I Knew I Was Right, But DAMN…

OPEC, on a mission spearheaded by Iran and Venezuela, managed to cut production by 1.5 million barrels a day.  Saudi Arabia actually refused to cut production and, in fact, is pushing for the reduction to be stopped.  But despite their best efforts, oil prices continue to plummet.  After Iran’s oil minister said (and I quote), “the era of cheap oil is finished,” oil stocks continued to drop today.  They settled at less than $64 a barrel. 

They’ll meet again in December to revisit the issue and decide whether they want to cut production even more, but as I said, Saudi Arabia is against the cut in production.  I hate to sound like a broken record, but with the massive spike in prices over the last year, they gave us a taste of a life we have no desire to live.  We’re not willing to give up everything else to be able to drive gas-guzzling SUV’s.  Now the Iranian oil minister is all smiles, thinking they’re gonna get what they want after trying to proverbially slash our throats with the prices we were paying?  He’s joking, right?

When gas hit $4.10 a gallon here in Phoenix, I read Bill Hennessey’s blog and he predicted a collapse.  I told him not to tease me, but I agreed that with the pain induced by filling up our tanks oil prices could only drop or else people would just stop driving and cease the need for oil and gas.  Prices are continuing to drop not nearly as much because of the financial crisis (the dollar is getting stronger, folks) as it is because they forced us to figure out ways to cut back on our need.  Now that we know what they want, let’s drill and start studying chemistry like it’s going out of style.

Two More Reasons to Drill

Now that oil prices are dropping like a rock, Iran and Venezuela are heading an emergency meeting of OPEC–aka Organization of Petroleum Exporting Countries–because the two countries can’t believe how quickly and how far they’ve dropped.  Due to the recession here in the United States (if you haven’t woken up yet, yes, we’re in one) oil has dropped below $72 a barrel, a far cry from the $147 a barrel being demanded in July.  Both of the aforementioned radical countries had enjoyed the skyrocketing oil prices, with Iran expanding its nuclear program and Venezuela buying mountains of Russian weapons.  Now that their fundage is being cut, they’re panicking.  They’ve had a taste of what oil can bring them, and they want that money back.  They’re trying to convince the rest of the OPEC members to cut production in a concerted effort to drive prices even higher than they were before.

I remember the fable of the golden goose.  For those unfamiliar with the story, a farmer had a goose that laid golden eggs, and while the money was good and steady, the farmer became greedy.  He demanded that the goose lay eggs faster, but the goose wasn’t able.  One day, having spent his savings, the farmer went to kill the goose to take the eggs he was sure were inside it; the goose warned him that there were no eggs waiting to be laid, that if he wasn’t patient he would lose his gift.  The farmer killed the goose anyway, only to find the goose was right.  There were no eggs waiting to be laid.  It was just a regular goose that once in a while did something extraordinary, and he’d destroyed that steady flow of income.

Iran, Venezuela, and other oil-rich nations that make most of their money from oil exports are sitting on a gold mine.  They have something the entire world needs, and it’s done very well for them so far.  But with a little taste of extra money that came from hard times in America, they have decided that they just can’t give up their newfound wealth.  So instead of being wise about it and waiting for the next boom (which is inevitable), they’re trying to force other OPEC members to join them in forcing the prices back up so they can continue to live the uber-comfortable life they’ve come to know.

What they’re forgetting is that we’ve gotten a taste of it, too.  We’ve gotten a good taste of what high gas prices are like and we are not willing to go back to that.  What they don’t realize is that if they move to drive prices back up, we here in America will be driven to do the one thing that would destroy their goldmine: drill for our own oil and research alternative fuels, making ourselves far less dependent on them and sending them scrambling to find some way to make ends meet.  They haven’t clued in to the fact that when pushed, most people push back.  If they’d just sit back and enjoy what they have they wouldn’t have anything to worry about.  But threatening to make us pay through our teeth again?  Them’s fightin’ words, ya’ll.

Go ahead, boys.  Try to put the squeeze back on us.  We’ll just find another way to provide for our oil needs and send you back to being the sand rats you really are.  Your greed will be the death of you.