OPEC wants the big oil consuming countries to promise not to spend too much money on alternative fuel development and nuclear energy. The oil producers are afraid that this would take away demand for crude down the road.
Seriously. No one would make this up.
So, China and the West should give up programs that would make them less oil dependent. According to the FT "some Opec countries are worried such moves could jeopardise future demand just as they embark on expansion plans.
It would be laughable if it were not true.
The OPEC argument is that, if demand falls in the future, all of the money they may spend on infrastructure now will be wasted.
The OPEC point of view fails to take into account the hundreds of billions of dollars they have made as crude has moved from $50 to $100 a barrel. It also avoids a discussion of how much more OPEC will make if crude stays around $100.
The West knows that it will take decades for bio-fuel initiatives and nuclear power to make a dent in oil demand. Building a new reactor in the US is at least a 20 year project when federal and state approvals are built in.
OPEC knows all that. But, it has the big demand countries over a barrel.
Literally.
Douglas A. McIntyre
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