The Saudis want to keep the price of a barrel of oil between $70 and $80, because if it's much more than that, the incentives to finding alternatives to oil will be greater. And the Saudis don't want that!
"BIN TALAL: The stiff position of Saudi Arabia, we want the price to be between $70 and $80. Not only to help the West, but also to help ourselves. We don’t want the West to go and find alternatives, because, clearly, the higher the price oil goes, the more you have incentive to go and find alternatives. So, really, our interest coincides with American interest, to have the price for around $70, $80 which is a price good for consumers and producers."
7 comments :
Not only that, but if the US drills and mines it's own energy resources, the Saudis are willing and capable of going all the way down to $30 a barrel to compete. Which would still help the Western economies.
The reason for us to use our own resources is not cheaper energy. It for the JOBS that activity creates.
Finally, cheap oil prices will entice inventors of alternative fuels to push for methods that can actually compete with fossil fuels in price and efficiency.
Artificially impoverishing our own economies with oil tarriffs only saps the vibrant economies we need to do the big science that will lead to breakthroughs to advance us 100 years in the energy technology (which is what we need for them to be workable).
The Saudi's can't repeal peak oil. There's a limit to how much oil can be pumped in a day. If we haven't reached the limit, we're damned close. Biofuels can help close the gap, but electric vehicles will bring true energy independence. The US is blessed with massive reserves of natural gas and coal, as well as huge wind and geothermal resources. Making electricity is not a problem. This Nissan commercial makes gasoline use look pretty lame.
http://www.youtube.com/watch?v=j0sCCJFkEbE
If the federal government clamps down on coal reserves the way they have will oil reservers (and they are) the we will have the same bottleneck. We also have huge reserves of oil that rival those in the Middle East.We should use them to generate power for our little electric cars. And we'll need them to power our planes, trains, ships, and military vehicles. The day that we can do without oil is a day no one can foresee right now. (And nothing is lamer than biofuels.)
http://green.autoblog.com/2011/05/31/gallup-poll-shows-57-of-americans-wont-buy-an-electric-vehicle/
EV's aren't going to take over the road overnight. Ford says 25% of their fleet will be electric or plug-in by 2020 though. GM will probably get there sooner. When cars first hit the road 100 years ago, electric and internal combustion were neck and neck for dominance. Texas crude selling for as little as 5 cents a barrel tipped the balance in favor of IC's.
I've got a picture of the family under a gas sign in the middle of Oklahoma from 1999. The price was 68.9 cents. I took a picture because I knew gas would never be that low again. Hard to believe that was only 12 years ago.
Off topic:
http://jewishrefugees.blogspot.com/2011/06/was-islam-to-blame-for-farhud.html
Just read this and thought you might be interesed in this subject, since you blogged about iraqi jews.
Some scientists believe the entire earths core is comprised of hydro-carbons which percolate up through the mantle and are trapped in formations in the crust. In effect it becomes oil as it rises through temperature and pressures.
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