Jed Rothwell wrote:
Edmund Storms wrote:
Well Steven, if you had the oil, would you agree to take less money
for your dwindling resource just because Bush asked?
No, but throughout its history, OPEC has been careful to keep the price
reasonably low, for two reasons:
1. To keep from hurting the U.S. economy, because the U.S. is their
biggest customer. (And nowadays because they get paid in dollars, but
that was never an issue in the past.)
2. To discourage the development of alternative energy source.
See the book "The Prize" for details.
Yes, these are the arguments of the past. The question is do they still
apply. A growing opinion is developing that a US depression is
unavoidable with the price of oil have little effect on the outcome. The
issue of developing alternate energy has changed from saving a few bucks
to saving the world. The price of oil will have no effect on this issue.
After all, this would mean you would also get less selling to China .
That is exactly my point. If they lower the price to help Bush, they
also get less from China. China is not hurting and would gladly pay the
price.
. .
They get the same price no matter who they sell to. Oil is completely
fungible. They don't care who buys the stuff. By the same token they
want to avoid a U.S. recession no matter who else is buying, because a
U.S. recession will lower worldwide demand and reduce the price of oil
worldwide. For that matter, they want to avoid a Chinese recession. They
would be concerned about the U.S. economy even if the U.S. were still
self-sufficient and exporting oil, as it did until the 1970s. It could
easily become self-sufficient again, by mandating the use of plug-in
hybrid cars. The U.S. could be a member of OPEC by 2015. In that
scenario, the Saudis would still prefer to see a strong U.S. economy.
Except they would hate to see GM sell millions of hybrid cars a year.
(Not a problem so far. Ten years after the Prius was introduced and
after Toyota has sold more than a million of them, GM has not sold a
single hybrid automobile. What a disgrace!)
If the U.S. stopped using oil completely, from all sources, then OPEC
would no longer care about our economy. Of course, if we had the
technology to do that, so would everyone else in the developed world,
and OPEC would be in a desperate situation.
Besides the price will naturally drop soon as the American economy
slides into depression. Why take a hit sooner than is necessary?
Bush is too late to avoid this outcome to his general policy. The forces
of greed that Bush allowed to take over the mortgage industry and his
encouragement of outsourcing of our basic industries have done the job
without the help from high energy cost.
A U.S. depression is what they are trying to avoid. That's why they
would be wise to do what Bush suggests. They should also pump the stuff
and sell it as quickly as they can, before someone invents a cheaper
alternative. Sooner or later, it will be worth nothing.
Yes, eventually this will be true, but not in the life time of anyone
living today. In spite of a wish for a better attitude, the present
energy industries will fight any effort to change the present source of
energy at every turn. They will support efforts that have no hope of
pushing them aside, such as ethanol and hot fusion, while fighting any
thing that will have an effect, such as more efficient cars.
But, watch and see if the price of oil actually drops thanks to Bush.
That will be the final evidence of his impotence.
Ed
- Jed
