Some interesting but underreported developments at the OPEC Summit in Vienna, a day before America entered a 24-hours-long 9-11 trance.
The Saudi delegation to the Organization of Petroleum Exporting Countries (OPEC) vowed to ignore the OPEC decision to cut oil production in the wake of falling prices and a weakening in flawed indicators that have traditionally described global economic performance. With prices simmering around $100 today OPEC is seeking to minimize sharp price drops by reducing output by 520,000 barrels a day.
I won’t begin to pretend to understand petroleum diplomacy — nor should anyone really — but this does not bode well for OPEC. US-backed Saudi Arabia (origin of fifteen of the 19 suspected hijackers on 9-11, not that that ever mattered) is the world’s largest oil-exporter and accounts for a third of OPEC’s output. Their opposition alone might keep prices unhealthily low ahead and challenges the traditional hold of OPEC over prices.
Bad news for OPEC. Bad news for people?
This also does not bode well for the long-term economic and ecological health of global society. Artificially low oil prices on the global market — the result of massive government subsidies, indirect supports, undertaxation, and organized violence — will ensure alternatives in energy delivery and conservation aren’t pursued despite desperate need.
And certainly, cuts in fuel excise taxes don’t help either, Mr. Harper.
On the OPEC news, NYT writes:
Moderate and pro-Western states like Saudi Arabia and the United Arab Emirates are aware that high energy costs are hurting demand and might push consumers to seek alternatives to oil. These countries want to see prices fall below $100 a barrel to ease political enmity against the cartel. [...]
The perception that OPEC was unwilling to do its part to bring down prices brought sharp criticism Wednesday from Western officials. “We’d like to see more oil on the market, not less,” the White House press secretary, Dana M. Perino, said at a briefing.
Well, here’s my sharp criticism: I’d like to see government support for 100% clean energy and honesty about their collusion with big petroleum.
In the meantime, a little honesty about anything will do.
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