Sunday, August 28, 2005

If you're a liberal (and that's unlikely if you visit this site), you are probably wondering how the big oil companies got together and caused a hurricane over the weekend. As the news-savvy among us are aware, oil topped $70 per barrel this weekend because the Gulf of Mexico oil rigs have shut down in anticipation of the devestating hurricane Katrina. The increasing oil costs are attributable to several factors influencing supply and demand, such as instability in the Middle East causing decreased supply and increasing Chinese affluence (and automobile use) increasing demand. When a natural disaster hits that significantly decreases supply, we feel the pain at the pump.

Likewise, when supply increases through increased production--for example, with oil drilling in the "prestine" Anwar preserve--prices are generally lower. In the same vein, success in Iraq would likely mean lower prices, as the Iraqis operating in their best interest would like to be like Kuwaitis: Rich.

In the long run, increased supply and decreased demand are both good for the country, and allow us a measure of economic independence. On the conservative side, we seek to increase production and use oil somewhat more efficiently than we have in the past. On the liberal side, they whine and complain about how oil companies are preventing the potato-powered car from coming on the market and about how Dick Cheney is teaming up with his oil buddies for, uhh, cheaper oil, blah, blah, blah.

Don't be surprised if the liberals blame Bush for the hurricane and create a conspiracy involving oil out of Katrina's arrival. It wouldn't be much stupider than their theories about war, oil production, and a host of other issues.
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