Oil and Alternative Energy

Oil companies are in the news again. Their executives claim that they don't control the price of oil, but there is a remarkable correlation between spiking gas prices at the pump and huge oil company profits.

When oil companies' stock prices rise, alternative energy stocks often do the same. I must be naïve because I always think that the Wall Street gurus have finally had a revelation, that the powers that be realize there is a crisis brewing. But when oil prices decline, alternative energy stocks also go down. The mini-crisis is over. No need to think long-term.


President Bush talks about reducing America's dependence on foreign oil. Since foreign oil revenues can flow to terrorists, this seems good for his "War on Terror." His strategies include invading oil-producing countries and drilling in pristine wilderness areas rather than encouraging alternative fuels, mass transit and reduced consumption of oil. More short-term thinking.

Perhaps he should heed the words of Sheik Ahmed Zaki Yamani, someone who knew much about oil and energy. He was the spokesman for the Organization of Petroleum Exporting Countries (OPEC) during the 1970s and was Saudi Arabia's oil minister from 1962 to 1986. Here's a quote from Sheik Yamani:

"OPEC has a very short memory. It will pay a heavy price for not acting in 1999 to control oil prices. Now it is too late. The Stone Age came to an end not for a lack of stones, and the Oil Age will end but not for lack of oil. Technology is the real enemy of OPEC. Technology will reduce consumption and increase production from areas outside OPEC. The real victims will be countries like Saudi Arabia with huge reserves, with which they can do nothing. The oil will stay in the ground forever."

-- Paul Michael Wihbey,

US Army War College, March 12, 2001
http://www.jinsa.org/articles/print.html/documentid/1176