Renewable energy, including biodiesel and ethanol are making the big oil producing countries nervous… and that’s got to be a good thing.
This story in the New York Times quotes Saudi oil minister Ali Al-Naimi as trying to dismiss alternative energy, while praising non-renewable petroleum as “an enabler of progress and prosperity.” He cautioned that the current economic crisis — and the uncertainties over future oil consumption — could force producers to trim their supplies, and hence could cause a new price shock.
Mr. Naimi also offered his strongest public criticism against the drive for alternative fuels — which he referred to as “supplemental” energy — and the inconsistent policies of consuming countries. Although he never once mentioned either the United States or President Obama by name, these were clearly his targets.
But the readers of the Times aren’t buying this oil prince’s faulty logic. From the comments section of the article, I found that most people dismissed Al-Naimi’s argument almost as quickly as he dismissed the viability of biodiesel and ethanol.
When a seller is driven to praising his product the only thing it tells us is that he is looking to sell more of what he has to offer. The Saudis have far far more to lose from declining oil production than the world at large has to lose from any lack of flexibility in energy supplies.
Pretty obvious he is going to try to scare people into using oil for centuries to come. The thing is right now it is supplemental for the most part but as technology increases his oil will basically not be worth anything because no one will really have large scale uses for it in the United States and a few other countries.
To me this is as unconvincing as it is unsurprising. Not that anyone can really blame him for making the pitch. It is only natural to fight for the survival of his country’s largest export and influx of capital, but that does not change the fact that oil is a finite resource and its use should begin declining.
Hmmm… nervous foreign oil producers worried that they’ll be replaced by American farmers. I like the sound of that!