On 1/24/07, Doug Henwood <[EMAIL PROTECTED]> wrote:
What oil price makes economic sense for SA over the long term?
Something north of $70 is probably bad, since it depresses demand and
encourages alternatives. $50-55 is high by recent standards, but
probably not so high as to invoke those negatives. If they really
wanted to hurt Iran, they could open the floodgates and push oil
below $30, no?
Henry said to me on A-List cryptically:
On 1/12/07, Henry C.K. Liu <[EMAIL PROTECTED]> wrote:
There is a move to push oil prices down to below $35 per barrel to
reduce the financial power of Venezuela and Iran and all the oil
producing rogue states. With $30 oil for three years a lot of trouble
maker governments will run out of cash to fund anti-US activities.
The era of $20 oil was very peaceful.
Some are certainly thinking that way:
-------------------- long quote begins --------------------
<http://www.pnas.org/cgi/content/abstract/0603903104v1>
Published online before print December 26, 2006
Proc. Natl. Acad. Sci. USA, 10.1073/pnas.0603903104
OPEN ACCESS ARTICLE
Economic Sciences
The Iranian petroleum crisis and United States national security
( market power | Middle East | oil | sanctions )
Roger Stern *
Department of Geography and Environmental Engineering, The Johns
Hopkins University, 3400 North Charles Street, Baltimore, MD 21218
Edited by Ronald W. Jones, University of Rochester, Rochester, NY, and
approved October 31, 2006 (received for review May 16, 2006)
The U.S. case against Iran is based on Iran's deceptions regarding
nuclear weapons development. This case is buttressed by assertions
that a state so petroleum-rich cannot need nuclear power to preserve
exports, as Iran claims. The U.S. infers, therefore, that Iran's
entire nuclear technology program must pertain to weapons development.
However, some industry analysts project an Irani oil export decline
[e.g., Clark JR (2005) Oil Gas J 103(18):34-39]. If such a decline is
occurring, Iran's claim to need nuclear power could be genuine.
Because Iran's government relies on monopoly proceeds from oil exports
for most revenue, it could become politically vulnerable if exports
decline. Here, we survey the political economy of Irani petroleum for
evidence of this decline. We define Iran's export decline rate (edr)
as its summed rates of depletion and domestic demand growth, which we
find equals 10-12%. We estimate marginal cost per barrel for additions
to Irani production capacity, from which we derive the "standstill"
investment required to offset edr. We then compare the standstill
investment to actual investment, which has been inadequate to offset
edr. Even if a relatively optimistic schedule of future capacity
addition is met, the ratio of 2011 to 2006 exports will be only
0.40-0.52. A more probable scenario is that, absent some change in
Irani policy, this ratio will be 0.33-0.46 with exports declining to
zero by 2014-2015. Energy subsidies, hostility to foreign investment,
and inefficiencies of its state-planned economy underlie Iran's
problem, which has no relation to "peak oil."
Author contributions: R.S. designed research, performed research, and
wrote the paper.
The author declares no conflict of interest.
Freely available online through the PNAS open access option.
*
Roger Stern, E-mail: [EMAIL PROTECTED]
<http://www.pnas.org/cgi/content/abstract/0503705102v1>
Oil market power and United States national security
( abundance | oil weapon | scarcity )
Roger Stern *
Department of Geography and Environmental Engineering, Johns Hopkins
University, 313 Ames Hall, 3400 N. Charles Street, Baltimore, MD 21218
Edited by Ronald W. Jones, University of Rochester, Rochester, NY, and
approved November 11, 2005 (received for review May 4, 2005)
It is widely believed that an oil weapon could impose scarcity upon
the United States. Impending resource exhaustion is thought to
exacerbate this threat. However, threat seems implausible when we
consider strategic deficits of prospective weapon users and the
improbability of impending resource exhaustion. Here, we explore a
hypothesis relating oil to national security under a different
assumption, abundance. We suggest that an oil cartel exerts market
power to keep abundance at bay, commanding monopoly rents [or wealth
transfers (wt)] that underwrite security threats. We then compare
security threats attributed to the oil weapon to those that may arise
from market power. We first reexamine whether oil is abundant or
scarce by reviewing current development data, then we estimate a
competitive price for oil. From this, we derive wt 2004 collections by
Persian Gulf states $132-178 x 10 9. We find that wt and the behavior
of states collecting it interact to actuate security threats. Threats
underwritten by wt are (i) the potential for emergence of a Persian
Gulf superpower and (ii) terrorism. It is therefore oil market power,
not oil per se, that actuates threats. We also describe a paradox in
the relation of market power to the United States' defense doctrine of
force projection to preempt a Gulf superpower. Because the superpower
threat derives from wt, force alone cannot preempt it. A further
paradox is that because foreign policy is premised on oil weapon fear,
market power is appeased. Threats thereby grow unimpeded.
----------------------------------------------------------------------
----------
Author contributions: R.S. designed research, performed research,
analyzed data, and wrote the paper.
Conflict of interest statement: No conflicts declared.
Freely available online through the PNAS open access option.
*To whom correspondence should be addressed.
Roger Stern, E-mail: [EMAIL PROTECTED]
www.pnas.org/cgi/doi/10.1073/pnas.0503705102
-------------------- long quote ends --------------------
Saudi Arabia and other Gulf states, for reasons of their own, appear
to be going along with that, though they, too, will suffer negative
consequences.
--
Yoshie
<http://montages.blogspot.com/>
<http://mrzine.org>
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