Tag: oil politics

Gas prices, the ppb of oil, and the future

I filled up my car today and paid $2.11 a gallon here in The People’s Republic of Connecticut. In some other parts of the nation that don’t have ridiculously high government imposed gas taxes – taxes that they claim they will use to fix the crumbling infrastructure and ill maintained infrastructure they have held tenure over, but somehow always end up in the general fund where they then get spent on vote buying social pet projects – this number is now below $2 a gallon. The last time I remember oil under $2 a gallon was a decade ago. But why is this happening? There are a ton of varying opinions about cause and effect out there. Let’s explore.

First off, the obligatory democrats are always talking out of their ass reference. They knew they were full of shit, we knew it, and because despite every and all efforts by the Obama administration failing to hinder the expansion of US oil recovery, we got more drilling, we now have definite proof. Collectivist Keynesian shitbags can pretend that the economic laws of supply and demand don’t matter – like they do with the reality of human nature and a lot of other natural laws – but reality has a way of bitch-slapping stupid people. You fuckers knew you were lying when you were pretending more oil on the market would not reduce prices, and we now have proven it. The opposition to any more drilling and recovery was primarily because these Marxists fucks want to destroy the brown energy industry to favor their friends, and coincidentally another one of their special interest big donor blocks, in the proven failed green industry.

Back to business now that we have gotten that out of the way. This precipitous price drop, even though I believe it will not remain that low forever (more about that later), is bound to jump start our economy and help a lot of us that now will have extra pocket change. And it doesn’t come without the profiteers trying to screw over the tax payers yet again. The leftists, under the guise of getting more money to fix the very infrastructure they have been neglecting for decades, precisely because they were diverting gas tax dollars to social pet projects, are putting pressure on everyone to get more money from people that are finally getting a much needed and deserved break in the though economic times the leftists have given us.

As if this time the bulk of this extra revenue wouldn’t actually also be diverted to vote buying projects they depend on. Yeah, and pigs will fly too. These assholes count on people’s stupidity and envy. Think about how these will impact us all once prices climb again – and they will. Let us also note that this money grab is not limited to the feds. Many state governments, especially the ones run by democrats that do the same as the feds (like mine), are all hoping to follow that example and do the same. Can’t have people keeping more of their money when they need to buy votes in these desperate times that their base consists of so many of the non-productive. It is almost as if these people’s decision making is based on what can do the most economic harm possible. Of course, when you already believe the money doesn’t belong to the people earning it in the first place, you tend to not bother with these stupid details anyway.

Now that we have gotten that nasty business out of the way, let’s discuss why the prices are dropping as precipitously and fast as they are. The general consensus is that the Saudis are doing this, and it is on purpose. The Saudis, OPEC’s biggest producers, have decided not to cut their output to regulate prices, and are counting on their over $800 billion in reserves to ride out this shorting of the market. The move to let the oil prices plummet is basically driven by their calculated belief that if the price goes too low it will force fledgling the US oil industry, especially the fracking industry that the Russians had been directly targeting without much success so far, I add, to collapse.

The Saudis, like most of the other OPEC nations and Russia, all need oil to be at between $90 and $100 a barrel to keep their current economic plans viable. The supply produced by the US has basically made that impossible, because the extra oil was sooner than later going to force a correction that would drop prices and keep them between $65 to $75 per barrel. And while that drop is something that would be an economic boon to most of the world that depends on oil for energy, it would spell a slow economic death for the oil producing nations that need/want the higher prices. Have no doubt that this move is a calculated attack on the US oil industry. The Saudis are counting that if they keep the prices below $50 a barrel for a while that they can drive the US out of the oil producing. Even more important is their belief that the greens will then prevent that oil producing industry from coming back for decades. This gamble that the greens will prevent the oil production from starting right back up again is based on their observation of how things played out in the 70s, and while many believe that this time it will not work, I think that their gamble isn’t all that crazy. The greens, after all, want to destroy the brown energy sector and don’t give two flying fucks how costly and destructive their agenda is, because in the end it is about them lining their pockets above all else. Most of the big actors have become stinking rich fucking us all over.

The fact is that this economic boon they will usher in and the low gas prices themselves can’t last as the demand and supply curve correct themselves eventually. But then again, we can make some economic moves that will preposition us to come out of this attack against our economy and economic interests, as the winners. The fact is that anything that keeps the price of oil lower than the $90 to $100 per barrel that the actors behind this attack want is a good thing. Lower prices would be a huge hit that forces some of the world’s shittiest nations to change their ways, for lack of funds to cause trouble with, to at a minimum do less harmful things. That would be a big bonus for the world in general. Of course I doubt this administration and the collectivists that are in league with the greens have any desire to do so, and they will actually do things that will undermine that possibility. We need to make sure we push back and prevent them from doing that. Cheap energy is exactly what the world needs right now, just like it needs a lot less big intrusive Keynesian nanny-state government.

In the mean time enjoy this gift for as long as it is allowed to last by the people that want to control us serfs.

Blood for Oil?

Glenn Greenwald has an interesting piece up on the latest from wikileaks:

The entire article is worth reading, as it details how Gaddafi has progressively impeded the interests of U.S. and Western oil companies by demanding a greater share of profits and other concessions, to the point where some of those corporations were deciding that it may no longer be profitable or worthwhile to drill for oil there. But now, in a pure coincidence, there is hope on the horizon for these Western oil companies, thanks to the war profoundly humanitarian action being waged by the 2009 Nobel Peace Prize winner and his nation’s closest Western allies:

Is there anyone — anywhere — who actually believes that these aren’t the driving considerations in why we’re waging this war in Libya? After almost three months of fighting and bombing — when we’re so far from the original justifications and commitments that they’re barely a distant memory — is there anyone who still believes that humanitarian concerns are what brought us and other Western powers to the war in Libya? Is there anything more obvious — as the world’s oil supplies rapidly diminish — than the fact that our prime objective is to remove Gaddafi and install a regime that is a far more reliable servant to Western oil interests, and that protecting civilians was the justifying pretext for this war, not the purpose? If (as is quite possible) the new regime turns out to be as oppressive as Gaddafi but far more subservient to Western corporations (like, say, our good Saudi friends), does anyone think we’re going to care in the slightest or (at most) do anything other than pay occasional lip service to protesting it? Does anyone think we’re going to care about The Libyan People if they’re being oppressed or brutalized by a reliably pro-Western successor to Gaddafi

Well, yes, I kind of think these aren’t the driving considerations and there are several reasons for this.

First, the United States was not the driving force behind this war — Europe was. And the Europeans — being older and wiser than us — have a long long history of trying to appease oil-rich potentates. Their lack of support for Israel, for example, is heavily based on oil politics. And it was the UK that specifically released mass murderer Abdelbaset al-Megrahi — against the Obama Administration’s objections — in an effort to appease Libya on trade issues.

Second, the WaPo article that is the basis for Greenwald’s undermines the conspiracy mongering quite a bit. It notes, for example, that this influence process worked both ways. Gaddafi was trying to use oil to influence US policy. He was furious that he wasn’t getting more political consideration in exchange for oil. And the oil company production took a hit, not from nationalization, but from the unrest. Had Gaddafi been allowed to massacre the resistance, oil production would be higher today.

Third, the current action is not good for anyone’s business interests. The Left tried this “blood for oil” logic out in Iraq as well. They didn’t consider that the cost of the Iraq War (so far) would have bought us a quarter of a century of Iraq’s entire oil production. Going to war for Iraq’s oil would have one of the dumbest business decisions of all time. Not that the Last Administration was immune from bad decisions, of course.

Libya has about 40 billion barrels of proven reserves — about $4 trillion at current market prices — and is pumping out about 2 million barrels a day — $200 million worth. However, not all of that production is for Western companies and the marginal difference between what Gaddafi wanted and our supposedly nefarious oil companies would want is not nearly going to be worth the cost of the war (probably around $10 billion so far).

Note also the verbiage used: the oil companies were “considering” abandoning Libyan oil field. Not that they had.

Fourth, this thing did not start with us. It’s not like we started bombing Libya for no reason. His own people started a rebellion. Nor did that rebellion happen in a vacuum — it was part of a wave of political rebellion across the entire region.

Now all this having been said, I haven’t proven that the war didn’t start for oil. All I have done is spelled out four considerations of why this may not be the case. Companies and countries make dumb decisions and there’s no reason for them to have acted rationally.

In fact, I do think it likely that oil is influencing our actions here. But not an evil conspiracy smoke-filled room level. I think it’s more likely that the oil issue brought our particular attention to this country. Oil is why we noticed what was going on; it’s not necessarily why we acted the way we did.

Of course, this is the point where I have to note the inconsistency of the rest of the Left. There is far less evidence that oil interests informed our decision to go into Iraq than Libya, but it’s an article of faith among the Democrats that the former was an evil oil-motivated war while the latter is not. And however much they might be theorizing about oil interests in Libya, they have yet to make anywhere near the ruckus about Libya that they did about Iraq.

In that sense, I actually have to praise Greenwald for, unlike so many, not being a partisan hack. He’s just as conspiracy-minded with Obama as he was with Bush. That’s something, I guess.

Update: I should note that there is a catch-22 here. Had we not acted in Libya, the same people complaining that we acted because of oil would be complaining that we didn’t act because of oil.