Over a Barrel

Bob Brinker had a really nice conversation last week with Raymond Learsy, author of Over a Barrel: Breaking the Middle East Oil Cartel, on the radio. Here are some of my favorite parts of Learsy‘s comments (edited for length but pretty much in sequence):

OPEC has manipulated the supply of oil to give us the impression that there is a shortage, and they have orchestrated a ratcheting up of prices with the help of the oil interests throughout the world and by our government as well.

OPEC is aware of the world’s oil requirements. They are aware that China and India are increasing their needs. Yet in a quarter of a century OPEC has made no effort to increase production for a very simple reason — they want us to believe that there is a shortage, they want us to believe that they are at capacity. And in making us believe that, they have paved the way for our accepting egregiously high prices.

We are not dealing with a free market here. We are dealing with a fixed market, and it’s time our representatives take this issue and deal with it for all the people in the country — not just the oil lobby.

We have to change. We have to take our destiny in our hands. OPEC has been effective in controlling supply, and in order for us to be effective dealing with OPEC, we have to control demand. Our market is as important to them as their supply is to us. We have to start thinking seriously about how we can contain our appetite for oil in a way that we can sit around the table with them and say, “Listen, you guys cut production, fine, we’re going to cut demand. Every time you cut one barrel of oil from your production, we are going to cut two barrels of oil from what we permit you to export into our country.” It’s going to require a lot of political courage and discipline, but we have young men giving their lives, and we have not lifted a finger to curtail our insatiable demand for oil.

That last sentence from Learsy is by far the most important part.

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4 thoughts on “Over a Barrel

  1. Really good point.
    I heard former Speaker of the U.S. House of Representives, Newt Gingrich, speaking on television on this subject and he went a bit further. He says we should have a national effort to eliminate oil as a source of energy in the U.S. by, I think, 2030. He said petrolium should be reduced to “plastic ore.” His point was a national effort, similar to The Manhattan Project or Project Apollo would scare the bejezes out of OPEC, and give us tremendous negotiating leverage, well before the project actually bore fruit.

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  2. Jim,
    A ‘Mid-America’ transportation company may have something interesting for 2006.
    If so, OPEC will not like this solution!

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