Fueling debate.

• Author: Singer, Max
• Position: Letters - Letter to the Editor

The article "The New Geopolitics of Oil" (Special Energy Supplement, Winter 2003/04) by Joe Barnes, Amy Jaffe and Edward L. Morse, unfortunately contains a good deal of old, in-the-box thinking, as well as a strange fascination with what they call "neoconservative" policy.

They use the old chestnut that Saudi Arabia has a quarter of global petroleum reserves. This would be a reasonable estimate for "conventional" oil. But conventional oil is an outdated category from the time that unconventional oil, principally Canadian tar sands and Venezuelan heavy oil, could not be produced at competitive costs. Including "unconventional" oil, the Western Hemisphere has more reserves than the Persian Gulf region. While Persian Gulf oil mostly costs much less than $15 per barrel to produce, there is not enough very low cost oil on the market to keep the price below the current cost of unconventional oil.

They stress that the key element of Saudi oil power is the ability to expand production by 1.9 million barrels per day (BPD). But they ignore the fact that the OECD countries also have the possibility of putting an additional 1.9 million BPD into the market from their strategic stockpiles. This can dramatically affect the great fear that the Persian Gulf oil producers might someday shut their spigots and leave the West without the oil on which we have become dependent. OECD storage is enough to enable the world to do without Persian Gulf oil for about half a year. Can the Persian Gulf countries do without the dollars they get from selling oil for...