Burnt Orange Report

How is the presence of the United States in Iraq linked to recent prike hikes in oil? I'm not neccesarily disputing your claim, I'm just curious. I was under the impression that Iraq's limited contributions to the world oil supply (oil for food and smuggling being the two exceptions) was relatively small.

I think the rise in oil prices is more accuratley attributed to supply problems outside Iraq. From Russia (with the yukos debacle) to Venezuela (with Chavez's regular bullshit) the world oil supply has not been as responsive as it has in the past. Moreover (and this isn't a direct factor) oil refining capacity has reached it maximum limits. Until capital in the form of more refineries appears, the cost of gas will increase at a rate proportionally higher than increases in the cost of oil. The financial times of london did a piece on this that I would recommend checking out.

As far as your suggestions pertaining to alternative energy go, I agree. Though I think green energy might be bullshit, there are some great options out there. Andrew Dobbs and I have discussed this at length.

good post.

The argument was on the basis that we have to provide our troops with oil and the consumption of it has led to hikes. Also the potential for problems to arise has led to concerns about the relations with oil rich countries. The article which i am referring to can be found on CNN and csmonitor.com. They also link just the general shortage that will be a factor in price hikes. Iraq's oil contributions are so small that it is a moot point.

The problem is public perception, supplying troops with necessary gas and oil, and the relations that are tense. Also, the government will probably cut spending on oil thus increase prices for consumers, because we are of course over spending due to the war on Iraq.

The global factors of shortage like Russia and Venezuela can also be a result. I focused mainly on the domestic factors, considering they do play a large part in the price hikes. I feel that the international problems with oil aren't as impacted as our decisions about oil are.

I would think green technology is bull too, but then looking at California and the Hoover Dam, there is empirical projects that have been successful for energy purposes. The clean coal I am a little uncertain about, but hydro technology, wind, solar, and hybrid cars have lead to some great movements for green energy.

Much better. I was too harsh in my tone last time, but I hope that it worked, as this piece is very well written.

Keep up the good work.

Welcome back, Katie! Great post!

it was better than last time but still somewhat juvenile.

Both Katie and Zach make excellent points. There's an additional reason for the high prices: increasing demand. It seems like the current prices are here to stay, at least for the medium term, not only because of the supply problems that Zach mentions, but because there's a worldwide increase in demand. Katie wrote about one of the factors that has caused this, but the United States is not the only country that is consuming more; it appears that this higher demand is coming from the Asian countries, specifically from China. Given that the Chinese economy hasn't shown signs of cooling down, they will continue to demand more oil. It is worth to mention that the oil market is not the only one that is suffering from this, other markets, as the steel one, are in the same condition.
Until production increases dramatically, and this doesn't seem possible in the short term, prices are going to continue to go up.
The negative effects over the American economy, caused by the almost permanent higher prices, should be enough to seek a new comprehensive policy. If you add up that ensuring energy independence is also a basic national security concern, then the lack of action from the administration or of real proposals from the Democrats is simply puzzling.