The jury is out on whether Saudi Arabia actually has enough excess or spare production capacity to continue to control the price of oil. I discussed that at length in two posts this year (here and here).
What is clear is that the Saudis want to create the impression that they control the price of oil — and that they don’t want oil prices so high that Americans make the shift off of our billion-dollar-a-day addiction too quickly, which is to say, fast enough to preserve a livable climate for our children and countless future generations.
If you need proof, Ben Armbruster of Think Progress Security has this remarkable video of Saudi Prince Alwaleed bin Talal on CNN:
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.
The Saudi interest does not coincide with the American interest — and recent Saudi actions are at the very least puzzling if they really want lower oil prices — see “Does Saudia Arabia want Obama to lose? Is the recent run-up in oil prices due in part to Saudis slashing production in March by over 800,000 barrels a day?”
As yet more evidence that the Saudi interest does not match ours, consider the fact that “bin Talal is also one of Fox News’s largest shareholders.”
Finally, even if the Saudis have enough remaining capacity to significantly reduce the price of oil now, that won’t last long — see WikiLeaks peak oil bombshell: Saudi Arabian reserves overstated by 40%, global production plateau immiment.
Oil Drum has supporting analysis here, with this great figure:
Exports, in green, are down because Saudi Arabia is consuming more and more of its own oil, so there is less available for others
And that means no matter what happens in the near-term, the medium- and long-term trend is up, up, up:
- Jeremy Grantham must-read, “Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever”
- Science: “Peak oil production may already be here”
- Least surprising headline of the day: “Exxon Struggles To Find New Oil”
- World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us”
- German military study warns of peak oil crisis
- Peak oil production coming sooner than expected
Below are the comments from the Facebook commenting system:
The incoming water crisis will make peak oil look like a (insert your metaphor here).
Fox News chief enforced climate change scepticism – leaked email.
Email obtained by Media Matters reveals reporters were under orders to cast doubt on any mention of climate change.
prokaryotes, that’s a great story about Fox rejecting the ad by a veterans group. This should be a front page story- we know organs like the New York Times will ignore it, but the message has to get out there somehow.
And yeah, David Smith, Americans hate the oil companies anyway. The problem is that they might love their big trucks even more than they hate people like the Saudis.
In my opinion our dependence on countries like Saudi Arabia, which is run by religious fanatics, is unconscionable. And if oil prices go to $250 or more- likely in the next few years- the wealth transfer to oil producing countries could bankrupt us. We have to stop them, including our own complicit firms such as Exxon and Chevron. At some point a president is going to have to take emergency action, which could include nationalizing the oil companies and going on a clean energy fast track. If we don’t kick start this, it may be too late when we finally get around to changing things in a serious way.
On our busines-as-usual path, doesn’t raising oil prices lead to and require our eventual military take over of foreign oil feilds? Wouldn’t this occur prior to bankruptcy, something far less than $250 per barrel?
June 2 at 10:30am
I still think a compelling argument can be made, a wedge can be created between the dirty energy companies and an overwhelming majority of voting Americans based on this issue; that we are all being manipulated by these corporations (and certain world leaders)against our on best interests, purely to protect the golden eggs of an extremely small group of individuals, globally. No one likes to be f__ked with where they live and that is exactly what’s happening here. This could be very emotional. Argueng about who is right is an argument without end.
These guys are giving capitalism a bad name. Industries that outlive their usefullnes or create great consumer hazzards are supposed to naturally bankrupt and dissappear in free-market capitalism. The life of the dirty energy industry is being extended artificially by one reason; the wealth of the participants.
Saudi-funded Fox News rejects ad by veterans group arguing against Middle East oil dependence http://thinkprogress.org/romm/2010/05/05/205934/saudi-funded-fox-news-rejects-ad-by-veterans-group-arguing-against-middle-east-oil-dependence/.
Obama is more than a disappointment…
My Dear Senator, Tom Coburn, said last week “We have oil out the Wazoo”..must be, he knows everything.