How Bush is Allowing Big Oil to Rape Us

[BamaLefty]

Inflated Oil Prices: Your Tax Dollars at Work

http://biz.yahoo.com/seekingalpha/061001/17745_id.html?.v=1

Phil Davis submits: We are being ripped off on a scale that is biblical in scope! As I have maintained all summer, we are literally bursting at the seams with oil. The total amount of oil reserves in this country is over 10% higher than at any other point in history, and is approaching 20% over our historical average:

This abundance does not seem to stop prices from flying up and we want to know why:

In my never ending quest for facts, I am never afraid to go to the source, get the other point of view, whatever it takes to make a fair assessment of a situation, and my investigation into the facts on the relationship of the Strategic Petroleum Reserve and the price of oil is... that this government is being run by thieves!

This is just my humble opinion of course, but feel free to judge for yourself.

The facts were far worse than my initial estimates when I first mentioned it on Tuesday, as I have long blamed the SPR as a side factor in adding to the price of oil but President Clinton reminded me that I should trust nothing this administration tells us so I went deep into the archives for this report.

As we know, Clinton/Gore had used the SPR as it was originally intended -- as a buffer in times of crisis. Where they differed from Bush is that they saw high oil prices ($30 at the time) as a crisis, and used the SPR as a way to assure reasonable prices for American consumers.

After all, as any squirrel can tell you, you store nuts when they are plentiful during the summer so you can eat them during the winter (see Clinton's remarks) at bottom. To spend all your summer gathering nuts only to let yourself starve while your home is filled to the brim is not exactly Darwin's idea of a successful survival strategy. Of course, this administration rejects Darwin on many levels!

Oil was so plentiful back in 1999 when it was selling for $14 a barrel that OPEC was forced to make 4.2M barrels in production cuts. That, coupled with a rapidly recovering economy, drove prices back to the 1990s average of $20 a barrel.

An exceptionally cold winter caught refiners by surprise but it was speculators, including Enron that took control of the markets and created false shortages over the summer of 2000 (although this was not known at the time), along with investors piling into the market as it looked as though Gore would lose the election.

Oil plunged back down in the fall as Clinton used the SPR to reduce prices. Oil was down to $25 in November (-30%) when Gore won the election, but recovered back to over $30 when the Supreme Court gave the Presidency to Bush anyway. With plenty of oil still on the market, prices languished in the $25-30 range until 9/11, when the unintended consequence of the attack on America resulted in no decrease in supply coupled with disrupted demand, which drove oil back under $20.

What's a responsible oil man to do?

There are two things you can count on to increase prices, higher demand and lower supplies. One thing that always does both quite nicely is war, as those armored vehicles and battleships tend to be quite the gas-guzzlers! Well you can't have much of a war against a guy who lives in a cave so, with oil at $25 for most of 2002 (after cleaning out Afghanistan in just 5 months), we turned our attention on Iraq.

What if the anti-Bush media has it wrong? What if the war in Iraq wasn't about getting our hands on Iraqi oil but rather, on getting it out of the hands of a man who was willing to sell it? Iraq has (had) the lowest production costs in the world, and Saddam was a frequent OPEC cheat -- selling as much a 400,000Bpd on the black market, outside of allowable quotas.

Who on Earth could possibly have a motive to knock out Iraq's oil supply and drive global energy prices through the roof?

Interestingly, this is another scathing indictment of the administration that has been wiped from web (salvaged by Google's Cache files).

Gosh, with all these things going on to distract the American people, what could the President have had time to focus on? Funny you should ask:

After Bush-I set a precedent by successfully using the SPR to keep prices in-line in the aftermath of the first Gulf war (remember the oil fields were on fire!), Clinton used the SPR sparingly but effectively during his presidency and oil was cheaper for those 8 years than at any time since before 1973.

[spag68]

1. You left out the Enron effect.