Bush rejects $50 oil from Chavez, would drop gas by $1/gal.

[Karlin]

http://progressive.org/mag_intv0706

....the president of Venezuela made Bush the following astonishing offer: Chávez would drop the price of oil to $50 a barrel. That would bring down the price at the pump by about a buck.

Wow eh? But Bush said no, and in doing so we can start to see some of the complexities behind the rising price of our gasoline.

Its not just supply, nor refinery capacity, nor much to do with the cost of getting the crude up from the ground. No - its all got to do with the massive USA budget debt and deficit. As a way to keep afloat, the Saudis - Bush's best friends despite the fact that 19 of the WTC terrorists came from Saudi Arabia - the Saudis will buy up USA treasury notes with the oil money the USA spends in Saudi Arabia.

So it is simple, after all. But Americans are paying this steep price for gas just to prop up the treasury, and of course they would be further ahead if they could just pay for the gas. The wreckless spending of the Bush administration has dug a deep hole with their military spending - and if they cycnical ones are correct in the military action being done for the sake of USA energy security [not terrorism] , it is al a big waste.

Its all being done to keep the Elites wealthy who now benefit from the "oil based economy" happy. Dominating every nations economy by having control of the global trade in oil has been the American way for 50 years or more.

If the Elites could just let go of that insecurity over control, develop alternative energy and find profits there, plus save the planet, and get USA forces out of Islamic nations with oil, the world would be a fine place. As it is, they are just ruining it all.

This refusal to buy cheap oil for Americans just proves the insanity of the oil economy continuing any further into the 21st century.

 

[Simpleton]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

Remember, they create the Problems, and then offer the Solutions.

And you are most correct when you say "solutions." The first solutions are always intended to fail. The money is made by offering failed solutions. Then, when discontent has risen to a level where the people will no longer tolerate anymore failed solutions, and assuming they haven't dug themselves too deep with their "engineered problems," they take corrective measures.

National disgrace = politics.

 

[I think not]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

Bush (A public servant) cannot tell corporations what to do. Chavez (public servant) controls his oil fields, it's not the same thing. It's like Chavez asking Harper to do the same thing, how can Harper tell corporations what to do?

Isn't this entire article self-explanatory?

 

[Simpleton]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

Bush (A public servant) cannot tell corporations what to do. Chavez (public servant) controls his oil fields, it's not the same thing. It's like Chavez asking Harper to do the same thing, how can Harper tell corporations what to do?

Isn't this entire article self-explanatory?

One point of clarification. Civil servants can tell corporations what to do. Civil servants (aka: Stephen Harper) can introduce legislation and pass laws that make it a crime for corporations not to do what they're told. Secondly, when corporations come knocking on the door with bribe money and influence peddling, the civil servants can tell them to go f*ck themselves.

It's not hard to tell people to f*ck themselves. I do it almost everyday, and I don't get offered bribes, and I'm not a civil servant.

 

[athabaska]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

Bush (A public servant) cannot tell corporations what to do. Chavez (public servant) controls his oil fields, it's not the same thing. It's like Chavez asking Harper to do the same thing, how can Harper tell corporations what to do?

Isn't this entire article self-explanatory?

True. Chavez governs a country with 80% poverty and he runs around the world like a mafia don bestowing largesse while his country slides into even greater poverty. He uses Venezuela oil revenue as his own personal slush fund.

It's easier to give away millions abroad than to roll up the sleeves and get down to providing clean drinking water, sanitation and quality education.

 

[I think not]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

One point of clarification. Civil servants can tell corporations what to do. Civil servants (aka: Stephen Harper) can introduce legislation and pass laws that make it a crime for corporations not to do what they're told.

Not to do what they are told? Do you like being told what to do? Corporations have limits just like people do, they can't do anything they want. They are taxed just like you are. Great thinking there.

You are going to limit corporate profits because a Socialist blowhole in Venezuela doesn't know the first thing about handling an economy? Gasp! 8O

 

[Simpleton]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

One point of clarification. Civil servants can tell corporations what to do. Civil servants (aka: Stephen Harper) can introduce legislation and pass laws that make it a crime for corporations not to do what they're told.

Not to do what they are told? Do you like being told what to do? Corporations have limits just like people do, they can't do anything they want. They are taxed just like you are. Great thinking there.

You are going to limit corporate profits because a Socialist blowhole in Venezuela doesn't know the first thing about handling an economy? Gasp! 8O

I reread my post and searched for the part where I said that the government should limit corporate profits. I couldn't find it. I asked my brother to read my post and tell me where it says that the government should limit corporate profits. He couldn't find it either.

I called up a friend on the phone. I said, "I'm going to read something to you. Tell me what you think it means." I read the post to him, and I asked him for his interpretation. He said, "I think it means that the government has the power to enact laws and the power to tell corporate interests to screw themselves." I followed up with this question: Does it say that government should put limits on corporate profits? He responded in the negative.

I have one question for you, ITN: What the hell are you talking about?

 

[I think not]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

He said, "I think it means that the government has the power to enact laws and the power to tell corporate interests to screw themselves." I followed up with this question: Does it say that government should put limits on corporate profits? He responded in the negative.

If he responded in the negative then what does he mean by saying corporations should screw themselves and their interests, what other interests other than profits do corporations have?

 

[Toro]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

There are so many things wrong with this, its hard to know where to start.

First, Chavez can't lower the price of crude to $50 by dictat. Bush can't. The House of Saud can't. No one can. Oil is a fungible commodity. OPEC used to be able to influence the price of crude within a band when there was excess capacity, but capacity is tight (or at least was tight). Oil is at $75. The reason why its at $75 is because of perception in the market - perception of a potential showdown with Iran, perception of a repeat of last year's hurricane season, perception of ravenous demand from China and India, perception that the world is near Hubble's peak, perception of a good summer driving season, perception of tight refining capacity, perceptions of a weak US dollar, etc. Some of this is valid, but the economics of the oil industry are such that oil shouldn't be this high. Inventories are about 10% above the long-term average. Natural gas is 35% above. Demand was slow from China last year, rising only 0-3%, depending on whom you believe. The Saudi oil minister, Ali Niami, recently stated that the price of crude may have $30 per barrel in political risk premium built into the price. Lord Browne, CEO of BP, says that oil should be around $40, and may be at $25 a decade from now. I have no idea if that's correct or not, but I do know that the price is being driven by investment funds. The marginal buyer of oil are hedge funds, pension funds, mutual funds, etc. It is the market that is setting the price. And with spare capacity in OPEC and non-OPEC countries almost non-existant, there ain't a damn thing Chavez can do about it. If, and when, oil cracks, it will be because Bernanke has driven interest rates to 6% or 6.5%.

Second, Chavez's own actions as President make it more unlikely that he can do anything about it. Venezuela claims to be producing 3.3 million barrels of oil a day. Eveyone in OPEC lies. They do so because its rational to lie, as it is in every cartel. However, every other country lies on the downside, then sells excess their quota, as rational cartel-busters do. Venezuela lies on the upside. They produce closer to to 2.6mm boe a day. Chavez does so because he wants to give the impression that he is a competent steward of the nation's wealth - its hard to get re-elected if you are seen to be squandering it. Chavez has starved PDVSA on capital, and purged the oil company and installed his hacks several years ago. No problem, except that he has driven many technical people out of the company - and the country - and they simply cannot produce what they have in the past.

Which - third - makes it even more amusing when he talks about heavy oil, because PDVSA doesn't have the technical ability to refine it. He needs the multinationals. (And to be fair, the multinationals need Venezuela.) He can go on and on about having this or that many barrels of oil, but if he can't pull them out of the ground, they're worthless. This is why its so amusing when the Left fawns all over the guy, willing to swallow pretty much whatever he says. The article says he's "the driving force behind OPEC". That's laughable, but easily believed by the unwitting, the unknowing and the gullible who desperately want an anti-Bush hero. One of the reasons why he wants to benchmark the price of oil to $50 is because heavy crude in Venezuela is profitable at that price. Quota in OPEC is determined by probable reserves of conventional oil. Heavy oil is not conventional oil. If heavy oil is profitable, however, it bolsters Chavez's argument that he should get a larger allocation in OPEC. Not that that much matters anyways since they wouldn't be able to fulfill it. However, it would confer status on Chavez, and he would use it to project power. (The fact that people swallow this silliness - like the author of the article in the Progressive - is evidence of that.) But changing the definition of oil to fit reserve count wouldn't make Venezuela the largest holder of oil reserves in the world. Include tar sands and shale, and the largest holder of reserves in the world becomes (gasp) - the United States! (Or at least close to it.)

The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming...For potentially recoverable oil shale resources, we roughly derive an upper bound of 1.1 trillion barrels of oil and a lower bound of about 500 billion barrels...the midpoint in our estimate range, 800 billion barrels, is more than triple the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day.

http://rand.org/pubs/monographs/2005/RAND_MG414.pdf

Anyways, I could go on, but I'm getting hungry.

 

[Simpleton]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

He said, "I think it means that the government has the power to enact laws and the power to tell corporate interests to screw themselves." I followed up with this question: Does it say that government should put limits on corporate profits? He responded in the negative.

If he responded in the negative then what does he mean by saying corporations should screw themselves and their interests, what other interests other than profits do corporations have?

You're certainly a good friend of the Red Herring. I'll give you that much. You shift direction quite well with irrelevant logic.

You said that civil servants did not have the power to tell corporations what to do. I rebutted by saying that civil servants did indeed have the power to tell corporations what to do. I did not make any reference to Chavez or Bush. Instead, I made a direct reference to Stephen Harper. Who, by the way, was elected to power on the heels of public discontent about government corruption.

I apologize, ITN. I erringly assumed that you had some clue of what you were talking about. My mistake.

 

[Toro]

Re: Bush rejects $50 oil from Chavez, would drop gas by $1/g

One point of clarification. Civil servants can tell corporations what to do. Civil servants (aka: Stephen Harper) can introduce legislation and pass laws that make it a crime for corporations not to do what they're told.

Not to do what they are told? Do you like being told what to do? Corporations have limits just like people do, they can't do anything they want. They are taxed just like you are. Great thinking there.

You are going to limit corporate profits because a Socialist blowhole in Venezuela doesn't know the first thing about handling an economy? Gasp! 8O

I reread my post and searched for the part where I said that the government should limit corporate profits. I couldn't find it. I asked my brother to read my post and tell me where it says that the government should limit corporate profits. He couldn't find it either.

I called up a friend on the phone. I said, "I'm going to read something to you. Tell me what you think it means." I read the post to him, and I asked him for his interpretation. He said, "I think it means that the government has the power to enact laws and the power to tell corporate interests to screw themselves." I followed up with this question: Does it say that government should put limits on corporate profits? He responded in the negative.

I have one question for you, ITN: What the hell are you talking about?

You're spending too much time on this. :wink:

Governments can tell corporations what to do. But usually, government doesn't, or cannot, think through the secondary and tertiary effects, especially when it comes to pricing in any market.

Mexico is a perfect example of that.