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Originally Posted by DieselAddict
I see, but that's if the alternative energy business is already well established. A big drop in oil could easily put alternative energy out of business, especially while still in infancy. Consequently SA cuts production and oil prices skyrocket again... back to square one. Lots of economists are now proposing an oil price floor for this reason.
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Let's say KSA acts as you say and we go through repeated cycles of high and moderate oil prices. Let's say we want to moderate the impact of a single-source producer dramatically impacting the market.
How about -- develop alternative sources of energy? Like ... drilling for oil. developing nuke power. Wind. No single source will do it. But a broad-response might do it. Who knows?
If there are a large number of alternative sources such that KSA no longer controls market price then the market returns to supply/demand rather than cartel-based pricing.
None of it requires a national response other than getting the f**k out of the way of entrepreneurs and financial risk-takers. You know who they are, right? Speculators! Demon Spawn!
That's where capital comes from. No capital, no entrepreneur. No entrepreneur, no innovation. Maybe someday the government will figure it out.
B