Were it possible to post "below the fold" on blogspot, I'd do it to spare those tired of the oil debate. Alas, I cannot.
I stuck by my guns in Jib's and my extended comments discussion
, then read Jib's more recent post
, and did some more homework.
There seems to be an about-face going on:
WSJ: "Mexico's Plan to Open Oil Market
Bloomberg: "Brown Presses Britain's Oil Executives to Lift Output (Update1)
Baltimore Sun: "Saudis boost oil, modestly, Bush rebuffed
However, I'm afraid it's so late in the game that it won't change things much. The Saudis, for one, can't be relied upon to extend much production; it was mere weeks ago that they were responding to the US President's personal request for more production with a shrug
, a stance that clearly hasn't changed.
As I argued in my comment
, it's a different political world wherein our suppliers don't value the political capital of supplying to the US. See US suppliers here
The pressure of flagging markets
and the rising cost of everything is probably the bigger factor in easing pressure by any OPEC members - they have more to lose
than they have to gain in terms of declining values of offshore investments and pinched global trade. The Canadian Press
article points out that ""Globalization is reversible... In a world of triple-digit oil prices, distance costs money."
And there are other changes, other considerations. Although they're the biggest producer in their area, "Indonesia to quit OPEC, not happy with costly oil
" - they import too much and most of their citizens can't afford the oil-driven rising cost of living. That's one less supplier turning into one larger mouth at the trough.
Calls for continued high cost include posits that the increased production simply won't be enough
- China was outstripping it before the earthquake (I expect rebuilding costs to raise their energy needs), with India
on their heels. According to Mary Novak
, managing director for energy at consulting firm Global Insight, "Global demand for crude oil continues to increase. Demand has to slow, to respond to price." And Novak is commenting on the twisted role of speculators, which many believe to have caused a gas-price "bubble."
The Asia Times
article also notes the full weight of the Fed's role:
...the Fed has set a deliberate re-inflationary objective in order to reverse falling asset prices. It has aggressively resumed its expansionary monetary policy since August 2007, cutting the federal funds rate from 5.25% to 2% with a consequent faster expansion of money supply, resulting in a rapidly depreciating dollar and disrupting stability in commodity markets...
But what about the huge profits of Exxon et al? you say. Check the score board
Unlike years past, the world's largest oil producers aren't Exxon Mobil, Chevron or Conoco Phillips, but rather the National Iranian Oil Co., the Saudi Arabia Oil Co. and the Iraq National Oil Co. Even two years ago, America's largest oil company, Exxon Mobil, was only the world's 17th-largest player. The top 16 all were national oil companies.
It's important to note that any inroads in increased production have required significant begging, posturing and demanding from heads of state, which didn't occur when US gas prices crested $3 a gallon. As we speak, the markets
Once we settle into the pain, cost and restricted goods of the new economy, the cries won't even be whispers, and Ryan's Roadmap for America's Future
can cut out the part with its energy policies.
We need a course that's worth the investment. Unfortunately, people like Treasury Secretary Paulson have other ideas: "Paulson to push for oil investment in Mideast
." Great answer, Hank - more money flowing out to prop up others instead of investing in self-reliance.Forbes
notes that the only answer that doesn't send us back to the stone age is alternative energy, and we have much of the necessary technology. We may be able to live without oil, but we won't go far without energy.