by Tyler_JC » Thu 13 Dec 2007, 16:16:40
$this->bbcode_second_pass_quote('Lanthanide', '
')So you think the Venezuela people will just shrug and go "oh, ok, send all that oil overseas, and we'll all descend into poverty so America can keep its way of life"? Why do you think oil is so cheap there right now as it is? Political demand.
If whoever is in charge of Venezuela ramps up the local oil prices to high, no matter how logical and sensible it is, they could end up out of the job, to be replaced by someone else who doesn't give a crap about exporting oil and just wants to keep it for the country itself. If this means the price for oil inside the country go up by only 50% (on 20c) instead of 300%, while the price for exported oil goes up 30% (on $3) - at least Venezuela wouldn't be suffering as much as everyone else.
This, I think, is the biggest worry - natural declines, that eventually lead to a political situation that dramatically reduces output over a short period of time. The markets simply have no way to adjust to something like that without causing pain.
Who said the transition has to be pain free?
The argument was never cornucopia or collapse. This was a false choice created to discredit the optimists.
With the except of a few posters, everyone agrees that current trends are unsustainable.
That's why trends will change.
As for Venezuela, look at Nigeria. They export plenty of oil and keep their people in poverty. Sure, there is some civil unrest but it is a net win for the owners of the oil.
If making the population happy costs $10 billion but the lost oil revenue from an unhappy population is $5 billion...which option would you choose?
Moreover, they don't even have to choose! They can export oil at high prices and then spend the money on public transportation. This would develop Venezuela's economy, provide jobs/transportation, and allow them to continue getting hard currency.
Oil for transportation is not a necessity. Just because the world currently chooses to burn oil to move massive steel contraptions around doesn't mean it needs to.