Reducing Oil Consumption Increases Dependence on Mid-East Oil
An excellent counterintuitive point that I had not though of before from Megan McArdle:
Moreover, cutting our consumption of oil will not do anything to reduce our dependance on oil from the Middle East…. If we cut world consumption back to 20 million barrels a day, we would be totally dependent on Middle Eastern oil, because they’re the low-cost producers–it takes, if I recall correctly, less than $5 a barrel to pull oil out of the ground in Saudi. The Middle East will be the last place to close the taps. The more we cut world consumption, the more dependent we’ll be on crazy Middle Eastern governments. Those governments might not be as rich. But we’ll still need them just as much, as long as oil remains critical.