walkitout (walkitout) wrote,

Something to Worry About and Good News for Everyone but Shkreli

Beginning with the "something to worry about": Oklahoma has a lot of earthquakes, probably because they have wastewater reinjection wells (they suck stuff out of the ground and then pump some of it back in, keeping the money making part. The scale this is happening on is so vast it causes seismic activity). Fine, whatever, but they _also_ are the location for where all the oil is stored waiting for the price to go back up. That oil is stored in above ground tanks (really huge ones) in and around Cushing. There was this period of time during the fall in the price of oil when people started drawing graphs of How Full Is Cushing, to try to calculate when this last support for the price of oil would go away. Cushing is now Full, and then some. A big quake, like the New Madrid long ago, would have apocalyptic consequences if it affected Cushing.


Why is there so much oil stored there? Well, because we're making more oil than the world needs. Why are we making more oil than the world needs? That is a complicated geopolitical question. But the simple answer is that commodity producers tend to be persistent: they reliably overproduce until the bust is bad enough to force people out of production and then things adjust. Normally, OPEC or a similar organization would get everyone at the table and production would be reduced, dammit, to get the price back up, however, ISIS and Russia both fund their governments with oil production so they are _not_ going to cut back and it is in everyone else's interests to keep the amount of money they get per barrel absolutely as low as possible. So the overproduction is somewhat politically driven, in that political measures to reduce overproduction are de-motivated. (We are making too much oil so that it is cheap so as to put the squeeze on people we don't like. Basically. Where "we" is a diverse group of countries with wildly variant interests that happen to agree on this one point.) Anyway. Extra oil goes somewhere, and Cushing is basically the place where you can park oil, that isn't an aging tanker parked in the North Sea somewhere. The gods of the internet have not yet turned off "cushing oil storage" in images search at google, so you can get a sense of what the place looks like that way. (They may yet do so -- a lot of people are also worried about other kinds of risks at Cushing.)

Now for some good news! For everyone except Shkreli. He's the guy you love to hate for jacking the price on some obscure drugs, and can never remember his name. He has finally been arrested.


Couldn't happen to a more deserving person!

I apologize for the lack of juicy zoning stories. Maybe I'll find some later today.
Tags: economics
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