In case you missed it over the weekend, Saudi Prince Al-Waleed bin Talal said on CNN Sunday that he wants oil prices to drop – not because he's worried what $100 oil is doing to the our economy but because he's worried the United States and Europe might push more quickly toward alternatives.
"We don't want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives," he said on CNN, which noted Talal is listed by Forbes as the 26th richest man in the world. He's the grandson of the founding king of modern Saudi Arabia.
Talal said he'd like the oil price to be somewhere between $70 and $80 a barrel rather than the current price of more than $100 a barrel. Gee, what a swell guy....let's work keep oil prices "low" so Americans keep sending us checks while spending billions on their military to keep oil shipping lanes open for us.
Perhaps Talal read a report from BP that said the United States’ dependence on foreign oil peaked in 2005 and increased fuel efficiency and the increased use of biofuels like ethanol will further drive down that dependence and the use of oil overall through 2030. BP's report said the import share of oil and gas to the U.S. will fall to levels not seen since the 1980s, do in part to ethanol, which BP noted displaces oil imports. (Here's a more recent Reuters piece that cites the Energy Information Administration noting similar points.)
Biofuels like ethanol are already displacing foreign oil and reducing the amount of expensive oil in most gas tanks across the country – and obviously it's gotten the attention of Big Oil. One recent study said if ethanol production came to a halt, the estimated gasoline price increase would be of "historic proportions," ranging from 41 to 92 percent. At today's prices you'd be looking at $5.60-$7.60 per gallon gas without ethanol.
Should we follow Talal's wishes and just stay hooked on oil? Or should we continue to push to diversify our fuel supply with alternatives like ethanol and biodiesel? Should we have policies that favor Big Oil, Talal and his cronies? Or policies that favor growing renewables and support our own economy?
Some scientists believe the entire earths core is comprised of hydro-carbons which percolate up through the mantle and are trapped in formations in the crust. In effect it becomes oil as it rises through temperature and pressures.
ReplyDeletePerhaps Price Talal also read a statement from BP's president saying that the solution for fossil fuels is Brazil's sugarcane model.
ReplyDeleteBut since this is a blog on corn I get the feeling this post will never get published, or will raise a lot of angry heads.
@ Anonymous: Of course BP's president would say that...it has invested in sugarcane ethanol in Brazil! It's also irrelevant because the U.S. cannot produce sugarcane in the same quantities as it can corn...and Brazil can't produce enough ethanol for itself let alone our market. In fact, Brazil is importing ethanol from the U.S.
ReplyDeleteWhile I hate to see U.S. ethanol going overseas, until we work to use more of it here at home, that's where some of it is going to go.
@Online Marketing Consultant: That sounds like a nice theory and all, but even Big Oil admits it's getting more difficult and expensive to find oil. So much so that some of the dirtiest oil on the planet -- the tar sands -- are coming into production.
ReplyDelete