When is a fall in oil prices bad news?

Oil prices are falling today. But reason that they are falling is going to hurt your pocket book big time. This from a Bloomberg story….

Crude oil fell from a 10-month high in New York as a refinery shutdown in Kansas cut demand.

Coffeyville Resources LLC shut its refinery in Coffeyville, Kansas, yesterday because of flooding on the Verdigris River, according to as statement on its Web site. The 108,000-barrel-a- day refinery can produce about 2.1 million daily gallons of gasoline.

Crude demand should decline because of the shutdown, said Andy Lebow, a trader at Man Financial Inc. in New York. “That’s the motivating force in the market today,” Lebow said.

What do you think the price of gas is going to do now that 2.1 million gallons of production has been taken off of the market?

I am keeping my eye on R-Squared to see what Robert Rapier will have to say about the issue.

Edit: Mr. Rapier did respond in the comments section over at his blog. Apparently the refinery that was shut down is relatively small (who would have thunk that 2.1 million gallons of production per day was small?) and BP may be bringing some other refineries back on-line after having problems with them. So he does not seem to think that it is going to change the already tight gas situation much either way. He grants thought, that losses of any refinery capacity is small tragedy given that we want to get out of the supply hole we are in.

Good point…..

I read this post over at the EU Referendum and it made me think of this week’s essay of the week. In particular, this passage…

Another troubling thought comes from a long conversation I had with a serving RAF officer yesterday who affirmed what I had heard so many times before, on the structure and equipment of the armed forces. I got from him what I have heard so often elsewhere, that the Services cannot afford to focus on the current wars in Afghanistan and Iraq as that would leave them unprepared to fight future wars. The effort in our current theatres must, therefore, be tempered by the need to maintain balanced forces, capable of dealing with future (unknown) commitments.

I have likened this to a military planning committee deciding in 1943 to withhold forces from the invasion of Normandy and the defeat of Hitler for fear of being unprepared to fight a war in the 1950s.

The point that emerges here is that the military – no less than the nation in general (each for their own different reasons) – is not committed to the current wars. As we listened to the RAF commentator coo and gasp at the performance of the Eurofighter, delivering a torrent of propaganda in favour of the new “toy” as it went though its paces (admittedly impressive), one’s impression was somewhat reinforced that fighting wars in distant fields were regarded as an irrelevance at best, a distraction from the real business of constructing that mythical beast, the “balanced force”.

Frankly, if neither the military nor the population – to say nothing of the media and the political establishment – are committed to winning our current wars then (no matter how vital it is that we do win them) we have no business sending our troops there, some of them to die and many more to suffer horrific injuries. We might just as well bring them home to play with their “balanced” force and forget all about the untidiness and inconveniences of real fighting.

Significant amounts of money are going towards high tech weapons like the F-22 which is practically useless in the two wars that are currently being fought. In fact, it is hard to think of an opponent where the US would need the F-22.

China comes to mind of course, but could there really be a serious war between the US and China that did not go nuclear? In that case, the F-22 would be rather irrelevant wouldn’t it?

As the Chieftain of Seir argued in this essay, the focus on what worked well for US in the past is setting US up for military defeat.

Is Iran trying to acquire US captives?

From the Associated Press….

Iran is using the Lebanese Shiite militia Hezbollah as a “proxy” to arm Shiite militants in Iraq and Tehran’s Quds force had prior knowledge of a January attack in Karbala in which five Americans died, a U.S. general said Monday.

U.S. military spokesman Brig. Gen. Kevin J. Bergner said a senior Lebanese Hezbollah operative, Ali Mussa Dakdouk, was captured March 20 in southern Iraq. Bergner said Dakdouk served for 24 years in Hezbollah and was “working in Iraq as a surrogate for the Iranian Quds force.”

And what were they trying to accomplish in Iraq? This from CNN…

U.S. sources and Iraqi militia sources have said the carefully planned operation was meant to take captives who could be traded for five Iranians held by U.S. troops since a January 10 raid in Irbil, in northern Iraq. But the Karbala attack went awry, resulting in the deaths of the five Americans.
Qais Khazali, a onetime spokesman for anti-American cleric Muqtada al-Sadr’s Mehdi Army, was one of the men sought by American troops in connection with the attack. By the time of his March arrest, he had left the Mehdi Army and was leading one of the “special groups,” according to U.S. intelligence.

In searching for Khazali, U.S. and allied troops found computer documents detailing the planning, training and conduct of the failed kidnapping. And they found Daqduq, whom intelligence officials said has admitted working on behalf of Iran.

Contacted by CNN, a Hezbollah spokesman in Lebanon said he would not dignify the U.S. allegations with a response. And it remains unclear why Hezbollah’s leadership would risk sending advisers to Iraq: American intelligence officers suspect Hezbollah — which is indebted to Iran for decades of military and financial support — had no choice.

Iran seems to think that taking captives furthers its goals. In recent history they have taken both Israeli and British personal captive. If they want American captives, I would expect them to eventually be successful. One wonders if that would lead America to attack Iran with all the attendant problems that would bring.

(hat tip Defense Tech)

Essay of the Week: 7/1/07- 7/7/07

Those who read the Wall Street Journal will have already have general idea of what this week’s essay is about. But for those that don’t, a little explanation is in order.

The most severe shortage that the army currently faces is lower level officers. They more or less have enough grunts to meet their authorized strength and they have high level officers in spades. But lieutenants and captains are leaving the force at record levels. In part, this is because of the hardships of war. But an even bigger factor is frustration with upper level leadership.

In this essay, Lt. Col. Paul Yingling gives vent to those frustrations and the reception that this essay has been getting has rocked the military world. One general even went so far as to call all his subordinate officers together so that he could publicly rebut this essay.

Since this essay reflects the sentiments of a lot of junior officers currently serving in the military, I think that it is worth reading. But I would remind people that just because old guard is corrupt doesn’t mean that new crew has better ideas. Just think of the French and Russian revolutions.

Men can do more then you can imagine.

Mankind is capable of more then you can imagine. There was a time when nobody would have believed that man could make it too the moon. There are people today who can’t believe that men are capable of things likes this….

Later in the day, some of the soldiers from the unit I share a tent with, the C-52, told me that one of their Kit Carson scouts (comprised of some of our previous enemies who have turned on al Qaeda) had pointed out an al Qaeda who had cut off the heads of children. Soldiers from C-52 say that the Kit Carson scout freaked out and tried to hide when he spotted the man he identified as an al Qaeda operative. Just how (or if) the scout really knew the man had beheaded children was unknown to the soldiers of C-52, but they took the suspected al Qaeda to the police, who knew the man. C-52 soldiers told me the Iraqi police were inflamed, and that one policeman in particular was crazed with intent to kill the man who they said had the blood of Iraqi children on his hands. According to the story told to me on 30 June, it took almost 45 minutes for the C-52 soldiers to calm down the policeman who had drawn his pistol to execute the al Qaeda man. That same policeman nearly lost his mind when an American soldier then gave the al Qaeda man a drink of cold water.

The above is from Michael Yon’s latest post and he has pictures of some of the exhumed bodies from the graves if you can stand that sort of thing. Be warned, the pictures included one picture of a pile of rotting heads.

Sometimes the problem you get is not the problem you expect

News reports are pouring in regarding the recent riots in Iran. From the Houston Chronicles we read…..

TEHRAN, Iran — Iranians smashed shop windows and set fire to a dozen gas stations in the capital Wednesday, angered by the sudden start of a fuel rationing system that threatens to further increase the unpopularity of President Mahmoud Ahmadinejad.

Police were sent to guard some stations after the violence, and there was calm during the day as motorists lined up to fill their tanks under the new restrictions.

The government had been warning for weeks that rationing was coming, but the announcement of its start just three hours before the plan took effect at midnight Tuesday startled people and sent them rushing to get one last fill-up.

The rationing is part of a government attempt to reduce the $10 billion it spends each year to import fuel that is then sold to Iranian drivers at less than cost, to keep prices low.

What if everyone has been fearing he wrong problem. Maybe the real threat to world’s prosperity comes not from Iran’s nuclear weapons but from Iran’s complete collapse. Has anyone thought about what a collapse in Iran would look like?

Rant of the Week: 6/24/07-6/30/07

This week’s rant of the week is tangentially related to Michael Moore’s latest movie on the American health care system. Seeing as some of us here at The Ethereal Voice read widely in the field of economics commentators we could have chosen a more technical argument. But instead we have chosen the observations of an someone who has experience with both the French system and the system in the US. The simplicity of her observations are more effective then a long technical argument we think. But we must admit that we considered this post by Dr. Bob for rant of the week instead. One wonders, did we choose the right one to make rant of the week or did the late night get the better of us?