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It is what could easily happen, if we are successful is slapping sanctions on Iran, and Iran then follows through with its promise to cut off its oil (Iran is the second biggest oil exporter in the world, after Saudi Arabia), the price of oil will eventually shoot through the roof.
Actually, I dont see that as such a bad thing. If this scenario plays out, it will definitely have some posititve impacts, although we will definitely be facing a worldwise economic slowdown of major proportions.
1) The Alberta tar sands, currently under development, will see an increased acceleration in oil production. I dont know if any of the rest of you saw 60 Minutes on Sunday, but the geologists interviewed stated that, with today's technology, 160 billion barrels of high-grade oil, without the sulphur, can be obtained from the tar sands, and that with future technology that is conceivable within the next decade, that figure jumps to 2 trillion barrels. Since Saudi Arabia's reserves are about 220 billion barrels of oil, they will become irrelevant. Sure, we will still be getting most of our oil from foreign sources, but they will at least be from friendly nations, which do not have potential political crises which could disrupt supplies. It is true that mining the oil in Canada is a dirty business, producing pollutants at a much higher rate than conventional oil exraction and refining. However, unlike our government, the Canadians are very serious about pollution standards, and say the have the technology to reduce emissions to acceptable levels. Bottom line - Canadian oil will be plentiful throughout most of this century, once production is ramped up.
2) I listened to an interview with Nick Lampson today on the radio. He has been pushing for the manufacturing of high quality diesel fuel from soybean oil. This is very feasible, once oil prices go above $70 per barrel..... Oops, they just did. How about this idea? Instead of paying farmers to grow nothing, how about paying them to grow soybeans?
3) With oil prices ridiculously high, the development of other alternative fuels, and other alternative methods of producing electricity, will be practically a cinch.
4) With high oil prices, we will have no choice but to conserve. People have a habit of ignoring problems until those problems become very painful economically. Yes, it will hurt, and as a result, we will begin doing what we should have started doing decades ago - Weaning ourselves off of oil dependency through Conservation, coupled with the development of alternative fuels. The EPA already took the first step last year with their mandate of 13 SEER air conditioning systems to replace the old 10 SEER standard. This alone will eventually save 29 percent on electricity use for the purposes of air conditioning, as older systems are replaced by new ones. By itself, this translates into a lot of power plants which wont have to be built. And like it or not, higher CAFE standards are in the near future for us, as well as an acceleration towards hydrogen fuel cells as the primary fuel for transportation.
5) Finally, the cost of trying to be the world's policeman will be too high. Higher oil prices means that we will not succeed in our drive to become the lone world superpower. This also means that no other nation, such as China, will have a chance to become the lone power either, in the distant future. The multi polar paradigm will apply, which will be a more stabilizing influence in the world.
All in all, while there will be much short term pain, not only for us and Iran, but the rest of the world as well, in the long term, this could be a good thing, and is why I am in favor of it.
Let the trade war with Iran begin.
Article is here.
Actually, I dont see that as such a bad thing. If this scenario plays out, it will definitely have some posititve impacts, although we will definitely be facing a worldwise economic slowdown of major proportions.
1) The Alberta tar sands, currently under development, will see an increased acceleration in oil production. I dont know if any of the rest of you saw 60 Minutes on Sunday, but the geologists interviewed stated that, with today's technology, 160 billion barrels of high-grade oil, without the sulphur, can be obtained from the tar sands, and that with future technology that is conceivable within the next decade, that figure jumps to 2 trillion barrels. Since Saudi Arabia's reserves are about 220 billion barrels of oil, they will become irrelevant. Sure, we will still be getting most of our oil from foreign sources, but they will at least be from friendly nations, which do not have potential political crises which could disrupt supplies. It is true that mining the oil in Canada is a dirty business, producing pollutants at a much higher rate than conventional oil exraction and refining. However, unlike our government, the Canadians are very serious about pollution standards, and say the have the technology to reduce emissions to acceptable levels. Bottom line - Canadian oil will be plentiful throughout most of this century, once production is ramped up.
2) I listened to an interview with Nick Lampson today on the radio. He has been pushing for the manufacturing of high quality diesel fuel from soybean oil. This is very feasible, once oil prices go above $70 per barrel..... Oops, they just did. How about this idea? Instead of paying farmers to grow nothing, how about paying them to grow soybeans?
3) With oil prices ridiculously high, the development of other alternative fuels, and other alternative methods of producing electricity, will be practically a cinch.
4) With high oil prices, we will have no choice but to conserve. People have a habit of ignoring problems until those problems become very painful economically. Yes, it will hurt, and as a result, we will begin doing what we should have started doing decades ago - Weaning ourselves off of oil dependency through Conservation, coupled with the development of alternative fuels. The EPA already took the first step last year with their mandate of 13 SEER air conditioning systems to replace the old 10 SEER standard. This alone will eventually save 29 percent on electricity use for the purposes of air conditioning, as older systems are replaced by new ones. By itself, this translates into a lot of power plants which wont have to be built. And like it or not, higher CAFE standards are in the near future for us, as well as an acceleration towards hydrogen fuel cells as the primary fuel for transportation.
5) Finally, the cost of trying to be the world's policeman will be too high. Higher oil prices means that we will not succeed in our drive to become the lone world superpower. This also means that no other nation, such as China, will have a chance to become the lone power either, in the distant future. The multi polar paradigm will apply, which will be a more stabilizing influence in the world.
All in all, while there will be much short term pain, not only for us and Iran, but the rest of the world as well, in the long term, this could be a good thing, and is why I am in favor of it.
Let the trade war with Iran begin.
Article is here.