T. Boone Pickens is trying to pay off OPEC to cut production. That should raise oil prices and help his campaign to move US energy sources to wind and natural gas. Then Pickens can make money on those huge windmill fields that he owns down it Texas.
Even a billionaire like Pickens does not have the cash to change OPEC’s mind. If the cartel has any sense it will cut production to make money on higher oil prices. Who would pass up a cash windfall which is nearly guaranteed?
If OPEC does whittle down supply, it will be a great favor to the average US citizen.
The sucker play of falling gas prices and a drop in heating oil caused by an improving supply of crude is that it will cause some people to go back to using fuel. Driving a car will not be so awfully expensive. Keeping indoor temperatures at the home and office at 75 degrees will at least not bankrupt everyone who does not want to wear a sweater.
No one in the US who is walking around on two legs thinks that high oil prices are good. They can shake their fists at Saudi royalty and Venezuela’s mentally unstable president Huge Chavez. But, oil producers are only doing what they should. They drill oil to make money. They want to be more like the US with its millions of miles of roads and consumers who can afford Hummers and beach houses.
If OPEC can get oil back over $125 a barrel and stay there, the US, Japan, China, and India may have reason to look to alternatives whether they be solar power, wind, or the return of the rickshaw.
Over time, OPEC may be cutting its own throat by chopping production. If it speeds the day of energy independence in consuming nations it will undermine the financial future of producing counties. But, by then members of the cartel may have bleed their fields dry and rue the day that they left money on the table.
Douglas A. McIntyre
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