I loved this article from The Economist. It provides a completely different viewpoint of the current oil situation than I’ve heard any where else and brings up some great points regarding the past and future of oil production. I highly recommend you take the time to read it, my favorite parts below.
The article makes an interesting point. One of the results of the 1973 oil crisis was the Arab boycott of exporting oil to the West. This tripled oil prices but “also prompted oil exploration in tricky places…and conservation measures to reduce demand.” Despite the fact that they will be making around double compared to last year, a worldwide slowing of the economy and a incresased push for alternative energy are two very bad things for Saudi Arabia, the largest supplier of oil to the West. If the world finds alternative ways of replacing costly oil then the Saudis lose their trump card on the world. Good for Saudia Arabia for remembering what happened last time (+1 for history) and an interesting look at the current world economic situation.
The other part of the article that is troubling/interesting is this:
Saudis retain another nasty memory from the 1970s. Branded as gluttons, they became a stock figure of ridicule in Western cartoons. And sudden wealth brought social strains at home that helped create a fundamentalist backlash that produced, among other things, al-Qaeda.
I feel like western media paints the picture that oil producing countries are making more money than they know what to do with and have no worries at all. We’re lead to believe that high gas prices can only mean good things to the oil producing nation. Yet according to this article, things are a bit more complicated than that. History shows that these high prices can cause many auxillary effects (other than “green” being the buzzword of the year) that will stick around for years to come. I’m sure it would be pretty tought to find a direct correlation between the energy situation in the 70’s and the forming of al-Qaeda, but it seems reasonable to believe it didn’t help.
Hopefully this time we can come out of this with hydrogen flying cars that shoot out water and people that actually stick with conservation even after oil prices stablize.
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