Msdi Refineries

Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

***Refineries DA*** **1NC** ***Refineries DA***.....................................................................................................................................................1 Refineries 1NC-1/2.........................................................................................................................................................2 Refineries 1NC-2/2.........................................................................................................................................................3 Uniqueness-Refineries Increasing...................................................................................................................................4 Uniqueness-Econ High...................................................................................................................................................5 Uniqueness-Refineries Decreasing.................................................................................................................................6 Uniqueness-Econ Low....................................................................................................................................................7 Uniqueness-Econ Low....................................................................................................................................................8 Uniqueness-Econ Low....................................................................................................................................................9 Link debate-Regs don’t hut refineries...........................................................................................................................10 “Any claims that environmental regulations at oil refineries are to blame for recent gas price spikes should fall upon deaf ears – the two are not related,” Lieberman said. “They are known costs of doing business, and any well-run business would have accounted for these costs in their plans long before it would have to spike gas prices or run short of production.” Lieberman cited two recent case studies by Boston University and Pace University that show environmental regulations do not have any negative impact on oil refineries’ profits that would cause them to need to raise gas prices. “The bottom line is that the rise in oil and gas prices is indeed a serious problem for my constituents and for our nation and deserves investigation and a solution. But, to make the unsupported conclusion that the prices are somehow caused by environmental regulations, while ignoring the more obvious causes and effects, is not a productive way to reduce prices. It is merely a convenient way to use a very real and immediate problem to chip away at environmental protections designed to protect our health and environment.” .....................10 I/L Debate-Refinery expansion doesn’t solve oil..........................................................................................................11 Impact Debate...............................................................................................................................................................12 AT-Shock now...............................................................................................................................................................13 AT-Price increases inevitable........................................................................................................................................14 AT-Price collapse inevitable..........................................................................................................................................15

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Refineries 1NC-1/2 A. High oil prices have allowed oil companies to pour tons of money into refineries-they are at their highest operating levels in 20 years. Michael A. Fletcher, (Staff writer), June 23, 2008, “Houston’s Pipelines of Prosperity,” Online, http://www.washingtonpost.com/wp-dyn/content/article/2008/06/22/AR2008062202084.html?hpid=topnews, Washington Post, accessed 6/28/08. Soaring oil and gas prices may be a fiscal drag for much of the nation, but here in the self-styled energy capital of the world they are feeding an economic surge. In nearby Texas City, dozens of contractors' trailers are lined up outside

the gates of massive oil refineries and petrochemical plants, evidence of the billions of dollars in upgrades going on inside. Machine shops have more work than they can handle. And students from the local community college are being snapped up for $30-an-hour plant operator jobs, sometimes before they complete their two-year training programs, part of an intensifying scramble for qualified workers. Employment in the Houston area has grown 2.8 percent in the past year, the highest rate among the nation's 39 largest metropolitan areas and more than nine times the national rate. Area building permits are up, along with the amount of cargo moving through local ports. More than 1,800 oil and gas rigs, many of them belonging to the vast energy companies headquartered here, are in operation across the country, the highest number since the mid-1980s.

B. Climate change initiatives that ration energy, like the plan, will kill refiners and their expansion. Oil Daily, 3-24-2004 Refiners face a host of challenges ahead of them, from increased government regulations on the fuels they produce, to a new, highly complex marketplace beset by extreme volatility into which they must sell their products. However, the biggest near-term threat facing the sector may be the return to the Senate floor this spring of a climate change bill sponsored by Senate Commerce Committee Chairman John McCain (R-Ariz.) and Sen. Joe Lieberman (D-Conn.), according to Gary Heminger, president of Marathon Ashland Petroleum, the US' fifth largest refiner. Addressing members of the National Petrochemical and Refiners Association (NPRA) in San Antonio Tuesday, Heminger said the McCain-Lieberman bill, known as the "Climate Stewardship Act" threatens to reduce refinery sales, increase consumer prices for refined products, and cut jobs in the US. "It would ration energy. It would be the equivalent to a massive new tax for consumers," Heminger said. "When you ration energy, you lose

jobs and make us less competitive."

C. A failure to expand capacity will cause multiple scenarios for severe price shocks and volatility. Analyst Wire, 6-21-2004 Thanks to strong demand for gasoline, profits are rising for U.S. oil refiners. But costs are rising as well. The industry is currently adding equipment that will reduce sulfur emissions as required by the Clean Air Act. The cost: $ 8 billion. This Citgo refinery outside of Chicago has already spent $ 200 million to meet the mandate and will spend another $ 20 million over the next few years. The plant s general manager wishes he could have spent that money increasing capacity to meet the scorching demand for gasoline. MARK SMITH, REFINERY GENERAL MGR., CITGO PETROLEUM: If we were able to use those monies to increase throughput, those are the sorts of things that we could do otherwise with the capital. But again, it’s a regulated environment and we spend the money where we have to, obviously. EASTABROOK: U.S. refiners blame decades of tougher environmental regulations for creating what they call a serious capacity crunch. In 1980 there were 325 refineries nationwide. Today there are fewer than half that number.

Many plants have been mothballed because upgrading them to meet tighter government standards would have been too expensive. Refiners have compensated for the lost plants by expanding some existing ones. But they say those refineries are straining to meet consumers growing demand for gasoline. BOB SLAUGHTER, PRES., NATL. PETROCHEMICAL & REFINERS ASSN.: We re in a situation where the U.S. refining capacity has declined by 10 percent over the last 20 years while the U.S. demand for petroleum products has increased by over 20 percent. Obviously that s a trend that can t continue. And the answer is we need more refining capacity. EASTABROOK: Refiners also argue the U.S. infrastructure is so stretched right now that any sort of disruption could potentially cause shortages and price spikes. Just a few years ago a fire broke out at this Citgo plant, crippling it for nine months. And during that time its output was cut in half. Building new refineries would help ease the current crunch. But analysts estimate it would take 10 years and about a billion dollars to build one new plant. They say that s an investment most refiners won t make. SEAN SEXTON, ENERGY ANALYST, FITCH RATINGS: It s really a fine line between their return on capital and how much capacity is in the industry. And I don t think you ll see many companies investing in growth projects to increase capacity unless they re confident there s really going to be a really consistent demand for that increased capacity going forward. EASTABROOK: Sexton says

if domestic refiners don t expand capacity and demand keeps growing, the U.S. may have to get more gasoline from foreign refiners. And that could make gas prices even more volatile than they already are.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Refineries 1NC-2/2 D. Price shocks kill the economy-while prices may be high now, drastic shocks will cause a collapse. The Guardian, 5-3-2004 However, oil prices last week rose to a three and a half year high of $ 34.78 a barrel for benchmark Brent crude and won't have to rise much further to hit their highest since the first Iraq war in 1991. US gasoline prices are at an all-time high, above $ 2 a gallon. "Oil really does matter and oil prices have been the best predictor of recessions in the past 50 years. We are now getting into danger territory again," says Professor Andrew Oswald at Warwick University. Modern economies, he argues, are transport and

distribution economies and are hugely dependent on black gold to keep them rolling. A sharp rise in oil prices, apart from hitting the profits of firms which are big energy consumers, also takes money straight out of consumers' pockets, particularly in the US, where gas prices swing more sharply than in Britain because fuel taxes are low. "And don't forget China. There is a massive rise in car driving going on there and that means a big increase in world oil demand." Markets have been spooked by fighting in Iraq and growing unrest in Saudi Arabia, the world's biggest oil producer, as well as a lack of refining capacity in the US. So economic policymakers have also begun to fret, saying that oil prices are now a "downside risk" to the world economy, alongside the US current account deficit and slow eurozone growth. The oil price shocks of 1973 and 1979, when

prices more than quadrupled, were directly related to events in the Middle East and western economies were walloped by inflation and deep recession.

E. Extinction T.E. Bearden (LTC U.S. Army (ret) Director of Association of Distinguished American Scientists and Fellow Emeritus, Alpha Foundation’s Institute for Advanced Study) 2000 “The Unnecessary Energy Crisis: How to Solve It Quickly”, 6-24-2k, http://www.seaspower.com/EnergyCrisis-Bearden.htm History bears out that desperate nations take desperate

actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China, whose long-range nuclear missiles (some) can reach the United States, attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress conditions, once a few nukes are

launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself . The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Uniqueness-Refineries Increasing Oil companies are dumping billions into the refining industry. Michael A. Fletcher, (Staff writer), June 23, 2008, “Houston’s Pipelines of Prosperity,” Online, http://www.washingtonpost.com/wp-dyn/content/article/2008/06/22/AR2008062202084.html?hpid=topnews, Washington Post, accessed 6/28/08. Jimmy Hayley, chief executive of the Texas City-La Marque Chamber of Commerce, has a similar view. Just three years ago, things hit

a major snag as hurricanes Rita and Katrina damaged oil platforms in the Gulf of Mexico. Also, a 2005 explosion at the huge BP refinery in Texas City killed 15 people and injured 180, making it the nation's worst industrial accident in more than a decade. But since then, oil and gas prices have soared, and the oil and petrochemical companies have spent billions to upgrade their plants and restore their drilling platforms.

High oil prices are stimulating growth in local energy markets. Michael A. Fletcher, (Staff writer), June 23, 2008, “Houston’s Pipelines of Prosperity,” Online, http://www.washingtonpost.com/wp-dyn/content/article/2008/06/22/AR2008062202084.html?hpid=topnews, Washington Post, accessed 6/28/08. Despite the worries, high energy prices seem to be good for business, at least for now. The many exploration and

engineering firms headquartered here have seen a surge in business, as high prices make deep-water drilling and other more expensive forms of exploration and extraction economically feasible. Local energy consultants are cutting deals across the globe to sell their expertise in assessing the potential of natural gas and oil reserves. The number of jobs in Houston tied to energy exploration has increased more than 15 percent in the past two years, according to the Institute for Regional Forecasting. Work on alternative energy sources, including wind and solar, also has increased.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Uniqueness-Econ High The economy is rebounding-consumer spending is on the rise and the outlook is positive. Rebate checks ensure that growth will continue. Bob Willis, June 29, 2008, “Payrolls probably fell, Factories Slowed: U.S. Economy Preview,” Bloomberg, Online, http://www.bloomberg.com/apps/news?pid=20601087&sid=aykUcWGnPYpg&refer=home, accessed 6/29/08. The economy grew at a 1 percent pace in the first quarter, following a 0.6 percent gain in the final three months of 2007, making for the weakest six months of growth in five years. The outlook this quarter improved last week after the Commerce

Department reported consumer spending rose more than forecast in May. Americans used the money from tax rebates to buy furniture, clothes and electronics after filling their autos' gas tanks. About $48.1 billion in rebate checks were distributed in May and a total of $78.3 billion went out through June 27, according to figures from the Treasury Department. Almost all of the tax rebates will be sent out by the second week of July.

The economy is showing signs of recovery-growth in unexpected sectors and rebate checks are pushing the economy upward. Kevin G. Hall, June 29, 2008, “Bust, boom or treading water? What’s up with the economy/” Kansas City Star, Online, http://www.kansascity.com/438/story/684260.html, accessed 6/29/08. Lots of it, according to Paulsen, who's more upbeat than most analysts. He points to a

large number of indicators that have been better than expected, including retail sales, consumption, capital spending and foreign trade. "I think the economy is showing signs of bottoming. It's turned the corner," Paulsen said. "If oil would go back to the $120s, do you realize how good everything would look? If we didn't have this oil spike in the last couple of months, I wonder where we'd be now. I think the negatives are still there, but they're lessening in intensity." Q. What about those stimulus checks? Are they helping? A. The one-time tax rebates seem to be providing a boost. Many economists now think that second-quarter growth could be 1.5 percent to 2 percent, in part thanks to the stimulus checks washing through the economy.

Surprise moves by other countries are solving inflation. Emily Kaiser, June 29, 2008, “Federal Reserve gets help from abroad on holding down interest rates,” International Herald Tribune, Online, http://www.iht.com/articles/2008/06/29/business/econ30.php, accessed 6/29/08.

Thanks to the European Central Bank and its counterparts in Mexico and India, the U.S. Federal Reserve may have found a way to delay raising interest rates. In a perfect world, the Fed chairman, Ben Bernanke, would sit back and watch to see how the limping U.S. economy responds to a series of rate cuts that started last September and the nearly $110 billion in tax rebates going out to consumers. Instead, inflation at home and abroad has forced him to at least talk about raising borrowing costs, and investors widely expect him to back up his words with action before year-end. But surprise rate increases from Mexico and India, along with an

ECB meeting on Thursday that is likely to bring modest tightening, may start to sap the global liquidity glut that has fueled inflation - and do at least some of the Fed's dirty work.

The economy is recovering-we are taking the right steps to solve our problems. Thomson Financial News, June 18, 2008, “Treasury’s Paulson repeats strength of US economy will be reflected in dollar,” Forbes, Online, http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/18/afx5131038.html, accessed 6/29/08.

US Treasury Secretary Henry Paulson today repeated that he believes the US is taking the right steps to improve its economic situation in light of the ongoing housing and credit crisis, and said the value of the dollar will ultimately reflect the soundness of the overall US economy. Speaking after the conclusion of the US-China Strategic Economic Dialogue (SED), Paulson said the US tends to lead the way in terms of addressing market shortcomings, 'and I think that's going to be reflected in our currency value.'

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Uniqueness-Refineries Decreasing No refineries are being built-green lobby pressure and regulatory burdens check expansion. Bob Roper, (banking and investment executive), June 22, 2008, “Backward Policies Behind $4 Gasoline,” redOrbit, Online, http://www.redorbit.com/news/business/1445319/backward_policies_behind_4_gasoline/, accessed 6/28/08.

Thanks to green pressure groups, no oil refineries have been built since 1976 and all refineries are stretched to the limit. Huge regulatory burdens and the inevitable lawsuits from environmental groups make it cost prohibitive for a company to pursue building - or even expanding - an oil refinery.

Refining is slumping-inventories are at a low and refineries aren’t even at capacity. Brad Zigler, June 12, 2008, “Crude Report Stumps Analysts,” Seeking Alpha, Online, http://seekingalpha.com/article/81033-crudereport-stumps-analysts, accessed 6/28/08. U.S. oil refineries are still sluggishly

producing fuels, at least by industry analysts' expectations. In fact, refining activity seems to have actually slowed over the past two weeks. Yesterday's Energy Department oil inventories report indicated domestic refiners utilized only 88.6% of their productive capacity last week. Insiders had expected refining capacity to top 90%, a 0.3% increase over the previous week's rate. Crude oil stocks, which were expected to increase by 100,000 barrels this week, instead fell 4.6 million barrels. At 302.2 million barrels, oil inventories in the U.S. are below average for this time of year. For the week ending June 6, though, a quarterly backwardation of only 14 cents a barrel in the NYMEX term structure indicated oil's supply isn't considered all that tight by market participants.

Refineries haven’t been built in years, this trend won’t change. Laura Mandaro, (writer for Market Watch), June 2, 2008, “Pinched at pump, consumers warm to energy plants,” Market Watch, Online, http://www.marketwatch.com/news/story/consumers-warm-new-energy-plants/story.aspx?guid=%7BC08205F2-7426-4D7A-A140BE2E87D1FB95%7D&dist=msr_1, accessed 6/28/08. The change of heart could spell less opposition to coal and nuclear plants. But the building of new oil refineries, stalled for years, is likely to continue to face stiff opposition, said the survey by RBC Capital Markets. In a poll of 1,007 households, the investment bank found just 16% of Americans said they would oppose the construction of any type of energy plant or facility in their hometown, down from 23% in 2007. The investment bank conducted the survey May 17-23. Consumers mostly want alternative energy projects such as wind or solar facilities -- 71% were in favor of such construction, up from 58% last year. But respondents also showed more interest in traditional energy projects. Some 21% would support a nuclear power plant, up from 17% last year. Some 34% would support a clean coal technology plant, also higher than the 27% last year. The building of new oil refineries, shelved for at least a decade, is likely to continue to encounter heavy opposition, however. BP PLC (BP: 67.78, -0.17, -0.2%) (UK:BP: news, chart, profile) is still fighting a legal battle over a $3.8 billion planned expansion of a refinery in Whiting, Ind., just outside Chicago. Although a majority of Americans attribute the rapid rise in gas prices to a lack of oil refining capacity in this country, the survey found, eight of 10 Americans say they opposed the construction of an oil refinery in their hometown. By some measures, the last new refinery was constructed in 1976, though the U.S. Department of

Energy tracks two small refineries built in the early 1990s. Refinery capacity has continued to edge up, though not as fast as demand.

Companies aren’t building new refineries-it hurts their bottom line. Eric Alterman (Senior fellow at the Center for American Progress, Distinguished Professor of English at Brooklyn College), and George Zornick (New York-based writer), June 26, 2008, “Think Again: Drilling Deep to Mislead on Oil Prices,” Center for American Progress, Online, http://www.americanprogress.org/issues/2008/06/drilling_deep.html, accessed 6/27/08. We lack the infrastructure to process the oil. Refineries are already so stretched that last

year, the United States had to import almost 150 million barrels of gasoline. The Wall Street Journal reported oil companies are not building new refineries because it would be bad for their bottom line. “Building a new refinery from scratch, Exxon believes, would be bad for long-term business.”

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Uniqueness-Econ Low The economy is down-multiple factors prove and this evidence is predictive of future growth. Bob Willis, June 29, 2008, “Payrolls probably fell, Factories Slowed: U.S. Economy Preview,” Bloomberg, Online, http://www.bloomberg.com/apps/news?pid=20601087&sid=aykUcWGnPYpg&refer=home, accessed 6/29/08. U.S. employers probably cut jobs in June for a sixth consecutive month, while manufacturing contracted at a faster pace, signaling the expansion is still at risk, economists said before reports this week. Payrolls shrank by 60,000 workers, according to the median estimate of economists surveyed by Bloomberg News before the Labor Department's report on July 3.

The unemployment rate may have fallen after jumping last month by the most in two decades. Mounting job losses, record gasoline prices and tumbling home values have crushed consumer confidence, raising concern that spending will retrench once the lift from the tax rebates fades. Businesses are also purchasing less equipment as fuel costs soar, prompting factories to scale back. ``Job growth is going to be non-existent for the next six months,'' Maria Fiorini Ramirez, president of MFR Inc. in New York, said in an interview with Bloomberg Television. ``The economy is sort of staggering along.''

The economy is in the tank and will remain that way for a while-the manufacturing sector proves. Bob Willis, June 29, 2008, “Payrolls probably fell, Factories Slowed: U.S. Economy Preview,” Bloomberg, Online, http://www.bloomberg.com/apps/news?pid=20601087&sid=aykUcWGnPYpg&refer=home, accessed 6/29/08. Manufacturing, which accounts for about 12 percent of the economy, probably shrank for a fifth month in June, the Institute for Supply Management's factory index may show on July 1. The gauge probably fell to 48.6 from 49.6 the prior month, according to economists polled. A reading less than 50 signals contraction. ``Tight credit conditions, the ongoing housing contraction, and

the rise in energy prices are likely to weigh on economic growth over the next few quarters,'' Federal Reserve policy makers said last week in announcing they were keeping the benchmark rate unchanged for the first time since August. Central bankers signaled inflation was an increasing threat. Oil prices that topped $142 a barrel last week are hammering manufacturers. Carmakers, with little relief in sight, are paring output or shifting production to more fuel-efficient vehicles. General Motors Corp. said last week it plans to reduce North American truck production by an additional 170,000 units, while adding 47,000 units of car and crossover output.

The economy isn’t rebounding-growth will slump soon and major sectors are at their lowest in nearly 3 decades. Bob Willis, June 29, 2008, “Payrolls probably fell, Factories Slowed: U.S. Economy Preview,” Bloomberg, Online, http://www.bloomberg.com/apps/news?pid=20601087&sid=aykUcWGnPYpg&refer=home, accessed 6/29/08.

Most economists predict the gains in spending won't last beyond the third quarter, as rising joblessness and the jump in fuel costs continue to hurt consumers. Sentiment among Americans fell in June to the lowest level since 1980, according to results of a Reuters/University of Michigan survey issued last week. Service industries, which range from homebuilders to mortgage lenders, retailers and restaurants, and account for almost 90 percent of the economy, probably expanded at a slower pace in June, economists forecast another report from the Institute for Supply Management will show. The group's non-manufacturing index, due July 3, fell to 51 in June from 51.7 the prior month, according to the survey median. A worsening slump in residential construction has contributed to the weakening. Commerce may report July 1 that construction spending fell 0.5 percent in May after a 0.4 percent decline the prior month, according to economists surveyed.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Uniqueness-Econ Low The economy is getting pounded-three reasons. Kevin G. Hall, June 29, 2008, “Bust, boom or treading water? What’s up with the economy/” Kansas City Star, Online, http://www.kansascity.com/438/story/684260.html, accessed 6/29/08.

Everywhere you turn, the news on the economy seems dire. Oil prices are through the roof, home prices are through the floor, the stock market's plunging, and the entire U.S. economy seems shaky. Here's a look at what's going on, why and when we'll know things are turning around. Q. What's hurting the U.S. economy now? A. There are three big drags on our economy: the slumping housing market, the sustained rise in oil prices and an increasingly fragile banking system. Combined, they're socking it to the economy.

Oil is crushing our economy and we haven’t seen the worst yet-we are headed for an inflationary spiral. Kevin G. Hall, June 29, 2008, “Bust, boom or treading water? What’s up with the economy/” Kansas City Star, Online, http://www.kansascity.com/438/story/684260.html, accessed 6/29/08. Q. How do high oil prices affect today's economy? A. Businesses spend more on oil and products derived from it, including plastics, packaging and transportation. Consumers spend more of their income on gasoline, leaving less for other

purchases, from restaurant meals to TVs. High oil prices boost inflation, the rise of prices across the economy. Businesses have resisted passing along all their rising energy costs to consumers, and oil's rise hasn't yet shown up in "core inflation," the measure that strips out volatile energy and food prices to show deeper trends. But the longer that oil stays high, the greater the chance of an inflationary spiral in which wages and prices chase each other upward. Most Americans don't blame falling home prices for high oil prices, but the two are related. "The weak housing market and banking system undermine the economy and thus the U.S. dollar," Zandi explained. In response to a weakening economy, the Federal Reserve lowered interest rates. That led to a weaker dollar. Since oil is traded in dollars, oil-producing nations demand more dollars for oil to make up for exchange-rate losses. "As long as they (oil prices) are north of $100 and rising, that's a problem. If they start falling in a consistent way back toward $100, I think you can assume the coast is clear," said Zandi. He thinks that another turning point will be when a prolonged strengthening of the dollar occurs against the euro, Europe's currency.

The economy is headed for a sustained period of stagflation and the Fed can’t do a thing to stop it. Kevin G. Hall, June 29, 2008, “Bust, boom or treading water? What’s up with the economy/” Kansas City Star, Online, http://www.kansascity.com/438/story/684260.html, accessed 6/29/08. A. The Fed learned the importance of squashing inflation

before it strangles the economy in the 1979-82 period, so a return to '70s-style double-digit inflation is highly improbable. But the U.S. economy could face stagflation weak growth with stubbornly high inflation - indefinitely. The Fed's primary tool to combat inflation is to raise interest rates to slow the economy. The economy's weak 1 percent growth rate in the first quarter of this year suggests that an increase in interest rates anytime soon could tip the economy into recession. Most economists think that the Fed will begin raising rates later this year, but the Fed seems to be betting for now that the current slowdown will keep inflation in check.

The banking crisis is devastating the economy. Kevin G. Hall, June 29, 2008, “Bust, boom or treading water? What’s up with the economy/” Kansas City Star, Online, http://www.kansascity.com/438/story/684260.html, accessed 6/29/08.

Problems in the banking sector began with the meltdown of sub-prime mortgages, given to the weakest borrowers. That led to a buyers' strike against every institution holding tainted sub-prime assets, with investors frowning on everything from shares of bank stocks to mortgage-backed securities sold as bonds. The financial sector is dragging down the broader stock market, much as tech stocks did when the "dot-com" bubble went bust in 2000-2001. The result is that banks have less money available to lend. Concerns are growing that credit card debt and car loans will go the way of mortgages and see rising delinquencies soon. Banks are socking away greater amounts of capital to offset possible future loan losses, so there's less money available for new loans - for cars, homes or businesses. That further slows the economy and a housing recovery.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Uniqueness-Econ Low The worst is yet to come-the economic slump will continue well into 2009. David R. Francis, June 29, 2008, “Expect U.S. Economic Woes to Linger Into 2009,” Christian Science Monitor, Online, http://www.csmonitor.com/2008/0630/p15s01-wmgn.html, accessed 6/29/08.

The financial troubles in the United States are far from over. The economic downturn, probably already a recession, could last deep into 2009, with rising unemployment and continuing business failures. That's the view of several economists. "This is not like credit crunches of the past," notes Washington consulting economist Harald Malmgren, in an e-mail from Tokyo. "What we are going through is a gradual, painful credit contraction, as lenders try to gather new capital and reduce their [loans]."

The economy is waterlogged-the Midwest floods are killing any hope for recovery. David Mercer, June 26, 2008, “Floods will cause ripple, not ruin, across US economy,” Forbes, Online, http://www.forbes.com/feeds/ap/2008/06/26/ap5158851.html, accessed 6/29/08.

Floodwaters receding into the Mississippi River and its tributaries will suck billions of dollars out of the Midwest's economy, though probably not as much as the 1993 flooding that devastated the region. The impact on U.S. economic growth is expected to be small, but it is difficult to make accurate estimates because water still stands over farm fields, roads and in many homes. Forecasts call for more rain across the region through at least Saturday. Federal and state agriculture officials say the real damage won't be known until after the fall harvest. A report due Monday from the Department of Agriculture should give the country its first glimpse of the damage to the corn and soybean crops. The Farm Bureau has pegged Iowa's agricultural losses alone at roughly $3

billion, while Indiana agricultural officials estimate the state's losses at $800 million. Experts say it's too soon to even estimate the losses in Illinois and Missouri, which are also big corn- and soybean-growing states. The effects of snagged barge and freight traffic, and insurance claims by water-logged homeowners and businesses, will likely add billions to the financial toll. All told, the natural disaster will deliver a serious but manageable blow to the U.S. economy, which is already beset by high food and energy prices, falling home prices and a tight credit market that is making people and businesses cautious about spending, economists said.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Link debate-Regs don’t hut refineries Environmental regulations don’t cause a collapse in refineries. James Pletcher Jr., (Herald-Standard business editor), June 29, 2008,“Editor dispels myths surrounding world oil woes,” HeraldStandard, Online, http://www.heraldstandard.com/site/news.cfm?newsid=19809839&BRD=2280&PAG=461&dept_id=468387&rfi=6, accessed 6/30/08. There is a myth that environmental and government regulations have hurt refinery development, Kaufmann said. "Oil refineries are very capital intensive and the only way to make money is to run them 24 hours a day, 365 days

a year. When demand dropped off in 1970s, a lot of companies closed refineries. They are reluctant to expand refinery capacity until they are sure that demand would be there. There really is little evidence that I can find that environmental regulations are responsible for a drop in refining capacity.''

Environmental regulations don’t strangle refineries-your arguments are mere excuses for health-hating businesses! Joe Lieberman News Release, May 12, 2004, “No evidence for claim that environmental regulations cause gas price spike, Lieberman says,” Online, http://lieberman.senate.gov/newsroom/release.cfm?id=221456, accessed 6/30/08.

“Any claims that environmental regulations at oil refineries are to blame for recent gas price spikes should fall upon deaf ears – the two are not related,” Lieberman said. “They are known costs of doing business, and any well-run business would have accounted for these costs in their plans long before it would have to spike gas prices or run short of production.” Lieberman cited two recent case studies by Boston University and Pace University that show environmental regulations do not have any negative impact on oil refineries’ profits that would cause them to need to raise gas prices. “The bottom line is that the rise in oil and gas prices is indeed a serious problem for my constituents and for our nation and deserves investigation and a solution. But, to make the unsupported conclusion that the prices are somehow caused by environmental regulations, while ignoring the more obvious causes and effects, is not a productive way to reduce prices. It is merely a convenient way to use a very real and immediate problem to chip away at environmental protections designed to protect our health and environment.”

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

I/L Debate-Refinery expansion doesn’t solve oil Refinery expansion won’t do a thing-refineries aren’t operating at capacity and there is a global decrease in production. NPR, June 30, 2008, “Do we need more oil refineries?” The Bryant Park Project, Online, http://www.npr.org/templates/story/story.php?storyId=91625440, accessed 6/30/08.

Would the construction of new refineries help to lower fuel prices? "It won't do a thing," says geologist Ken Deffeyes, author of Beyond Oil: The View from Hubbert's Peak. The problem, he says, is not a lack of refining capabilities but a shortage of crude oil to be refined. "Building more refineries won't make crude oil appear at the entry side of the refinery," says Deffeyes. Additionally, he notes that while the U.S. has not built a new refinery in decades, oil companies have added increased capabilities to existing refineries. "We haven't seen oil piling up on the dock waiting to go to the refineries," he notes. The focus, he says, should be on the lack of crude oil, and he says that problem won't go away. "If world oil production is not increasing — and in fact seems to be in the process of decreasing — you need fewer refineries, not more refineries," he says.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

Impact Debate There’s no impact-refineries have crashed in the past and I’m fairly certain there wasn’t a nuclear war. David Goldman, June 1, 2008, “An ill wind for gas prices…,” CNN Money, Online, http://www.kktv.com/news/headlines/19444209.html, accessed 6/28/08. Though slow-moving, weak tropical storms over the Gulf of

Mexico can halt oil drilling, powerful hurricanes that hit land can knock out refineries. That's because about 40% of U.S. refining capacity is located on the Gulf Coast, namely in oft-hit states like Texas and Louisiana. After Katrina and Rita, 30% of Gulf Coast refineries were shut down or operating with reductions.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

AT-Shock now Your uniqueness arguments are wrong-we aren’t in the midst of a shock, this is a steady supply side increase. James Pletcher Jr., (Herald-Standard business editor), June 29, 2008,“Editor dispels myths surrounding world oil woes,” HeraldStandard, Online, http://www.heraldstandard.com/site/news.cfm?newsid=19809839&BRD=2280&PAG=461&dept_id=468387&rfi=6, accessed 6/30/08. "Where are oil prices now? Crude oil is traded in New York Mercantile Exchange daily. There has been this very rapid increase in oil prices. Since about 2003, oil prices have run up fairly rapidly. There was a brief lull, but now they are back up again. Why are oil prices so high? Demand has gone up,'' Kaufmann said. This situation, he said, has occurred in the 30 developed countries belonging to the Organization for Economic Cooperation and Development (OECD). However, demand has also risen in non-OECD countries, including Mexico, China and Brazil. "We would be hard pressed to say there has been a sudden, rapid acceleration in oil demand in OECD or non-OECD countries. We are not looking at some kind of demand shock. It is a supply-side issue. Non-OPEC production has gone down in recent years, causing OPEC production to drop, so that even now, OPEC is barely back in terms of production as it was in early 1970s. As long as non-OPEC countries were able to push into the market, they were able to weaken OPEC's influence. Now OPEC is back in the driver's seat and it is responsible for the rise in prices since 2004,'' he said.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

AT-Price increases inevitable Price increases aren’t inevitable. James Pletcher Jr., (Herald-Standard business editor), June 29, 2008,“Editor dispels myths surrounding world oil woes,” HeraldStandard, Online, http://www.heraldstandard.com/site/news.cfm?newsid=19809839&BRD=2280&PAG=461&dept_id=468387&rfi=6, accessed 6/30/08. Where will prices go? "In the short term, I think there is some room for oil prices to come back down. The belief is

there is a significant speculative factor in oil prices. We would like to think that speculative bubble over time will burst and oil prices will come back down. But don't look for even $60 barrel oil anytime soon unless there is a real collapse in economic activity.

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Missouri State Debate Institute 2008-2009

Walters/Harris Lab Refineries

AT-Price collapse inevitable Oil prices won’t collapse-supply and demand will keep oil high James Pletcher Jr., (Herald-Standard business editor), June 29, 2008,“Editor dispels myths surrounding world oil woes,” HeraldStandard, Online, http://www.heraldstandard.com/site/news.cfm?newsid=19809839&BRD=2280&PAG=461&dept_id=468387&rfi=6, accessed 6/30/08. Oil prices, Kaufmann added, are not going to collapse. "There are real supply-and-demand fundamentals that will keep oil prices high. One of the reasons oil prices collapsed in the mid-1980s is there was a huge drop in demand. The world reduced its oil consumption by 2.5 million gallons a day by generating electricity with coal and shutting down refineries. "But, it's very hard to

replace oil that we use for transportation. Then there are the non-energy uses to make plastics, fertilizer and other feed stocks and these uses are very difficult to substitute. Reducing oil demand now as we did in 1980s will be a much more drawn-out process. "Demand is forecast to rise. In many regions outside OPEC, we have pretty much depleted the easily obtained oil. In the lower 48 states, oil production has been declining for about 35 years. In the North Sea, production has been declining, even though prices are skyrocketing. Production is going down, although prices are going up.''

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