U.S. economy's fate in Saudi hands

[DRW]

I know the title is a little inflamatory, as is the opening of the article, but one sentence caught my attention.

"If the Saudis allow oil prices to climb too high, then consumers will cut back on use, and energy alternatives will become sufficiently attractive to investors to cut into oil's share of the global energy market."

Here's a link to the article:
http://articles.moneycentral.msn.com...TheSaudis.aspx

Alternative fuels are not feasible yet due to their high cost. If oil prices keep going up then alternative fuels become more feasible. Maybe this is just the thing we need? I know that goes against popular sentiment, but if prices are driven up by high consumption and greed, then perhaps alternative fuels have a better chance of making it into the marketplace. Then there's a chance we can put our farmers to work growing corn for fuel, and less of our money goes to the Saudis while more remains in the US economy. OTOH the Saudis will most likely react by keeping oil prices just low enough to make alternative fuels less feasible. Will it happen? Or is all this talk of alternative fuels just a ruse to get OPEC to keep prices low?

Personally I don't know since I'm kinda new to the topic of the oil economy, so please be gentle!

[zpiloto]

In the US the oil production is going down every year and the importing is going up. We currently are importing just a shade under 60% of our oil. Of that only 21% or so comes from the Persian Gulf area. I think we get most of our oil from Canada and then Mexico. If OPEC raised priced we could cut back more from the Persian Gulf area and import more from this side of the hemisphere. I don't think the powers that be will let it get high enough for alternative energy to take off. Here's some more interesting reading.

[Matt Timion]

If people realized that we actually pay $10-15/gallon for gas (after our tax dollars pay to subsidize the oil companies) there would be a much bigger push for alternative fuels.

Apparent cheapness is all that Americans want. Reality is just too expensive.

[Silveredwings]

Very well said Matt.

[DRW]

Good stuff. I haven't had a chance to read all the related links yet, so maybe someone knows this the answer to this question;
What if we somehow manage to reduce oil consumption, which sources of oil would decline? Which sources of oil would remain at current levels?

A related question is; which sources of oil are more expensive than others?

[Telco]

I figure 3 bucks a gallon is the cutoff, over that gas is expensive enough in the States that other means of propulsion are cheaper. The real physical problem with going alternative is getting the infrastructure in place to support it. The real psychological problem with getting a miserly system in place is the people making a lot of money on oil aren't going to allow a cheap means of fuel to come about, even though cheap fuel is what is credited with the US becoming a super power during the first part of the 20th Century. A new, clean, supercheap fuel would allow another revolution in technology and prosperity in this nation to be shared by all. Unfortunately the ones making money off oil have forgotten that life is not a zero sum game where they have to lose for the common man to prosper. Wealth is there to be created, not simply transferred, and making it easier for everyone to get a little richer makes it easier for the rich to get a lot richer. If everyone's energy budget dropped to 10 percent of what it is today, that 90 percent currently spent on fuel would be spent on other goods or invested into the markets, which would drive up everyone's bottom lines.