What you say was partly true in the late eighties and early 90s. OPEC had enough spare capacity (mostly Saudi Arabia) so that the Saudis could pump more if needed by the market. Saudi was the “swing producer”. I was in Saudi Arabia in 1985, and they were pumping only 2.5 million barrels/day, compared to a productive capacity of nearly 10 millon at that time. Oil at that time was selling just over $10 a barrel. China was SELF SUFFICIENT in oil and Britain was a major exporter. Next year they will be a net IMPORTER!
Right now, the Saudis pumping over 12 million, but have very little spare capacity left. They told Bush they could raise capacity to 16 million barrels/day, but that will take a lot of time. A good book to read is “Twilight in the Desert”, written by a Texan who knows oil.
As I said elsewhere; if it’s a conspiracy, it is a conspiracy of the incompetent (state oil companies), who sit on potential reserves without being able to quickly put them into production.
I have followed the oil business since the oil embargo in the early 70’s. Never buy into the conspiracy stuff. The only time a cartel can dictate price is when the demand exceeds supply, period! Supply has more often than not been in an over supply situation and OPEC has tried to reduce production by limiting quotas to keep the price up. But cartels NEVER work in an over supplied market, why, because the producers are addicted to $s and they all cheat. (as longs as the market price is higher than the cost of production they will sell it, because not to sell is to not get their fix, i.e. $s.)
Economics 101: Price is the ultimate ration-er of goods and services! As long as the demand is what it is the price will continue to rise. As far as peak-oil is concerned don’t bet too heavily on it. Oil wells almost never go dry. Technology continues to squeeze more oil out of old wells. Yes they slow down and new reserves are always being found, because as it turns out oil/gas will be found by drilling ever deeper wells. We will never run out, because price will ration it.
The Saudis once upon a time did not want oil to go above $35/bl, for fear of alternatives reducing demand and they would not be able to sell as much oil to satisfy their addiction. Ultimately, if oil supplies can’t keep up with demand price will force alternatives, whatever they may be, and oil will be used for stuff other than energy e.g. plastics, pharmaceuticals etc.
Let’s see… what, as an individual, can I not do (properly or otherwise)?
- I can’t defend this country against outside aggression – need an army
- I can’t defend this country against internal aggression (criminals) – need police
- I can’t protect myself against poisoning by couldn’t-care-less corporations – need pollution laws
- I can’t protect myself against dangerous and shoddy products – need health and safety laws
- I can’t protect myself from exploitation by greedy speculators and manipulators – need financial and market regulators
- I can’t protect myself from exploitation and discrimination at work, in housing, in lending, etc. – need laws to give fair and equal access
- I can’t afford health care – need control of costs and affordable insurance
Libertarianism is one of those things that sound nice on paper. So does Communism (“from each according to his abilities, to each according to his needs”). However, both run up against basic human nature in that everyone tends to look out for Number 1, and to hell with society. I’m not going to say that Big Government is wonderful – it’s incredibly inefficient and wasteful of my tax dollars, and it can intrude into the lives of even those who try to live quietly and not ruffle others’ feathers. However, if the alternatives are everyone-for-themselves anarchy or Big Brother totalitarianism (where only the ruling elite live well and without fear), I’ll settle for what we have now.
And oh, just for the record:
- I can decide for myself what I’m going to read or watch, but I shouldn’t be allowed to force my choices on others who don’t share the same tastes.
- I can run my own sex life, thank you, without bluenoses peeking into the bedroom and regulating me, so long as it involves only consenting adults and is done in reasonable privacy.
- If I choose to be irresponsible and drive a Hummer, I should be able to so long as I pay the full cost to society of the extra gas use (don’t subsidize my driving).
- I should be held fully responsible for any voluntary actions on my part. No whining about victimhood allowed.
Coach Harv - lets not pretend that there are only 2 ways it can be - either some all controlling conspiracy who calls the shots OR a free and open market. One or the other of these things might exist in pure form from time to time and in certain market segments. But neither exists in global oil. All that stuff you get out of ECON 101 looks good in textbooks but becomes a very imperfect when applied to actual market segments. Granted - global oil trade is too complicated to control, and supply/demand issues operate. But to pretend that its not a sector heavily shaped by a relatively small number of players is kind of nutty IMHO. (Keeping in mind that those players have some shared, some conflicting interests - not a “conspiracy” basis - which is part of what adds to the complications).
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However, both run up against basic human nature in that everyone tends to look out for Number 1, and to hell with society.[/i]
I always find this particularly widespread assumption to be strange since it is so demonstrably false. Does this mean that I’ll beat my wife and kids off of the last slice of pizza so that I’ll get it? And/or does it mean that I won’t help my neighbor fix his plumbing problem if he needs it? And/or does it mean that I won’t stop and help a complete stranger change a flat tire in a parking lot? (I’ve done the last 2 but not the first).
Here’s what scares me about that - humans do sometimes just look out for number 1 and to hell w/ everyone else. But that’s often just b/c they believe that’s how “humans” act. Its a self-fulfilling prophecy but it is falsified on a daily basis.
Its also not a great basis for a political philosophy. You’ll find libertarianism in many forms out there, but the point is not that people don’t/won’t/can’t organize to deal with the public good. Rather, they do it on a smaller scale. “Government” is not a problem. BIG government is. “Business” is not a problem. BIG business is.
Mountainbike, a couple of facts of life. Firstly, oil production and the processing and marketing are not really tied together closely. There are over 100 oil companies in Houston, only an handful are big names. These independents, who are mostly producers, have a better cost structure and can often get production out of marginal areas. They sell their output to the refiners/marketers.
Some independents grow in in size and become big. It’s really not that difficult to get into the oil PRODUCTION business; the hard part is finding enough areas to explore.
The majority of the world’s remaining reserves are in the hands of state oil companies; Russia, OPEC members and others, who produce at their own pace, and siphon off revenue for social and other programs, often not leaving enough for reserve development.
I have a picture from the 1976 National Geographic where Secretary of State Henry Kissinger is meeting with the King of Saudi Arabia and asking him to increase oil production to 20 million barrels/day to meet the US oil market demands. Saudis were producing just over 10 million at that time, I recall.
I also have a very recent picture of George Bush Jr. asking the king (different king) of Saudi Arabia to increase oil production so the US will not run short. The Saudis gave diplomatically said in both cases they will develop reserves at their own pace.
This type of arrogance will be our downfall; president Chavez of Venezuela is very busy making deals with the Chinese and will divert all of its US exports to them and other countries very soon.
So, there is a Cartel, but not a very effective one; price fluctuations are driven by the MARGINAL COST OF DEVELOPING NEW SUPPLIES (basic economics), political uncertainty, weather and other disruption, the dropping value of the dollar, and finally, hedge fund operators who try to gage the future.
I always find this particularly widespread assumption to be strange since it is so demonstrably false. Does this mean that I’ll beat my wife and kids off of the last slice of pizza so that I’ll get it? And/or does it mean that I won’t help my neighbor fix his plumbing problem if he needs it? And/or does it mean that I won’t stop and help a complete stranger change a flat tire in a parking lot? (I’ve done the last 2 but not the first).
It’s NOT that simple. Helping family and friends is one thing…Helping STRANGERS is something TOTALLY DIFFERENT. Helping a stranger who’s stranded on the road many people will do…AS LONG AS IT’S NOT AN INCONVENIENCE. I don’t know any good father or mother who wouldn’t SACRIFICE their life or food for their children…would you do the same for a complete stranger??? Sure some will…Would you give food to a stranger if it meant one of your children would go hungry???
To get back to the subject of high gas prices, here are some to put things in perspective:
Highest:
- Norway $8.78
- United Kingdom $8.40
- Netherlands $8.40
- Belgium $8.25
- France $8.06
- Germany $7.90
- Italy $7.75
In the middle somewhere:
- Canada $4.65
- USA $3.65
- Mexico $3.61
- Russia $ 3.34
- China $2.85
- Australia $4.67
The low ones are all countries who are subsidizing gas to their citzens in order to avoid gas riots, and help their governments to stay in power:
- Venezuela $0.11
- Iran $0.42
- Saudi Arabia $0.46
- Libya $0.49
- Swaziland $0.53
- Qatar $0.72
- Bahrain $ 0.80
- Egypt $0.91
- Kuwat $ 0.91
- Seychelles $0.99
Note that the 2 top countries, Norway and the United Kingdom are oil producing countries, with no need to have high gas prices to protect their balance of payments.
The US at $3.65 has cheap gas compared to the rest of the developed world.
MikeInNH - the point is actually that we are also cooperative and helpful by “nature” - not just somehow simply “selfish.” One might say “one helps one’s own” (family or whatever) - but then we have to recognize how variable our definition of what counts as “one’s own” can be. There certainly are conditions that will shrink our idea of who is included in “our own” - as you sort of note. So, I’ll return the statement - It’s NOT that simple.
Humans are social by nature - much moreso than individualistic and only out for themselves.
And helping a stranger is TOTALLY DIFFERENT only depending on how you construct “strangers” in you mind. And it is also not true that people will only do it if its not an inconvenience.
admitted amateur, I can tell that your glass is half full.
Ahhh - but its also half empty - it just depends on what is going on 
But I’ll clarify the initial post on this - decidedly off the OP - topic. I wasn’t saying and never would say that people don’t sometimes just look out for #1 and to hell w/ everyone else. Obviously they do. But that doesn’t make it “human nature” any more than the fact that people often wear t-shirts makes t-shirt wearing “human nature.”
I just can’t think in either/or boxes - since its rarely as simple as that.
“The low ones are all countries who are subsidizing gas to their citzens in order to avoid gas riots, and help their governments to stay in power:”
Well there you have it. What we need to do in this country to lower the price of gas is threaten to have gas riots and promise to keep the incumbents in office! What’s so hard about that?