Friday, June 02, 2006

Energy: The Master Resource


A very interesting read, this book, "Energy: The Master Resource." Finally, a scientist who also understands free-markets! I really enjoyed the chapter on the economics of energy, and how oil, and most energy, is now a global marketplace. The author's point is if OPEC decides not to sell oil to us, some say we will have a huge energy crisis and economic collapse, but they show how this is simply more economic ignorance. Instead, if OPEC sells to others, such as European countries and clients, most likely be undercutting the prices those folks are paying, then the oil exploration companies who had been selling to them will need a new client, such as us. And it could actually drive down prices. Worldwide prices tend to be the same, whether or not a country is self-sufficient (England) or not (Japan) for the simple economic reason that if Japan paid more for oil, then companies would shift their sales to Japan to get the highest price for their work. In turn, this would drive prices down there. That is what globalization is all about.

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