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Date Posted: 22:51:30 02/25/04 Wed
Author: mt. healthy mountaineer
Subject: oil interests?
In reply to: Xanthor 's message, "Re: Controversial Question" on 08:26:34 02/24/04 Tue

XANTHOR: "The man is fighting his daddy's war and his administration's oil interests and need to be removed from office before he kills more of our troops in needless and unfair wars for the wrong reasons."

I often hear this oil interests accusation bandied about with the Bush administration(s) and the Iraq crises. Please explain something to me - How will Texas oil companies be helped by having more oil coming in to the United States? It makes no sense economically - the Supply and Demand graph tells you that the less of something there is the more value it has. The more of something there is the less value it has. More oil = less price per barrel = less profits per unit of oil sold.

Some may say that these Texas oil companies will get rich by refining the Iraqi oil, which sounds plausible until you find out that we have so few refineries in the US right now that we can just barely refine the oil we produce. (Note massive price spikes in the midwest 2 summers ago when a Chicago refinery had a fire - remember the O'Bannon gas tax suspension in Indiana? and the last summers gas shortage fiasco in Phoenix when they had a pipeline to a single refinery fail - $3.00 / gallon was not uncommon In both cases there were gas shortages because there was no extra refinery space available anywhere to make up for the down time - all of the refineries are producing at capicity or awful close to it) If we can't even refine the oil we have now, how can we possibly refine Iraqi oil, too?

A better way to help Texas oil companies would be to simply cut off the Iraqi oil from the world market. The supply and demand graph tells you that less oil on the world market means higher prices for all of the other producers. The Clinton Administration pursued just such a policy for eight years. Maybe they were the ones in bed with "Big Oil?"

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