oil

This chart from the New York Times shows the current conundrum fairly clearly:



The only ones able to increase production are the Saudis. Is this a sign that we've Hubbert-peaked? You never know, but it's quite possible. Meanwhile demand in Asia will keep rising. OPEC probably should cut production ahead of the inevitible post-peak price slump in our economy, due next year. Another interesting quote from the NYT article states

"So far, the strongest call for a production cut has come from Iran, OPEC's second-largest producer, which argues that member countries should stick to their assigned production quotas."

I can't help but think that the nukes issue is directly related to that. Once we're peaking, with instability in Iraq and possible coup scenarios in Saudi Arabia, who else will the West turn to (Asia is already buying their oil and will do so more in the future). At that point, their best bargaining chip will be military might. They want us to eventually buy their oil on their terms, not ours.

I still think that it's not too late to conserve. I'm actually willing to concede that with a stringent conservation program in place, it might be OK to consider drilling in the arctic. However, with the current administration and like-minded folks in Congress--remember the days when they didn't want us to conserve because oil prices would rise, those were the days before they tried to screw over Venezuela and invaded Iraq--we probably can't expect too much in the way of conservation. So, can we all just get together and make the free market work and buy more efficient products from more local sources? That would be ideal.

This might be especially important now that OPEC has begun shorting the dollar, according to the financial times. So far, we've not been nearly as hard-hit by higher oil prices than we could have been. If OPEC is going to shift off of the greenback, watch out: oil will be relatively more expensive to us if it's in Euros. IMHO, while it's good to rebalance a little with a weaker dollar, you don't want to piss it all away either!