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Jeff Chiu/AP
A woman walks past the price board at a Shell gas station in San Mateo, Calif., Tuesday,
June 10, 2008. (AP)
A woman walks past the price board at a Shell gas station in San Mateo, Calif., Tuesday,
June 10, 2008. (AP)
As Energy Prices Soar, World Leaders Meet in Saudi Arabia
by
Josh Katz
Oil-producing nations meet Sunday in Saudi Arabia to discuss pricing, responding to requests from around the world that something must be done to curb inordinate oil prices.
30-Second Summary
Tension over oil prices appears to be reaching the boiling point. Oil-consuming nations have been calling for OPEC to increase oil production for some time, and now Saudi Arabia has indicated that it will probably do so.
Saudi Arabia called the Jeddah meeting to discuss how to handle the 40-percent increase in oil prices that has occurred in 2008. Gas is now pushing past $4 a gallon in the United States, and that number is higher in Europe thanks to lofty gas taxes.
Recently, presidential candidate John McCain said that the ban on offshore drilling should be lifted to alleviate the energy crisis. President Bush announced his support for the same idea on June 19, saying, “there is no excuse for delay.”
Many Democrats have opposed the idea of offshore drilling, calling it a temporary solution that will not solve the energy crisis in the long term. They have sought investments in alternative sources of energy, and on June 17 Senate Democrats targeted OPEC and said the United States should file a complaint against it.
The issue of suing OPEC for monopolistic practices and price fixing has received attention lately, and The New York Times and the Los Angeles Times both published op-eds on June 19 with the same title: “Sue OPEC.” Both pieces argued that the United States could and should sue OPEC under antitrust laws for keeping prices so high.
But Mark Thoma, in the Economist’s View blog, contends that suing OPEC would serve only as a band-aid for the energy crisis.
Saudi Arabia called the Jeddah meeting to discuss how to handle the 40-percent increase in oil prices that has occurred in 2008. Gas is now pushing past $4 a gallon in the United States, and that number is higher in Europe thanks to lofty gas taxes.
Recently, presidential candidate John McCain said that the ban on offshore drilling should be lifted to alleviate the energy crisis. President Bush announced his support for the same idea on June 19, saying, “there is no excuse for delay.”
Many Democrats have opposed the idea of offshore drilling, calling it a temporary solution that will not solve the energy crisis in the long term. They have sought investments in alternative sources of energy, and on June 17 Senate Democrats targeted OPEC and said the United States should file a complaint against it.
The issue of suing OPEC for monopolistic practices and price fixing has received attention lately, and The New York Times and the Los Angeles Times both published op-eds on June 19 with the same title: “Sue OPEC.” Both pieces argued that the United States could and should sue OPEC under antitrust laws for keeping prices so high.
But Mark Thoma, in the Economist’s View blog, contends that suing OPEC would serve only as a band-aid for the energy crisis.
Headline Link: ‘In Saudi Oil Output Discussions, The Old Clout Will Be Missing’
Saudi Arabia called a meeting to discuss the rates of OPEC’s oil production, which will be held this Sunday. “But some OPEC countries, particularly Iran, have spoken out against the Saudi push to unilaterally raise output, saying that such a decision should be left to the group and that the market doesn’t need additional supplies,” The Wall Street Journal reports.
Source: The Wall Street Journal (free subscription may be required)
Background: ‘Energy Fears Send Dems, GOP In Opposite Directions’
Democrats and Republicans have differed over how to deal with soaring oil prices. Republicans have pushed to expand drilling while Democrats call for greater investment in alternative forms of energy. On Tuesday, 11 Senate Democrats said that the government should file a World Trade Organization complaint against OPEC.
Source: Investor’s Business Daily
Opinion & Analysis: Suing OPEC
Sue OPEC
In the Los Angeles Times, three law professors argue that the United States should sue OPEC under the Sherman Antitrust Act. According to the op-ed, “OPEC may call itself an ‘organization,’ but everyone knows that it is, pure and simple, a cartel that manipulates markets, restricts output and fixes prices.”
Source: Los Angeles Times (free registration may be required)
Thomas W. Evans, a former adviser to Presidents Ronald Reagan and George H.W. Bush, writes, “If the president allowed the states to sue OPEC, his actions would undoubtedly anger political leaders in the Middle East and create the need for diplomatic initiatives to limit the fallout. But how stable is the Middle East right now? And isn’t starting a lawsuit better than starting a war?”
Source: The New York Times (free registration may be required)
Suing OPEC not the answer
In the Economist’s View blog, Mark Thoma of the University of Oregon’s Department of Economics, argues that suing OPEC wouldn’t solve high oil prices: “Even if monopoly power is a factor, it’s unlikely it’s as important as the growth in world demand.” He goes on to say that, “At some point we have to face that things are changing,” and we must “face reality and devote the resources and effort needed to fully investigate and develop alternative energy sources.”
Source: Economist’s View
Related Topics: The energy crisis’ long reach
As gas prices rose in Europe, laborers and small-business owners expressed their dissatisfaction, according to a May 30 article from findingDulcinea. In England, truckers and other protesters sent a petition to British Prime Minister Gordon Brown on the matter.
Source: findingDulcinea
On June 9 findingDulcinea wrote: “If you think the gas for your car has gotten expensive, just wait till you see the price tag for a new set of tires. Or a car seat. Or a host of other items that, because oil is used in their manufacturing process, are seeing corresponding price increases.”
Source: findingDulcinea
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