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Originally Posted by BigBen931
When an economist tells you "don't worry, it all works out in the long-run" I hereby give you permission to kick him/her in the junk.
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Technically, OPEC is a cartel - a specialized form of oligopoly. But that's just getting technical.
Now, as for the economics-based assumptions (because, after all, I'm an economist - BA from Elizabethtown College, MBA from Wharton), I'll keep it simple. I had the oppurtunity to meet with Dr. Massood Samii of the University of Southern New Hampshire last week. Dr. Samii was the former chief economist for OPEC.
As it stands right now, the price of oil will continue to go up. Most likely, it will peak around $80 or so per barrel (USD). Gas prices, then, will probably end up at about $5 or so a gallon. Now, this is going to happen over the course of several years (my prediction is around 2008-09 or so). By then, technology will have adapted in order to produce low-oil consuming machinery and cars.
Up until now, there has not been a need to create such low-consumption equipment. There simply hasn't been enough money in it. Now that oil prices are going to skyrocket - guess what? Yep, there's gold in them thar hills.
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Originally Posted by jorgelito
You don't like it? Boycott it!
But truth is, no one will. We're too passive, weak minded; we assume our Prez will take care of things. That's the real terrorism.
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Um, excuse me? Look at the numbers there, guy. Even if 50% of all Americans stop driving cars, the oil industry faces nothing but a slight blip on their radar screen. All OPEC needs to do is cut their supply level down another notch, and boom, prices are up again.
OPEC's capacity for producing oil has not changed since the 1970's. World demand, however, has skyrocketed. So what are we going to do?
There's a few options. The most likely one is that we do nothing. In reality, there's nothing
to do except live with it. Bottom line gas prices in Europe are the same as the US, their nations just tax the hell out of it. Anyway, the most reasonable solution is to just take the oil prices like men and go out and research more fuel-efficient devices.
Second, and less attractive, option would be to use US oil. Problem is, right now turning US oil into gasoline would be far more expensive than using OPEC controlled oil. We don't have the right type of crude to make gasoline cheaply.
Third would be to break up OPEC baby-Bell style. The only problem is...well,
who the hell are we to tell an international corporation how to run their freakin' business?!?! We can't go out, all big-bully style, and tell them to break up or else. That, jorgelito, is terrorism.
So, what are we going to do? Truth is, we've got only one real option - research. Once good, powerful, non-gasoline (or low gasoline) engines are made, we'll be on our way home (personally, I refuse to drive a car with less than 220hp/250lbft torque). That will decrease demand for oil, which will thus decrease price (on the aggregate). OPEC can only lower their supply so far before they go bankrupt.