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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (199498)	8/26/2006 1:27:16 PM
From: Ichy Smith	Read Replies (2) \| Respond to of 281500

We also have the right, which we should ALREADY be exercising, to reduce and/or eliminate our reliance upon their oil. Ah a man after my own heart.....

To: Hawkmoon who wrote (199498)	8/26/2006 1:48:41 PM
From: Keith Feral	Read Replies (2) \| Respond to of 281500

You know Hawk, I like the fact that oil is a seller's market. If it returns to a buyers market, it will destroy the market incentive to innovate. Free market economics needs to hit a wall of inefficiency to create incentives. Oil at $70 a barrel is a huge incentive to innovate. Diesel, liquified coal, canadian oil sands, oil shale - these are all huge reserves, not to the new offshore drilling opportunities in the Gulf of Mexico. I think that Iran is doing everything in their power not to cooperate along nuclear policy to keep the risk premium in the oil market. That is why they are not giving up on their bellicose foreign policy even though they don't have shit to back it up from a military standpoint. Every estimate says that these new sources of oil will provide far greater reserves than Saudi Arabia. However, they all require the fixed cost of oil to remain between $40 to $50 a barrel. If we keep letting the price of oil collapse, we are never going to move exploit these new reserves. I think we actually need oil prices to remain high long enough to attract enough new sources. Once the new infrastructure is built, prices will naturally collapse when there is an abundance of oil. At the same time, we also need car makers to make new engines to accomodate the new technology like diesel, hybrids, hydrogen, etc... In a few more years, the process of commercialization will be irreversible as people are now making gas mileage their number 1 priority when they purchase an automobile. It's about time. I just wish there was a sense that energy prices would stay high enough to make all this happen. I'm glad that Congress isn't forcing irrational competition in the market to swiftly bring down prices, just to destroy the returns for everyone like they did in the telecom business. I am hoping for another 2 or 3 years of stable energy pricing between $65 to $75 to make sure that the alternative market has enough of a chance to get started. If oil falls back under $60, I think that most people would postpone investment in alternative energy again like they did in the 70's.