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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (95)	10/23/2000 9:08:09 PM
From: quasar_1	Read Replies (1) \| Respond to of 74559

Bite the Bullet... Very good points excar. Refinery capacity in the US is not able to keep up with demand any longer due to several factors not the least of which is environmental issues. This is a major factor in end price levels right now. Not only did some refineries fail over the past couple of years, environmental regulations hamper the quick fix. I know I am in the minority when I say good. I hope oil stays high. I'm glad the environment is finally being considered in the true cost of energy usage. Without true cost basis, demand and supply must get out of balance. Without true cost basis we don't have an enlightened free market. This is the same effect the mortgage tax deduction has on the price of homes or insurance has on medical costs. It provides a temporary benefit with disastrous long term results. Part of the refinery/drilling problem is due directly to the oil companies themselves. They were loathe to invest when oil was in the low teens as they rightly should have been. But as oil rose they did not start to look forward. They had been burned so badly they were unwilling to take on new risk. They/we are paying for that decision now. As far as world reserves we are still swimming in oil. I am not worried in the slightest about ground assets. I favor true cost coming into the pricing of oil. I would keep oil highly taxed. I would use the taxes to build efficient mass transit systems and seed R&D development into fuel cell and hybrid energy technology, and improve telecommunications infrastructure (the new highways). I would eliminate many of the tax breaks the oil industry gets now to force true cost pricing. This would be very painful for awhile. But in time (5 to 10 years) the world would be far more efficient, far cleaner as far less dependent on unstable political cartels that can hold the world hostage at their whim. We can bite the bullet now or watch the bullets whiz over our children's heads later. I'll take short term pain with long term gain. I'll read the piece after MNF. Thanks for the post. Quasar