You're got to hand it to OPEC; they run a sweet racket. They engage in what the anti-trust department would define as price fixing in any other industry, but since they're not under US law they can get away with it.
I think its time we put our foot down.
Back in the 1980's, there was a great interest in the development of oil shale, and at least some in other non-conventional oil production techniques. That didn't work out because oil prices fell due to an increase in the production of conventional (well/pump) oil. The industry is hesitant to invest in capital setup for non-conventional oil processing now because OPEC could flood the market with cheap oil again any time they want to, rendering non-conventional oil uneconomical once again.
There are huge (centuries worth) reserves in the US and Canada of non-conventional oil. But right now we're sending money to the mid-east, and a lot of that money is then going to fund Islamic terrorists.
So, here's my proposal. Let's have some people sit down and figure out the current oil needs of the US (and Canada, if they want in on the deal). We then setup a government program that will subsidize domestic (ONLY) non-conventional oil production methods, to the point where they are able to economically supply the current US demand without any imported oil. Who pays for this? We do. I for one would be happy to pay double the current price of gas if it meant my money wasn't going to our "good friends" Saudi Arabia, etc. I'll even take up the burden of paying a share for those who can't afford it. I think there are a lot of other people out there who hate funding Islamic extremists. Let's put our money where our mouth is.
Now, if the US demand for oil rises we'll have to go back to importing the difference. This plan isn't designed to let our oil consumption get out of hand. There would have to be careful safeguards to prevent abuse. Nor does this plan fix anyone else's problems: we aren't going to fund Europe, or China, or pay companies to import oil shale-produced oil from some other country.
I'd also make higher car/truck fleet MPG standards part of the package; and make sure the language doesn't give special treatment to SUV's.
What do you think? Is the core idea good? How would you make it better? How much would you pay to know that your gas money is going to US companies, employing US citizens, instead of mideast oil barons?
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2 comments:
Sorry, but I think the core idea is flawed. The free market is something that the American public believes in(and believes that we have). The idea that we are entitled to the cheapest price we can find is, I think, firmly fixed in the American Mindset. To base a plan on the idea that Americans in general will willingly pay more for oil from our own country, when we could get it cheaper(in a visible, up-front, cost per barrel kind of cost)buying from OPEC? Not likely to be tried, even less likely to succeed.
Now that doesn't mean that we will not develop oil shale technology, just that we are unlikely to walk away from OPEC while they still have cheap(er) oil.
A point that that I'd like to toss back to you to think about. Assuming that there is a limited amount of oil in the world, isn't it better(for the US) to use up the non-US sources first? Having the last (easy to get to) oil in the world on our territory strikes me as better for us than having it be in Iraq. Using the threat of developing shale oil production to keep the price of OPEC oil lower strikes me as a politically smart move.
Actually, your comment is more relevant to my proposal today than to yesterdays, but it is indeed the Achillie's (sp?) Heel of this idea. Many if not most people, I am sure, will just buy the cheapest gas they can. I have no idea if there are enough people like me out there to make any of this workable.
To clarify, I should have noted that Idea #1 (subsidies to domestic production) is paid for by tax dollars, not at the pump.
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