HI all,
Saw this article:
Opinion | A Good Question - The New York Times
quote:
AN e-mail came in the other day with a subject line that I couldn’t ignore. It was from the oil economist Phil Verleger, and it read: Should the United States join OPEC? That I had to open.
From one direction, he says, we’re seeing the impact of the ethanol mandate put in place by President George W. Bush, which established fixed quantities of biofuels to be used in gasoline. When this is combined with improved vehicle fuel economy in July, the auto industry agreed to achieve fleet averages of more than 50 miles per gallon by 2025 it will inevitably drive down demand for gasoline and create more surplus crude to export. Add to that, says Verleger, the increase in oil production from offshore fields and unconventional sources in America, and that exportable U.S. surplus could grow even bigger.
Then, add the recent discoveries of natural gas deposits all over America, which will allow us to substitute gas for coal at power plants and become a natural gas exporter as well. Put it all together, says Verleger, and you can see why America will want to consider joining with other energy-exporting countries, like those in OPEC, to sustain high oil prices. Such an effort would support domestic oil and gas production and give the U.S. a real competitive advantage over countries forced to pay high prices for imported energy nations such as China, European Union members, and Japan.
A higher price for oil also makes it economical to use more marginal reserves where cost of extraction is higher (Canadian oil shale\sands for instance)
Also change heating from oil to natural gas (or gas generated electricity) and the demand for oil goes down.
But it needs to be done smartly to preserve ecologies.
Enjoy.
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