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13 hours ago, vlov said:

This is assuming that 2 million barrels of Iranian oil is actually offline due to sanctions, which I have a very hard time believing to be the case. 

The idea that Iran oil is now "off-line" due to sanctions pressures from Trump et al is a bit silly.  The major Iranian oil field lies contiguous with a large Iraqi field, both have adjacent loading facilities, and the Shias in Iraq have a commonality with the Shias in Iran.  To think that there is not cross-loading going on is not realistic; of course there is. At this point the Iranians are just as skilled as the South Africans were back during the Apartheid days in the fine art of smuggling large quantities of oil.  the stuff is just too valuable, and the profits too tempting, to think that it is not going to end up traded on some black market.

The real question is:  how much oil is being sold by the Iranians in this black market, hidden from the US, and what is the price discount needed to make it happen? 

The indirect proof that Iranian oil is reaching Buyers can be found in the behavior of hedge-fund traders and speculators in the oil futures markets.  A staggering amount of cash flowed into futures contracts last Fall and pushed the price up, all in the idea that future prices would skyrocket once Trump's embargo really bit.  Well, that did not happen.  And right now, the hedge-fund cash is getting pulled out, causing a continuing downward drift in the futures contracts. That tells you that they recognize the reality: that the "sanctions" are good for politics, and to embarrass buyers, and possibly to push some refineries not to take it in  (mostly located in Korea, which is peculiarly sensitive to Washington due to the state of frozen war on the Peninsula).  You cannot seriously think that India is voluntarily abiding with some sanctions regime demanded by Washington.  Sure, they say they comply, and their paperwork says they do, but in reality that is Iranian oil showing up, albeit with "papers" that say it is from Iraq.  

Let's get real here: if Iran was really out of the game, oil futures would be way up there. They are not: Iran is in. 

 

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2 hours ago, Douglas Buckland said:

I am holding out for a resolution of the US/China trade war and a sharp jump in the global economy and the resulting demand increase. Fingers crossed...

Fingers crossed trump goes away, or admits defeat in a timely fashion? 

He has backed down from so many claims/threats now anything is possible.  He will lose, remove tariffs, and claim victory when the crap he started starts to resolve.  His fan base will rejoice in his lies.

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2 hours ago, Tom Kirkman said:

I remain optimistic for the oil industry.

Canada's federal elections are in October.

Whose oil industry?

The federal liberals are pro oil, trans mountain is now approved and paid for  - something the cons consistently failed to do.

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10 minutes ago, Enthalpic said:

Fingers crossed trump goes away, or admits defeat in a timely fashion? 

He has backed down from so many claims/threats now anything is possible.  He will lose, remove tariffs, and claim victory when the crap he started starts to resolve.  His fan base will rejoice in his lies.

I doubt he goes away for the next 5-1/2 years. He is doing, or attempting to do, exactly what he said in his campaign.

The average American can see that the House has done NOTHING in the past 3-1/2 years except try to obstruct Trump at every turn as he tried to implement the policies which got him elected. 

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8 hours ago, ronwagn said:

Sometimes I wonder if the government is funding shale oil somehow for geopolitical gain. 

Of course it is.

Yet the really big push is in natural gas.  The US is in a big political fight with the Russian Federation, basically Russia and Belarus.  Putin is selling gas at a huge markup, both to finance himself and to finance the New Russia, which he intends to be a close of the old USSR.  In order to get there, Putin has to destabilize the Border States, and to unnerve Western Europe, particularly Germany.  The USA, responsively, can undermine the purchases of Russian gas by bringing in ever greater volumes of US LNG by tanker. 

It is not as easy as it sounds.  First there is the need to build gas pipelines inside the USA, mostly from the Permian out to loading ports.  Their location in turn is scattered, being constructed from Houston area through Louisiana and all the way to the East Coast. Obviously, if you can load LNG in Baltimore Harbor then you are a lot closer, and thus faster, to Poland at Stettin, then if you load in Lake Charles, Louisiana.  And that implies that the limited number of LNG ships can make more trips per year, thus delivering a lot more gas. 

The other problem is that LNG ships are specialty builds; not every yard out there can go construct one.  They typically take about a year longer to construct than an oil tanker of equivalent size.  So orderbooks being filled today do not hit the launchways for some years, and this delay locks out the ability to really put the screws to Putin, and thus control the conduct of the Russian Federation. Why is this important?  Remember that Russia is busy expanding its Borders, a half-mile at a time.  Look over to the puppet State of "South Ossetia," where Putin simply invaded and grabbed off about 25% of the territory of the Republic of Georgia.  Putin does this in order to shut down the pro-Western government of Georgia, and to maintain a military foothold in countries around the Black Sea. The Russians go out to the "Border," constructed of razor-wire and armed goons with sub-machine guns, and simply move that wire another few hundred yards inside Georgia, thus grabbing off a bit more territory, when they feel like it.  Georgia itself is too weak to resist.  Today, the Russians have encroached that Southern Border of South Ossetia  (a "country" that nobody else recognizes, incidentally) to the point where they have grabbed off a chunk of land that sits over the Baku-Supsa pipeline.  Thus in theory, the Russians could dig down and shut off that pipeline, controlling oil export to Western Europe and putting the screws to the oil producers in Azerbaijan. 

The West could respond with large contingents of heavy tanks and troops into Georgia, relying on the foreboding Caucasus Mountains to provide a resistance point to Russian reinforcements into South Ossetia, except that the West has no stomach for that sort of direct confrontation. So instead the West, led by the US Deep State, is pushing a hefty increase in LNG shipment capacity into Eastern Europe, principally using Poland on the Baltic as the entry point.  How will all this play out?  Let's stick around and find out!

Edited by Jan van Eck
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29 minutes ago, Douglas Buckland said:

 

the House has done NOTHING in the past 3-1/2 years except try to obstruct Trump at every turn as he tried to implement the policies which got him elected. 

That is kind of their job - unless you are proposing something that is non-partisan.  He got elected with the same amount or fewer votes, and his support has been pretty low at times.  The "other" people deserve representation and flexion of their power.

For example: not paying for a dumb wall that he campaigned Mexico would pay for.

Edited by Enthalpic

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23 minutes ago, Enthalpic said:

That is kind of their job - unless you are proposing something that is non-partisan.  He got elected with the same amount or fewer votes, and his support has been pretty low at times.  The "other" people deserve representation and flexion of their power.

For example: not paying for a dumb wall that he campaigned Mexico would pay for.

No, their job is to go to work and create legislation that is beneficial to the American people!

As far as your comment about 'fewer votes', I can only assume that you do not understand the Electoral College and why it is in place.

Many American's want that 'dumb wall' or anything else that keeps out illegal aliens.

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10 hours ago, Wastral said:

Won't.  Maduro and his 'alternate' have same policies but only with a different face.

Venezuela is a direct and serious threat to the US Oil, why else is there so much interest in bringing the current government down, all the Geopolitical plays at present all make there way back to US oil and the over production of.

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1 hour ago, James Regan said:

Venezuela is a direct and serious threat to the US Oil, why else is there so much interest in bringing the current government down, all the Geopolitical plays at present all make there way back to US oil and the over production of.

Threat against US oil?  No.  Ven oil props up US oil as Ven is heavy oil and effectively only place to sell it is the USA.  It would displace Canadian oil... 

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13 hours ago, Jan van Eck said:

Of course it is.

Yet the really big push is in natural gas.  The US is in a big political fight with the Russian Federation, basically Russia and Belarus.  Putin is selling gas at a huge markup, both to finance himself and to finance the New Russia, which he intends to be a close of the old USSR.  In order to get there, Putin has to destabilize the Border States, and to unnerve Western Europe, particularly Germany.  The USA, responsively, can undermine the purchases of Russian gas by bringing in ever greater volumes of US LNG by tanker. 

It is not as easy as it sounds.  First there is the need to build gas pipelines inside the USA, mostly from the Permian out to loading ports.  Their location in turn is scattered, being constructed from Houston area through Louisiana and all the way to the East Coast. Obviously, if you can load LNG in Baltimore Harbor then you are a lot closer, and thus faster, to Poland at Stettin, then if you load in Lake Charles, Louisiana.  And that implies that the limited number of LNG ships can make more trips per year, thus delivering a lot more gas. 

The other problem is that LNG ships are specialty builds; not every yard out there can go construct one.  They typically take about a year longer to construct than an oil tanker of equivalent size.  So orderbooks being filled today do not hit the launchways for some years, and this delay locks out the ability to really put the screws to Putin, and thus control the conduct of the Russian Federation. Why is this important?  Remember that Russia is busy expanding its Borders, a half-mile at a time.  Look over to the puppet State of "South Ossetia," where Putin simply invaded and grabbed off about 25% of the territory of the Republic of Georgia.  Putin does this in order to shut down the pro-Western government of Georgia, and to maintain a military foothold in countries around the Black Sea. The Russians go out to the "Border," constructed of razor-wire and armed goons with sub-machine guns, and simply move that wire another few hundred yards inside Georgia, thus grabbing off a bit more territory, when they feel like it.  Georgia itself is too weak to resist.  Today, the Russians have encroached that Southern Border of South Ossetia  (a "country" that nobody else recognizes, incidentally) to the point where they have grabbed off a chunk of land that sits over the Baku-Supsa pipeline.  Thus in theory, the Russians could dig down and shut off that pipeline, controlling oil export to Western Europe and putting the screws to the oil producers in Azerbaijan. 

The West could respond with large contingents of heavy tanks and troops into Georgia, relying on the foreboding Caucasus Mountains to provide a resistance point to Russian reinforcements into South Ossetia, except that the West has no stomach for that sort of direct confrontation. So instead the West, led by the US Deep State, is pushing a hefty increase in LNG shipment capacity into Eastern Europe, principally using Poland on the Baltic as the entry point.  How will all this play out?  Let's stick around and find out!

Lets talk about some numbers especially breakeven price of various sources of gas

So US LNG needs 

Price about 3 $ per mbbtu - longterm  price of gas returning to 4 $ in next decade when low cost fields will be depleted 

15% standard Cheniere  premium - 0,5

Cost of gasiification =  3$

Cost of transport - 0,6$

Cost of regasification - 0,5 $

Cost of transport to LNG terminal- 0,5 $

So breakeven price is about 8 $ per mbbtu which means 285 $ per 1.000 m3.  In future 9,2 $  - 328 $ per 1.000 m3.

 

Breakeven for gas transported by NordStream is about 4 $ per mbbt = so it means you can sell it TWICE cheaper then US LNG breakeven price  with still some profits.

Gazprom  can produce gas below 1 $ per mbbtu - something about as low as  0,5-0,7 $ per mbbtu on low cost fields.

Pipe gas  is also always cheaper than LNG no doubt about that.

 

At the same time

Last weak Pakistan signed an agreement with Quatar - price is 13,37%  of Brent price - in second quater it means 9,2. $ per mbbtu

Poland pays Quatar 16 % of Brent plus 0,5 $ mbbtu - in second quater it means- 11,54 $ per mbbtu - 412 $ per 1.000 m3. Its the most expensive natural gas on european markets - I would like to remind about it when Im told of success of polish diversification from Gazprom.

 

So I suppose US LNG has better chances to compete with higer cost producers not Gazprom and Novatek

 

Edited by Tomasz
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On 7/24/2019 at 5:25 PM, Tomasz said:

So I suppose US LNG has better chances to compete with higer cost producers not Gazprom and Novatek

I would remind you that Russian gas could be given away at a sales price of Zero and it would still not be a bargain.  The reason is that if you continue to buy Russian gas, then you hand Russia a lever with which to strangle you any time they choose.  I appreciate that you do not see it that way, given that your family is ethnically Russian.  Unfortunately, Russia under Putin is not some benign neighbor, willing to be civilized and a reliable supplier of gas and oil.  Nope; those are weapons of war, to be used to cow and intimidate the buying States and populaces. 

Russia is rattling its neighbors.  Estonia is frightened out of its wits that Russia will invade and, at the least, swallow up the Eastern Third of the country.  So is Lithuania; same for Latvia.  Poland has long memories of the ugly murders of its people by the Russian Army, including Stalin's execution of some 16,000 officers of the surrendered Polish Army out in some forest, the men cut down by machine gun fire and the bodies tossed into long bulldozed trenches.   Does anybody seriously think the Russians are going to abstain from that in the future?  If you think so, then go have a talk with the managers of Malaysian Airlines. 

Russia has invaded Georgia, to teach the Georgians a lesson about getting cosy with the West.  Russia took over a central chunk and re-named it South Ossetia.  Then it took over the far Western chunk, where the Black Sea resorts are, and re-named it Abkhazia.  That remains a Russian puppet state today.  So some 25% of the land territory of Georgia has been stolen away by Russian troops, Cossacks, and Russian mercenaries.  This is not a picture that inspires confidence. 

Next up, you have the situation in Eastern Ukraine, a region known as the "Donbas."  It consists of two regions, the Luhansk and the Donesk, which together comprise the Donbas. Toss in the Crimean Peninsula and you have a large chunk of Ukrainian territory swallowed up by Putin's Russia.  Putin sent in his equivalent of the Special Forces, with their national and brigade markings stripped of the uniforms and ski masks over their faces, to seize the Crimea at gunpoint. The Donbas was taken by use of mercenaries, mostly the notorious Wagner Brigade, men recently discharged from the Russian Army who are unemployable, good only at killing.  They killed and looted their way across the Donbas, the rampage costing some 10,000 civilians their lives. Again, not something to inspire confidence. 

Russia is a dangerous country, with a depraved leader and a population that likes his aggressive posturing on the world stage. Nobody has confidence in Putin.  He is also a murderer on an individual level, ordering "hits" on public streets in England, for example right on London Bridge.  These murders again do not inspire confidence. 

Thus, self-preservation means you have to develop alternate source of gas to displace the Russian stuff.  There is no sense or point in buying from Russia the gas for which money the Russian State will invade you, shoot you dead, or imprison you. It does not matter if US gas, or Qatari gas, is more expensive.  You cannot go buy Russian gas, not and stay alive.  So:  what price glory?

Edited by Jan van Eck
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14 hours ago, Douglas Buckland said:

No, their job is to go to work and create legislation that is beneficial to the American people!

As far as your comment about 'fewer votes', I can only assume that you do not understand the Electoral College and why it is in place.

Many American's want that 'dumb wall' or anything else that keeps out illegal aliens.

Or alternatively prevent legislation that hurts the American people.  Depends on your viewpoint; obviously not everyone agrees with trump.

I understand the Electoral College, but am not a big fan of it.  I personally prefer proportional representation over first-past-the-post systems. I also don't like two party systems but I digress.

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2 minutes ago, Enthalpic said:

I understand the Electoral College, but am not a big fan of it.  I personally prefer proportional representation over first-past-the-post systems. I also don't like two party systems but I digress.

For a Canadian living in Canada, you seem to feel no restraints on telling Americans how to run things inside the USA!  Now, that is impressive. 

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2 minutes ago, Jan van Eck said:

For a Canadian living in Canada, you seem to feel no restraints on telling Americans how to run things inside the USA!  Now, that is impressive. 

It's only fair, the USA does it to the rest of the world. :)

I don't like Canada's first-past-the-post system either.  J.T. was supposed to change that but bailed on his campaign promise. 

It's fun, carry on.

Edited by Enthalpic

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3 hours ago, Enthalpic said:

Or alternatively prevent legislation that hurts the American people.  Depends on your viewpoint; obviously not everyone agrees with trump.

I understand the Electoral College, but am not a big fan of it.  I personally prefer proportional representation over first-past-the-post systems. I also don't like two party systems but I digress.

Name one piece of legislation that the House has voted on that has benefited the country, as a whole, in the past three years? 

The House forced the Meuller investigation, didn't like the result, so yesterday forced Mueller in front of two committees to defend his report! This is childish (and expensive to the American taxpayer) in the extreme! 

The Electoral College was put in place so that the rest of the country would not be handcuffed to the will and desires of the states with the densest populations. So the vote of a guy farming 1000 acres of corn in Nebraska is just as valuable as a banker in New York or an LGBTXXX activist in California.

Unless you feel that California and New York should continually lead America and the other 48 states should be muzzled, how can you disagree with this system?

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19 hours ago, Jan van Eck said:

Of course it is.

Yet the really big push is in natural gas.  The US is in a big political fight with the Russian Federation, basically Russia and Belarus.  Putin is selling gas at a huge markup, both to finance himself and to finance the New Russia, which he intends to be a close of the old USSR.  In order to get there, Putin has to destabilize the Border States, and to unnerve Western Europe, particularly Germany.  The USA, responsively, can undermine the purchases of Russian gas by bringing in ever greater volumes of US LNG by tanker. 

It is not as easy as it sounds.  First there is the need to build gas pipelines inside the USA, mostly from the Permian out to loading ports.  Their location in turn is scattered, being constructed from Houston area through Louisiana and all the way to the East Coast. Obviously, if you can load LNG in Baltimore Harbor then you are a lot closer, and thus faster, to Poland at Stettin, then if you load in Lake Charles, Louisiana.  And that implies that the limited number of LNG ships can make more trips per year, thus delivering a lot more gas. 

The other problem is that LNG ships are specialty builds; not every yard out there can go construct one.  They typically take about a year longer to construct than an oil tanker of equivalent size.  So orderbooks being filled today do not hit the launchways for some years, and this delay locks out the ability to really put the screws to Putin, and thus control the conduct of the Russian Federation. Why is this important?  Remember that Russia is busy expanding its Borders, a half-mile at a time.  Look over to the puppet State of "South Ossetia," where Putin simply invaded and grabbed off about 25% of the territory of the Republic of Georgia.  Putin does this in order to shut down the pro-Western government of Georgia, and to maintain a military foothold in countries around the Black Sea. The Russians go out to the "Border," constructed of razor-wire and armed goons with sub-machine guns, and simply move that wire another few hundred yards inside Georgia, thus grabbing off a bit more territory, when they feel like it.  Georgia itself is too weak to resist.  Today, the Russians have encroached that Southern Border of South Ossetia  (a "country" that nobody else recognizes, incidentally) to the point where they have grabbed off a chunk of land that sits over the Baku-Supsa pipeline.  Thus in theory, the Russians could dig down and shut off that pipeline, controlling oil export to Western Europe and putting the screws to the oil producers in Azerbaijan. 

The West could respond with large contingents of heavy tanks and troops into Georgia, relying on the foreboding Caucasus Mountains to provide a resistance point to Russian reinforcements into South Ossetia, except that the West has no stomach for that sort of direct confrontation. So instead the West, led by the US Deep State, is pushing a hefty increase in LNG shipment capacity into Eastern Europe, principally using Poland on the Baltic as the entry point.  How will all this play out?  Let's stick around and find out!

Great information Jan. I do think there are plenty of workarounds for shipping LNG though. Modular systems with individual tanks could be used. I admit they may not be economical for the scale needed. 

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21 hours ago, Wastral said:

Won't.  Maduro and his 'alternate' have same policies but only with a different face.

Yes, he is a socialist lite. 

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On 7/23/2019 at 9:57 PM, Old-Ruffneck said:

Uh, Ron......the guy is "dug in like and Alabama tick". Unless the US goes there (highly unlikely) I think Maduro is going to be the acting Leader as all his army is still behind him. So no think Oil from Venezuela anytime soon.

As long as they don't produce in Venezuela we are all good. The problem is that the Venezuelan people allowed their beautiful country to be destroyed by socialism. The same ideology that is now taking over the Democratic Party  IMHO. 

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51 minutes ago, Douglas Buckland said:

So the vote of a guy farming 1000 acres of corn in Nebraska is just as valuable as a banker in New York or an LGBTXXX activist in California.

Unless you feel that California and New York should continually lead America and the other 48 states should be muzzled, how can you disagree with this system?

The farmers vote is currently worth Way more than the others - how is that fair?  One man (who will be further replaced with automated machinery) should not have massive vote power.

One-person-one-vote true democracy Cali and NY rule for sure. 

I will accept that there should be some balance between population representation and geographic representation. Heck, I live in Alberta Canada that suffers some of the same fate of the flyovers (we have Toronto and Vancouver).

 

Edited by Enthalpic

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23 hours ago, Douglas Buckland said:

I am holding out for a resolution of the US/China trade war and a sharp jump in the global economy and the resulting demand increase. Fingers crossed...

I am hoping for a trade war with China. I think we will benefit in the long run. The Chinese Government is worse than the USSR. 

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3 minutes ago, Enthalpic said:

The farmers vote is currently worth Way more than the others - how is that fair?  One man (who will be further replaced with automated machinery) should not have massive vote power.

One-person-one-vote true democracy Cali and NY rule for sure. 

I will accept that there should be some balance between population representation and geographic representation. Heck, I live in Alberta Canada that suffers some of the same fate of the flyovers (we have Toronto and Vancouver).

 

Explain to me just how the farmer's vote is worth way more than the others? 

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2 minutes ago, ronwagn said:

As long as they don't produce in Venezuela we are all good. The problem is that the Venezuelan people allowed their beautiful country to be destroyed by socialism. The same ideology that is now taking over the Democratic Party  IMHO. 

I would take issue with that, Ron.  First up, it is not in the US interest for ordinary Venezuelans to be suffering in abject poverty, with foodstuffs so rationed that the typical Venezuelan has lost 20 lbs. of body weight in the last year. It is not in the interests of anyone that Venezuelan hospitals have no money to pay the staff, have no electricity, have no supplies, cannot wash the sheets, and if you need the use of a syringe for anything, you have to bring your own, go source it from the black market.  Millions flee and become refugees, to live in tent cities on the borders.  Children go without, no food no clothing, no schools.  This is not helpful. 

Maduro has to go, he can be hung by his heels and executed, fine by me; and the US needs to go back to buying their heavy oil, both to re-establish trade and provide an income to that country, and to have a source for heavy oil for US refineries.  Personally I favor US invasion, starting at the Eastern end, to make efforts to stabilize at least some of the country, then work West to deal with the problems of Caracas.  I recognize that a good number do not agree, and that's fine; we shall see how it plays out.  Continued misery there benefits only Maduro and his gang of thieves and looters. 

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21 hours ago, Mehrdad Nematollahi said:

Iran oil export   IS NOT ZERO  ,AS JOHN BOLTON  WISHES !

Already  Iran is exporting . The thing is  :  TRUMP  STILL DOES NOT KNOW  "OIL  MAFIA "!!

SO  TRY  PERMIAN OIL !  DO NOT WORRY  ABOUT IRAN.

WHY ALL THE UPPER CASE WRITING?

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5 minutes ago, Douglas Buckland said:

Explain to me just how the farmer's vote is worth way more than the others? 

Don't areas with lower population get a disproportionate amount of Electoral College votes?

Edited by Enthalpic

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4 minutes ago, Douglas Buckland said:

Explain to me just how the farmer's vote is worth way more than the others? 

It is not.  It is exactly equal to anyone else's, with some allowances for slight differences in population between Congressional House District populations.  Remember, Doug, you are corresponding with a Canadian up there, with only a marginal understanding of the historically complex US elections system!

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