I don’t get this. Didn’t we send men and women, and a Hell of a lot of taxpayer money into this region, not only to knock-down an ever expanding tyrant, but more importantly, to protect the vast oil supplies of the Middle East?
Why the Hell am I spending a fortune at the fuel pump because the Middle East oil suppliers want a bit more profit? Shouldn’t we be saying to them- Listen, we protected your sorry ass from being over-run by Iraq and Saddam Hussien, cut us some slack here.
Ostensibly, we went to war with Iraq because Hussein invaded Kuwait. It’s in our interests to keep some semblance of peace in the MidEast because we are so godawful obsessed with our petroleum. But we do not make a policy of (obvious) international extortion.
And, if I understand correctly, we somewhat wanted higher oil prices because we wanted the old Soviet Union to start making some money for themselves by rasising the price of crude. Thus, reducing the amount of money we give them in the form of aid. Instead, it snowballed and now the Middle Eastern barrons are hard pressed to increase oil production because the’ve been able to get away with it.
Ever hear of supply and demand? The Gulf War was a long time ago, was in Western self-interest to begin with and was heavily reimbursed by the Saudis et al. OPEC covers more than just the Arab oil-producing states, it includes important African and South American producers.
Tired of wholesale oil prices so low as to not cover their costs at the lowest mark, OPEC members, and non-member observing nations agreed to cut production relatively modestly. Coincidentally, the economic boom in the United States and Wester Europe, combined with asian economies’ recoveries, has pushed oil demand to new highs. Supply contracted. Bingo, higher prices.
Now, if greater fuel conservation had been practiced these last few years then perhaps this spike in prices would not have happened. Indeed, most producers are running flat out. The problem lies with Western conumers, especially whiny Americans driving monster --trucks-- not OPEC, it is a free market after all.
The real solution in America is for the government to renew leases on our own oil producing land. We need to bring our own production back up to well over 50% of our use.
(1) Consumption rises as prices decline
(2) Removes pressure for innovative and productivity increasing conservation measures. Expensive short-term, excellent long-term for returns.
(3) Non-rennewable resource, USA locks in higher consumption with little pressure to either innovate or conserve. When the USA taps out its own rather limited fields it is left with a worse situation overall.
<xeno looks around at the rest of the Sunday school class and raises his hand>
Maybe for the same reason you don’t walk over to your local family-run convenience store with some friends and intimidate the owner into giving you “discounts” on the merchandise. It’s wrong.
Even better, it would have the same poor long term effects on commerce as going down to the local convenience store and muscling your way into free or discounted produce. Eventually the merchant decides not to sell in your neighborhood, and someone who does sell to you likely charges higher prices.
Our own fields are vast. Large enough to supply 100% of our needs. We have even discovered more land that has huge potential that the Government won’t even allow us to explore. Yes, it is a finite resource, but that goes for the middle east too. Not just us. We have just as much oil here as they have there, possibly more.
It’s even worse than that. It’s as though the govenment mandates that you must purchase over half of the goods from that convenience store, regardless of the fact that you already own all of the food you need… You’re just not allowed to eat any of it.
Yes, the new Alaska strikes are huge, yes they can supply a lot of oil. But they most certainly are not as big as the oil supplies in the Middle East. To date, the largest oil strike in the world occurred in the Persian Gulf.
Even if we were to exploit the Alaskan field, it lies under the largest wildlife refuge in the country, and environmental groups will fight, and are, in fact, currently fighting, the exploitation of the area with all their collective might.
Plus, why don’t we all just ditch our gas-guzzling SUVs before we clamor to spend even more of the one natural resource that we probably won’t be able to wean ourselves off of before it runs out?
What happened to the Athabasca tar sands? I recall that the canadians estimated that their tar sands held immense reserves of oil-although the extraction costs were high. What about california-huge offshore deposits in the santa Barbara channel (now closed to drilling).Also-the Saspian Sea (Russia) may have more oil under it than saudi Arabia!
There is plenty of oil, as long as you are willing to pay the price!
To you Americans-stop whining and start drilling!
First: Think cost. Extraction and processing costs may be higher than extent costs of oil presently.
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Second: Russia has sat in on the recent OPEC meetings, as have most other non-member producing nations. They have a common interest in higher prices, which are only sustainable of course because demand is so high. If a significant number of non-member producing nations were not coordinating with OPEC and if Western demand was not so high, there would not be such high prices. OPEC is not a bunch of ‘oil sheikhs’ (PS: that’s Caspian Sea)
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Third: For those thinking of alcohol and alternate fuels. All well and fine, but thinking of fixed infrastructure costs. Farmers switching over to Alcohol burning because of a spike in oil prices --due largely to poor planning on consuming nations part-- is neither efficient for effective. Most alcohol burning engines are neither as clean nor as efficient as gas burning engines. And of course, as farm consumption is such a small part of the market, it would have little effect on
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Fourth: Alaskan and other fields. I repeat, this is silly short term thinking. (a) As someone else noted, American fields do not approach Middle Eastern fields in size, nor could the US cover current demand in any realistic time frame. (b) Rushing into developing sensitive areas based on some short-term pain is neither good policy nor terribly intelligent. There are doubtless more effective ways to deal with the situation such as conservation measures, research into increasing engine efficiency etc.
If we slapped a nice carbon tax on oil (presumably phased in over time) so that consumers paid the real costs associated with its use, then we would get:
(1) greater incentive for conservation.
(2) fewer SUVs clogging the roads.
(3) less smog and traffic jams.
(4) less demand for oil which would help to push the price that OPEC could charge down.
(5) greater incentives for the development of alternative energy technologies so that the U.S. isn’t left behind in this area…Hey, in Denmark they are already getting a significant portion of their energy from wind power.
(6) fewer unhealthy, obese Americans because people would have to get up off their lazy butts and walk, ride a bike, walk to the bus or subway, … in order to get somewhere.
While I’m in my crazy paranoid like state I’ll go ahead and say something I usually wouldn’t say…
I’ll tell you how to make it in their best interests to lower prices…saturation bombing. MWA HA HA HA
go us!
But seriously though, I can’t wait to see the day when we no longer depend on their oil so much. We can drive up the cost of food or some shit and make them squeal like a stuck pig.
So destroying major sources of oil for the world market will cause the price to go down? Ahhh, I only wish we had such intelligent economic policies in place, just like the middle ages.
I would rather hope that we allow markets to function, and stop whinging like small children when our own wasteful habits get us in a bind.
What is it about oil prices that shuts down rational thinking?