Thursday, May 22, 2008

That darned oil thing

Politicians keep whining at our good and excessively corrupt and venal friends in the Saudi government that they should be sending us lot more oil.

First, it's likely they don't have the spare oil to send. Look beyond the stories about Bush trying to convince the Saudis that they ought to help us with our addiction, and you can find a lot of data suggesting that the Saudis ability to increase oil production may be at its limit.

Second, put yourself in the Saudis' sandals. Let's say you are a powerful member of a vastly corrupt and venal government that cannot provide enough jobs for your people and you need to mollify the masses by shoving oil money at them. You have limited oil reserves, but potentially unlimited anger out there among your own population. You need to bank some of that oil revenue against the day the oil is gone so you can continue to buy off the people and pay for your oversized, repressive security forces that can quickly, brutally and efficiently put down any little uprising that may occur. No motivation to increase supply and reduce prices there.

In addition, the sugar daddy supplicant that is begging for more oil has swaggered into your global neighborhood and started a fight with the neighbors in Iraq. The fight threatens stability in the whole region, and has stirred up nests of troublesome, dangerous radical extremists everywhere. You want the fight to end.

Do you pump more oil so it easier and less expensive for that annoying supplicant whiner to continue its fight?

So remember -- Next time President Bush travels to Saudi Arabia to ask the Saudis to increase oil production, it is likely he just wanted the junket.

1 comment:

jon said...

I'm surprised Bush isn't talking about tapping Alaska...would it help at all? as far as the short-term goes, because I believe people will drive as they normally do (very poorly and idiotic) until they go broke.