Thursday, April 28, 2005

The Economics of Oil

My economics post was delayed, but I offer it up now. I had my two last major graduate projects to handle Tuesday and Wednesday, but they are now behind me. So on to the economics of oil.

I have to speak to this topic because of some of the stupid things that have been said on the subject lately. Now I don't claim to be an expert on the oil industry, but I do have a pretty good understanding of economics and international trade. I give that disclaimer in case any of my statements do not apply as presented to the specifics of the oil of the industry. I imagine they do though.

1. Refineries aren't the issue. Saudi Arabia's spinmeister came out this week with the brilliant statement that shipping 10 or 20 million barrels of oil to the US wouldn't affect prices if we couldn't refine it. Sure, our refineries are old and need to be replaced or added to. I agree. But if that's the problem, how did those same refineries function two years ago when prices were half of what they are now? The problem is the price of oil per barrel, which is impacted by only two things- supply and demand. We know demand is higher. We know supply is not, at least not at a meaningful level. I think we can figure out the rest from there.

2. We need to stop burying our heads in the sand and start drilling it for oil. ANWR is not the answer, but it's a step in the right direction. The problem with ANWR is that the distribution infrastructure is not in place and will need to be developed for any drilling there to be profitable to the oil companies and beneficial to us. We need to be drilling the Gulf of Mexico. Lease Sale 181 opened some of the Gulf for oil leases, but the opened area was only 1/4 of the original size proposed by whom? That's right kids- the Clinton administration. Open up the Gulf for drilling. Distribution would be a dream and it's been estimated that the reserves under the Gulf are substantial. Environmentalists of course decry the "inevitable" oil slicks and pollution. Funny thing about oil slicks- they occur naturally as well due to seeping of oil and gas through natural fissures because of the pressure of the reserves. But we ignore that fact. We can't have it both ways, folks. We either have our happy environmentalists and our high oil prices (or expensive alternative fuels that are inefficient and underdeveloped at this point) or we have lower fuel prices and a stronger economy in which to develop alternative fuel sources. I'm not opposed to alternatives. I just realize that they'll take time and money to develop, and unless we do something about our current energy prices, we won't have much of either to work with.

That's my rant for the day. Back tomorrow.

Monday, April 25, 2005

Back from the Dead

Well, it's been a while. Graduate work snowed me under in the past several months, but the end is in sight. Two weeks from now I will have completed my program. Upon the recommendation of my best friend, I will begin requiring people to refer to me as "Master" until I decide to complete doctoral work. Why doesn't it work that way?

A lot to comment on and little time, but I'll begin with the new pope. This seems to be a great topic of interest and a divisive one, as should be expected when religion is involved. The Catholic Church has been getting some heat for instituting what is viewed as a "transitional" pope. However, I think they made a wise choice for several reasons.

First off, the church is in turmoil. There is a large divide between the traditionalist Catholics and the progressive Catholics. The progressives want standards changed and doctrine eased up, and the traditionalists want the church to take a stand against the relativism that is making headway into other religions. The next several years will be an important time in the church's internal debate and decision-making, and so it makes sense to put a leader in place who will not be there for several years and therefore possibly be required to change his stance on some of these issues. The change of leadership in a few years will provide a more natural transition in philosophy, if the church decides to become more progressive.

I also like picking a traditionalist pope. Until the church decides to move toward a more post-modern approach (if they ever do), they need to hold the line on doctrine. That being said, I hope they maintain the philosophy of upholding standards that they deem important. I do not agree with all of their doctrinal positions or beliefs, and I do not accept a large portion of Catholic doctrine. However, I respect the fact that they stand for absolute truth and have fought off the attempts from within the church to essentially make it easier to be Catholic. I believe that religion must be based on absolute truth for it to have any importance. Otherwise it's based on what I like today. What basis is that? Why bother following something that changes based on some whim or some cultural standard? The point of religion is to affect culture, not the other way around.

I don't think it should be easy to be Catholic, Buddhist, or anything else. I get annoyed with people who want to be called Catholic, Christian, Muslim, or whatever else but do not want to adhere to the core teachings of the religion or accept certain aspects of what they believe. If you want to form your own easier religion to follow, go ahead. Just don't expect true followers of the major religions to call you something you're not. Either get in or get out.

Enough for today. Regular postings resume as of now, so tomorrow will be economics and politics.