Monday, January 20, 2003

Tech Central Station has an article on a subject I've posted before: how oil and economics really intersect. For example, If the US gets 10% of oil from Saudi Arabia, and reduces its oil consumption by 10%, it does not eliminate its consumption of Saudi Arabian oil. It only reduces it by 10%. Oil is a commodity. The only way to not consume Saudi Arabian oil is by embargoing oil from that country. That wouldn't be very effective, because it would mean that only countries without an embargo would benefit from very-slightly-cheaper Saudi Arabian oil. Supply and demand are difficult to trick.

Embarrassingly enough, also in TCS today, Glassman suggests that "If Arianna [Huffington] is really concerned about U.S. use of Saudi oil or even foreign oil in general, she could support exploration in areas of the United States such as barren stretches of Alaska or off all three of our major coasts. Or she might try to encourage her friends to sell their 10,000-square-foot houses in Bel Air and live in apartment buildings. Or get them to stop flying in fuel-guzzling private jets." None of these things would significantly reduce use of Saudi oil (although it's true that changing SUV behaviour matters even less).

When a country allegedly sponsoring terrorism exports livestock, why doesn't anybody suggest reducing our consumption of meat? Because it would be riduculous, that's why.

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