have peaked and there isn’t really much more we can do to improve them. So, peak oil is real- it happened here and it will eventually happen through out the world. Gas prices will only continue to rise as demand increases and production decreases.

  As far as our viability in the world is concerned- the US is steadily declining in its world superpower status. This is evident by the fact that places like Iran choose to ignore us when we make demands. It is also evident in the nonchalant attitudes of places like China and Russia when it comes to our concerns about places like Iran. If our economy collapses it will have a short term affect on the rest of the world and then we will be on our own. We are $10 trillion in debt and we have a backless paper based fiat currency. Other than our military might, what really keeps us in the position we are in? The only way that we can really survive is by cutting our spending, fixing our economy and finding the best most efficient way to ween ourselves off foreign oil. If we start now and we come up with renewable fuels (except for current ethanol, yuck!), alternate energy sources, and efficient electric automobiles we can come back out on top when the rest of the world crashes because of their reliance on oil. IT HAS TO END PEOPLE. It is a nonrenewable energy source and it is very much finite. Lets give ourselves a fighting chance for a more prosperous future.

• 17. Eric T  |  May 26th, 2008 at 10:15 am

  Sam Spade-

  John McCain’s gas tax relief is exactly what the American people need. Today’s price may not be that much higher than last years highs, but today’s gas pump price doesn’t account for the $135.00 a barrel oil on the futures market. When the futures, shall I say, become the present. The gasoline price will be much higher.

  John McCain has a good reason to be concern for the families who are already struggling with todays prices. Obama is more concerned with increasing government spending than helping families make it from check to check.

  Sam I’m paying over a $100.00 a week to drive back and forth to work, maybe you take a bus or something, but don’t you think price is more than a little uncomfortable??

  Letting the free market work, will allow people to see the reality, when making choices for vehicles, vacations ect… ect..

  I believe in government for the people by the people, not for the corporation by the corporation, or for the government by the government.

  So if the market continues to push these prices higher for much longer. People will not be able to afford to drive across town to work at a job. People will not be able to make payments on bills, it will have a negative affect on many other sectors.

  I agree with you on removing speculators, more Alternative Energy.

  Right here where I live. American Axle cut its workers pay and benefits in half. Outsourced a bunch of jobs. These guys definately can’t afford $5.00 gasoline. My Dad just filed bankrupcy and is going to lose the home ect… ect.. Hillary seems real “corporate” to me, Obama is a tax hiker, with a slim record on everything, the stuff I do know about him is not impressive. McCain sees the storm coming at least and wants to try and offer some relief.

• 18. Sam Spade  |  May 26th, 2008 at 3:19 pm

  Wow, Eric, I’m not trying to be insulting but you don’t seem to be able to read. Did you even read anything I wrote above? Where the hell did I say that speculators should be removed. Also, the gas tax holliday does nothing to affect the fundamentals that I discussed at length. Your post is made up of nothing but empty rhetoroic and cliches like “I believe in government by the people for the people”. Blah, blah, blah. This is economics we’re talking about, mushy populist thinking like yours explains why America finds itself in such an uncomfortable position today.

  But yeah, go ahead and call Obama a “tax hiker” if that makes you feel better. It has absolutely zero to do with the underlying price of gas but I’m sure it makes you feel better inhabiting your warped little ideological framework.

  PS - If you’re concerned about cheap gas why aren’t you urging George Bush to cut back on the insane military/war spending of the last few years which have pushed this country into unparalleled twin deficits? Why aren’t you urging him to bring the bankrupting wars to a speedy conclusion? Why aren’t you urging him to stop insinuating that war with Iran could break out at any moment? All of these have a direct effect on the price of oil (it has multiplied sixfold while Bush was in office). US oil companies have over the past year posted the largest profits in global corporate history. Guess that’s what happens when you elect an oil man to the whitehouse.

  But no, the problem is of course Obama, while John “I don’t know much about economics” McCain’s plan is going to solver everything. Riiiiight.

• 19. phnx  |  May 26th, 2008 at 7:52 pm

  sam/Southerner, Are you experiencing an identity crisis? Which one of you multiple personalities is with us now?

  Your passing mention of ANWR and focus on the Gulf was what I refered to. Let’s examine your comments:

  1. “Chevron says that there is only a mere 15 BILLION barrels of mixed oil and gas in the TEST fields”. Gee that only represents about US$2 trillion in money we won’t have to pay the Arabs. These results are just their test beds, what percentage of the gulf do you think that represents? OBTW you forgot to reveal that this is a find at just ONE SITE. Was that an oversight on your part, or a simple effort to lie about the facts?

  There are new reports out circulating that Chinese firms are planning to slant drill off the Cuban coast near the Florida Straits, tapping into U.S. oil reserves that are estimated at 4.6 billion to 9.3 billion barrels. But leftists in Congress are preventing US companies from drilling there.

  2. “In the case of ANWAR it’s estimated that if all of it came online tomorrow it would supply less than 5% of America’s petroleum needs.” I’m not sure what time reference you use, but the low end estimates of ANWR are 6 Billion barrels, which approximates our annual consumption. The high end estimates 16 billion barrels of recoverable oil with as much as 30 billion in place. So that equates to anyhere from $780 billion to $2 trillion that reduces our balance of payments deficit.

  It might further be noted that in 1968 leftists skeptics such as yourself predicted there was only enough oil in the Purdhoe Bay find for 5 months of supply. since 1977 over 16 billion barrels have been pumped from there. It is just as likely that you are off now as your were then, only now the stakes are higher.

  OBTW there are 30 Trillion cubic feet of gas at Purdhoe which has been injected from the start pending approval of a gas pipeline to the US. A similar result could be expected from ANWR.

  OBTW ANWR is just 60 miles from the pipleline from Purhoe Bay so it would be a relatively simple effort to tie in.

  Additionally, the vast extent of U.S. oil shale resources, amount to more than 2 trillion barrels of oil if the leftists in congress ever approve projects to develop it.

  3. “if you think that a recession or even depression in the US is going to stop China, India, etc in their tracks you must be on crack. They have modernized their economies and are trading globally - with the the EU, Russia, Oceania, South America, Middle East, Africa, etc. A sputtering US economy would slow them but find a serious economist who says it will halt their runaway demand for oil and I’ll buy you an icecream.”

  I’ll pass on the icecream, I’d rather you eat crow.

  “The United States economy is expected to enter a recession in 2008 and there is a 25-per-cent chance the rest of the world will follow suit, the International Monetary Fund forecast on Wednesday. But the US recession, brought on by a crisis in housing and financial markets, is a mild one that will likely have a lesser effect on global growth than in past down-cycles, according to the IMF’s semi-annual World Economic Outlook report”

  Read the whole article here:

  http://www.earthtimes.org/articles/show/197783,imf-us-economy-in-recession-25-per-cent-chance-world-will-follow.html

  70% of China’s economy is dependent upon exports…their largest market…the US. If you don’t think that a serious recession would seriously damage their economy and reduce their demand for oil, you are the one on crack. The same goes for India.

  http://english.peopledaily.com.cn/200511/20/eng20051120_222746.html

  But don’t believe me, take it from the Chinese People’s Daily.

• 20. Eric T  |  May 26th, 2008 at 10:42 pm

  Sam-

  You said
  “the gas tax holliday does nothing to affect the fundamentals that I discussed at length.”

  That is why the John McCain tax relief plan is great, it doesn’t manipulate the market at all. But it does provide some relief for people who ARE having a hard time with the high prices.
  It is not like opening the reserves or taking steps to attempt to steer the market in any way at all. The gas tax relief lets the price run its own natural course, and when their is no more buyers at a certain price some selling will start.

  you said-
  “Drilling for oil in the Gulf, ANWAR, etc. etc. Okay, for the last time, it’s virtually impossible with our current technology to get oil out of the Gulf of Mexico”

  This is not even close to being true. You really believe this?

  The Chinese may be a large consumer of oil, but they have been doing everything they can to conserve energy. they have raised interest rates a dozen times to try and control inflation and even capped gas prices to prevent speculators, and futures traders from getting excited and going apesh#% and driving the price to the moon. My guess is that this extra care to contain inflation is because, if our people don’t have some extra cash to go shopping and buy their products. Their economy is going to slow as well.

• 21. Sam Spade  |  May 27th, 2008 at 2:56 am

  Where to start?

  1. First of all, PHYNX, the 15 billion barrell figure is Chevron’s own TOP estimate of ALL the petroleum PLUS GAS reserves found in the entire field, not just in their test area for goodness sake. What in the hell led you to believe that they would offer up a limited estimate of their test area and not the entire field. Why in the hell would they do that?

  Chevron is a publicly traded oil company which is interested in encouraging people to invest in it, you can take it to the bank that these estimates are at the top end of optimism. Your figure is based on them being correct and all the reserves being in the form of petroleum (not gas), both extremely unlikely (the second is in fact impossible). You say that this find is worth $2 trillion to the US economy. Baloney. Do you think they’re going to extract this stuff for free? The Gulf’s deep sea oil beds, if they ever come on line in commercial quantities, will represent the most expensive petroleum ever recovered from under the surface of the earth. The ocean bed is 2 - 3 miles deep where Chevron’s field is found, once they get to it they have to get through 5 - 8 miles of sediment, bedrock, salt and other substances. At best they can START to get it out of there some time after 2015 (that’s by their own estimate) and if you knew anything about oil fields you would know that it is likely to take them at LEAST 10 - 20 years to get the oil out from there. And again, you ignore the fact that Chevron’s own engineers admit that they’re not even sure quite how to remove it in commercial volumes from that far down in the first place.

  I personally don’t have ANY problem with deep water oil drilling in the Gulf, I’m not against it for environmental reasons or anything like that. It’s just a simple economic fact that pumping oil from those fields is not going to make any siginificant difference to America’s import needs or the price of crude. And by the way, do you think that just because the oil is found in our waters that you will pay ANY less for it at the pump? You think Cheveron are going to say to themselves - “Well, we can sell this for $150 a barrell (or whatever) on the open market or we can sell it to the good people of the US for much less. Hell, let’s reduce our profits and sell it domestically for a discount even though that makes no business sense whatsover.” Can you see that happing? Can you? I can’t, so why are you so excited about this oil find, which, in the big scheme of things is basically insignificant.

  2. You make the same stupid mistake with ANWAR, believing that all the oil can be removed at once, at little cost and worst of all, quoting the oil companies own top estimates for what is to be found there while ignoring the estimates of independent researchers.

  3. Regarding the sunny-day idea that a US recession is somehow going to magically make China, India, etc. go away and take their insatiable demand for oil with them I just have to ask you, what are you smoking? You have an outdated America-centred view of the world. This isn’t the 1960s when the majority of the world’s goods and services (by value) originated in the US. As I said above, a US recession would slow down the economies of the far east but the fact is that these economies have restructured themselves to be highly competitive in recent years and there is basically zero chance that they are going to stop growing in the long term. They have earned their recent results because they have invested massively in things like infrastructure and education while the US has stagnated deplorably in these areas. Find a single reputable and non-ideologically driven economist who supports your wishdream scenario and I’ll retract this point.

  The hard fact is that China, India, south east asia, etc. are here to stay as competitors and we’d better get used to it. They have well educated, highly motivated populaces who are not about to be halted from achieving their dreams by an American recession. You want proof of how far they have come? In a study conducted back in 2002 it was found that there were over FIVE HUNDRED THOUSAND Indian born software engineers and IT professionals working in this country. That’s just the Indian born ones. If that doesn’t tell you how far we have fallen behind in terms of science education nothing will. But then, what do you expect when we are lumbered with a president who believes that “the jury is still out” on the subject of evolution.

• 22. Sam Spade  |  May 27th, 2008 at 3:02 am

  Eric T -

  Okay, I see that economics go way over your head. Put simply, what you prescribe (a gas tax holliday) would save the US consumer exactly 18.4 cents per gallon at the pump. Did you know that? Is that what you’re all excited about? You are supporting a candidate who has proposed exactly nothing in terms of a solution to America’s real energy problems.

  You childishly label Obama a ‘tax hiker’ (how does maintaining a current tax make him a tax hiker by the way?) while ignoring the fact that Obama has outlined in great detail a rational approach to energy which will allow Americans to prosper over the course of the current century while McCain has proposed that we bury our heads in the sand and just try to ignore this problem until it goes away.

  Obama’s proposals on the other hand involve investing HEAVILY in alternative enegery research, strengthening the dollar and improving energy efficiency for vehicles, homes and industry.

  For instance, on average American vehicles currently achieve 25 mpg while the Chinese (yes the Chinese!) achieve 35 mpg and those darned pesky European late drinkers enjoy 45 mpg on their autobahns. That is nothing short of a national shame. It would not in fact be a difficult thing to force Detroit to safely engineer vehicles with a minimum mpg level of 45 mpg IF THE WILL WERE THERE. I blame Bill Clinton just as much as Dubya for not having done this, neither of them were willing to confront detroit’s lobbyists or the nations drivers with standards that would have made vehicles SLIGHTLY more expensive in the short terms while making driving FAR cheaper in the long term.

  Tough policies and genuinely far-sighted standards such as those that Obama has proposed are the kind of things that are going to get us out of this hole. They are the kind of policies which will stop up donating trillions anually to the Saudis, Iranians, Venuzeulans, etc. An 18.4 cent tax break on the other hand is going to do exactly diddly squat.

  If you are hurting at the service station then for God’s sake vote Obama. He’s the only one who will reverse the pro-big oil policies Bush/Cheney have shackled this country with over the past 8 years.

• 23. phnx  |  May 27th, 2008 at 9:50 am

  southern sam

  You misread and misinterpretted my post. Did I say any of these finds would lower the price at pump…no. What I did say is that it would lower our trade deficit. That’s the money that goes overseas to foreigners.

  Regarding a recession and China, you are not prepared to accept the word of the Economic Monetary Fund regarding the impact of a US recession on the world or the Chinese People’s Daily regarding the dependence of China on exports and specifically the US. Then its pointless to discuss any of this.

  The rest of your post is completely off topic.

  I shold have known not to engage in a rational discussio with anyone with MPD.

• 24. Southerner  |  May 27th, 2008 at 2:48 pm

  No Phnx,

  I called you on your nonsense claim that a US recession would stop China’s growth and I 100% stick by that. I never claimed that a recession here would not spark one over there or in Russia etc. It is interesting to note in the IMF report you quote above though that the IMF believes that a US recession is only likely to have a “mild” effect on global growth. So what’s your point? Do you think any downturn in the Chinese economy prompted by a US recession would be permanent? Are you the kind of guy who sits around dreaming of winning the lottery also? It’s a similar sort of thought process in my opinion.

  Again, find a single economist who agrees with this nonsense. This is such a massively stupid idea I can’t believe I’m even wasting time debating it with you. But then again, it’s similar to Bush/Rumsfeld’s blarney that we would be greeted at Liberators in Baghdad and therefore there was no need to worry about the messy details of post war planning. Wishful thinking seems to be copper-bottomed hallmark of right wingers these days, unfortunately for America.

  By the way, you never said anything in your previous posts about your belief that Gulf drilling would reduce trade deficits and not reduce oil prices, that’s a new idea you’re offering now since I’ve demonstrated that these fields would be essentially meaningless to the global price of oil. You see phynx, you’re stuck on the wrong side of this issue and the only way you can maintain any argument is to continually move the goal posts around. Pathetic.

• 25. phnx  |  May 27th, 2008 at 3:57 pm

  MPD Sam

  Check point 2 post 19. I never commented on the price of gas at the pump that was your mantra. What concerns me is energy self sufficiency, and our balance of payments which ultimatley affect things like our economy and the stregth of our currency. But I guess you would prefer to give money to the Saudis.

  BTW No comments on the oil in the straits, the gas in Purdhoe and the shale oil reserves that you leftist are blocking form development? You don’t want a solution you just want a political issue you can rant baout.

  YOU are pathetic windbag.

• 26. Sam Spade  |  May 27th, 2008 at 4:17 pm

  No, you never mentioned self sufficiency, balance of payments, etc. I was the one who brought all of those points up originally. I’m glad that you are now jumping on the bandwagon and agreeing with me though. Regarding oil in the straits, Purdhoe bay etc. read my posts above, all of that is covered. The reason oil is the price it is today is that none of the experts feel any of these will make a significant difference to the supply and demand crunch. Perhaps you should write them a letter to enlighten them of your brilliantly informed views.

  I also take your lack of response to my other points to mean that you agree with me that it has been George Bush’s disastrous policies (two wars in the middle east, deficit spending, weak dollar, etc.) which has brought all of this on. Amercians in general seem to agree and are mad as hell about this. His popularity ratings aren’t at 28% just because he gives female heads of state neck rubs at international conferences. Roll on November.

• 27. phnx  |  May 28th, 2008 at 9:27 am

  The price of oil is a function of many components of which demand is just one. The war in Iraq is certainly a factor. The weakend dollar is a factor. Iran’s threats are a factor, Chavez’s threats are a factor, Nigerian rebels are a factor. The markets hate instability, and the unfortunate fact is that much of the world’s oil is in regions of political instability. All the more reason for us to develop our own sources of energy, oil included.

• 28. phnx  |  May 28th, 2008 at 12:43 pm

  “The price of oil can’t rise much higher without causing a GLOBAL recession.” This is according to a report released yesterday by Economist Noureddine Krichene of the International Monetary Fund.

• 29. Southerner  |  May 28th, 2008 at 3:16 pm

  PHNX, yes, oil rising further is likely to cause a global recession of some kind. So what? Do you think that once the recession ends oil will be ‘cheap’ again or that demand will stop increasing in China, India, etc? Keep smoking the good stuff.

  Also, nice dodge above when you talk about the price of oil being a function of ‘many factors’. All of the ones you list are directly caused by George Bush’s policies. In the case of Iran, the markets aren’t worried about Iran’s ‘threats’, the markets are worried about George Bush’s ridiculous idea to use military force against Iran for no damned good reason and ensuing oil embargo which would likely occur.

  In the case of Venezuela, the instability in our relations is caused by the fact that the Bush administration insanely backed an illegal coup to oust Chavez in 2002:

  http://en.wikipedia.org/wiki/2002_Venezuelan_coup_d‘état_attempt

  So, I’m glad that we’re both on the same page in agreeing that George Bush is responsible for the current high oil prices. He’s the one who started two open-ended wars of occupation in the middle east, he’s the one who gave huge tax breaks to the rich at a time when military and trade spending was sending the country into history breaking deficits. He’s the one who allowed interest rates to be reduced all the way down to 1%, provoking a ‘free money’ credit boom which made our balance of payments even worse. He’s the one who weakened the dollar by over 50% by enacting all of the above policies.

  The price of oil has multiplied sixfold during his administration, but then what else do you expect when you elect a self-serving oil man as president?