The Organization of Petroleum Exporting Countries (OPEC) has swept aside your target of what a fair price for oil should be. And perhaps, the worst miscreant in that coven of reprobates is Your own benighted subject, Saudi Arabia's Oil Minister, Ali al-Naimi. The man shows no respect.
Why, only not that long ago he brayed to all who would listen that You in Your wisdom viewed a price of $75 a barrel as a fair price, a price he vested with the term as being 'noble' (Please see 'OPEC's Noble Cause' 12.17.08). And just last week he let it be known, clearly in contravention to his Monarch's proclamation, that the current price of $100 for oil quoted on the New York Mercantile Exchange, is just fine, and $110 for Brent quoted in London is even better (please see 'Saudi Arabia Targets $100 Crude Price' Financial Times 01.16.12). Especially so, we are given to understand, the big public spending increases needed to forestall the political unrest sweeping the Middle East (makes you feel warm and cozy up there in Maine?). Cunningly, he put it in such a way that we should be happy to have oil at these levels (leading to near $4.00/gallon gasoline at the pump Stateside), considering all the troubles with Iran and those narrow Straits of Hormuz.
King Abdullah, it is not befitting Your regal eminence, that You are 'overcut' so heedlessly, relegating Your royal pronouncements into the dustbin, and makes one wonder who truly is in charge: You, Your Highness or Your peripatetic Oil Minister?
Also, Your Highness, this is not good timing. Everyone is concerned about those messianic fanatics situated across from You on the far shore of the Persian Gulf. No telling what they are up to these days. One thing is for sure, were it not for our 'good ole' U.S. Naval Flotilla steaming off your shores in the Persian Gulf they'd be knocking at Your Palace door much to Your displeasure, unless of course, You would enjoy be paraded down Main Street in Tehran. And if You tolerate the machinations of Your Oil Minister in pushing the price of oil to levels beyond what You Yourself said is a fair price, and he forever waiting to bestir it ever higher, the price of Your inaction may become intolerably high for You and Your many Princely cousins.
You see, we have an election coming over here, and all that may entail. That said, and with this nation's growing volition to disengage our foreign entanglements, we will be reexamining many of our policies and may decide the price of oil at current levels and the much more than $100 million/day it costs the American public to keep a task force in the Persian Gulf to safeguard your coast line, is more than we are willing to handle. That we then have our task force weigh anchor and leave you to your own devices.
And in case Mr. Ali al-Naimi didn't tell you, we are at the cusp of becoming energy independent. In the last few years, with new drilling techniques, efficient hybrid cars, wind and solar and vast resources of coal we are quickly veering toward energy independence. To the point, as the development of shale gas and shale oil grows, the United States will become an important exporter of fossil fuels and energy commodities. In natural gas alone the expansion of proven resources using the new technology is enough to service this nation's needs for 150 years, and growing.
Your Highness, just in case you have not been doing Your sums consider the following: where natural gas and crude oil were traditionally priced in tandem almost step by step, with the vast new supplies of natural gas here, that relationship has now changed dramatically. Natural gas has become so abundant that its price has retreated to levels last seen some ten years ago. Today the price is $2.75/mmbtu, a price at which it delivers an energy quotient equivalent to crude oil priced at less than $17/barrel -- or levels reflecting quoted crude oil prices a little over 10 years ago!
While Your Mr. Ali al-Naimi wants us to pay $100 per barrel and more, please understand we are not that stupid to sit idly by. If he wants to keep oil prices at that level we will have Compressed Natural Gas powered trucks and then cars traveling our roads in short order --please see 'What is CNG'.
And please Your Highness, do not have Your Mr. Ali al-Naimi then ask around what he should do with all Your oil, as the answer would not be adequately elegant.
Follow Raymond J. Learsy on Twitter: www.twitter.com/raymondLearsy
Take the proceeds and push them into developing natural gas refueling stations and other
forms of energy independence.
I'm tired of being the world's policeman and spending our blood on foreign soil over oil.
http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp
http://www.mongabay.com/images/commodities/charts/crude_oil.html
http://viableopposition.blogspot.com/2011/12/future-of-oil-2010-to-2035.html
To compensate for production declines over the next 25 years, 47 million BOPD of production will have to be added, nearly twice the volume of oil currently produced by all Middle East nations.
That is what is going to drive the price of oil, not the temporary drop in demand from the United States.
Carter was right. Imagine if we had spent the last 30 years building the infrastructure.
The West should get used to the high Oil prices and adapt to it by using natural gas and renewable energies. It the OIL stays at $100+ for a while, we will see development of alternative energy sources and more energy efficient cars.
US is not so much dependent on Saudis' Oil. Let China and Europe who are dependent of Saudis' Oil worry about supply of Oil from Saudi Arabia.
We cannot afford to be policeman of the world and start another war for Israel, Saudi Arabia, or anybody else. King Abdullah can decide over the Oil prices according to what Market (read China and Europe) can pay for it.