Tuesday, July 15, 2008

Another way Iraq is about oil

George Bush (who must be in a rush to start his holliers) at today's press conference --

And once you [an oil company] explore, your first exploratory, if you happen to find oil or gas, it is -- you'll find yourself in a position where a lot of capital is tied up. And it becomes in your interest, your economic interest, to continue to explore so as to reduce the capital costs of the project on a per-barrel basis.

So if you've spent a lot of money looking for oil, and find some, you have to look even more to find even more oil to make it worth while to have spent money in the first place.

He's never heard of sunk costs: that the past exploration money is gone and the only issue is whether it's a good decision from this point forward to keep exploring.

Which is pretty much why he'll never leave Iraq. He needs to spread the cost of the project out on a per-casualty basis.

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