Friday, January 20, 2006

RIGZONE - U.S. Won't Run Out of Fuel if Iran Flows Stop - API

This is meant to calm us? In U.S. Won't Run Out of Fuel if Iran Flows Stop - API, an economist is quoted about near term oil supply and pricing worries. Namely, the U.S. is probably getting ready to beat up on Iran like we've been doing to Iraq. As I've pointed out in numerous postings, the Project for a New American Century (and the NEOCON's in general) have had this plan since at least 1992, to reshape the Middle East beginning with Iraq and moving on to either Syria or Iran (or both), toppling governments as they go and "installing" moderate democracies in their wake.

The current tough stance against both Iran and Syria fits right into that plan, regardless of how dangerous either country really is.

But back to this nutball economist and his attempt at psychological mass influencing of opinion.

In all likelihood it will be a tight market," said John Felmy of the American Petroleum Institute. "But as long as the market system is allowed to work we will have price adjustments that allocate scarce supplies," he told reporters at a briefing, "I would not expect to see shortages."

... Felmy acknowledged that Saudi Arabia, the world's only producer with significant spare capacity, would not be able to totally fill the gap should Iranian flows stop and that U.S. motorists could experience spot shortages of fuel.

... We can see occasional gas lines and spot (supply) problems like we experienced right after Hurricane Katrina if the public panics but that was a real special situation," he said.

The context is that ... assuming some significant action is taken against Iran, then we can expect an oil supply disruption. Quite possibly Iran will become unable to export oil. Oil prices have been surging the last couple weeks because of that expectation.

So, when the economist says "the market system is allowed to work we will have price adjustments that allocate scarce supplies" ... well ... let me provide an interpretation.

  • It means that oil products will become scarcer ...
  • hence the price will go up ...
  • hence once the price goes up, people will decrease their usage ...
  • then with decreased usage, the demand will fall (some) and eventually the supply/demand equation will reach some equilibrium.

He says the same thing himself, but he's pussyfooting around the effect. It means disruption to our calm lives in the U.S. It means there will be a lot of angst this year, again, just like last year, over oil, gasoline prices, and "why won't the government do something about this". Just like last year.

Why won't the government do anything about this? Well, it's because the people re-elected that sleazeball corrupt President Enron, Vice President Halliburton and Secretary of Defense Chevron. That's why.

The government isn't about to do anything about this, because the government was bought and paid for by the oil industry. That's why.

Oh, and what should the government do about it anyway? The people in their grand lunacy are buying humongous SUV's that get 10 miles/gallon when there's a tailwind. In other words, the oil demand has only been going up, and up, and up, and up. So long as the U.S. demand for oil keeps going up the problem will only get worse and worse.

The fact is the U.S. has very little oil within its own territory. That means we have to look outside the U.S. for the majority of the oil we consume (aroundd 70% of our oil comes from foreign sources). Since oil is such a crucial part of the U.S. economy (we can hardly do anything without burning some oil), the supply of oil is absolutely essential to continuing life as we know it in this country.

That means, like it or not, that the government has to go to great lengths to ensure supplies of oil. Because without the oil the country will collapse.

And what are those great lengths? Try, for starters, to consider the purpose of invading Iraq.

The reasons given by the government for the war have all been shown to be poppycock, and what's worse is it's clear they were consciously lying to us and the world as they originally told us those stories. It wasn't about WMD, it wasn't about evil Saddam, etc. There's lots of WMD and evil dictators in the world which the U.S. is doing nothing about. Instead Iraq has the second largest oil reserves in the world. And Iran, the next target apparently, is right up there with its own large oil reserves.

The real solution is for the U.S. to permanently decrease its oil usage. But so long as President Enron, Vice President Halliburton and Secretary of Defense Chevron are in office don't expect that kind of wisdom to escape from the mouth of government.

Instead it's up to the people to do this on our own.

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