Comment 60670

By Undustrial (registered) - website | Posted March 03, 2011 at 12:35:29

The 'Oil Shocks' of decades past happened to fall right after the peak of American oil extraction in about 1970. A similar embargo was tried in 1967, but had little effect as Texas simply pumped more. In 1973 that the peak had been slightly passed, the economics of that were all different, and gas lines formed. For all of America's money and technology, it's seen a constant fall in lower-48 production since about 1970.

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We need to be really careful what we deem simply "political" reasons for oil shortages. Actual oil shortages underlie many large-scale political events (see the theories of a peak shortly before the fall of the USSR), as well as economic ones. More importantly, though, it raises some serious questions about how we see "oil" globally. If Saudi Arabia decides to cut back on oil production in order to raise prices, is that necessarily an attack on US and OUR oil supplies?

The single dumbest thing Saudi Arabia could be doing right now is pumping all of their easily accessible oil as fast as possible. Doing it with the conscious purpose of lowering global oil prices is doubly stupid. It ensures not only that they'll have little oil to sell in the future (when prices are likely far higher), but it does everything possible to shrink their income per barrel in the present. Would choosing to act differently - a responsible and conservative approach which slowed production to ensure some in years to come - be a "conspiracy" against us? Something to punish with wars, sanctions or the installation of (another) puppet government?

To put it another way, do I have the right to siphon my neighbour's gas if I don't want to pay his asking price? Is it simply a "political" decision to not allow me to do so?

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