OPEC apparently worried about US ethanol moves
Here's a political hot potato. According to SeekingAlpha, a stock market opinion and analysis site, the Secretary-General of OPEC has taken a stand against American and European ethanol plans, warning that the moves will send oil prices "through the roof." Abdalla El-Badri said that the move to make more ethanol means "you don't get the incremental oil and you don't get the ethanol." (huh?)
SeekingAlpha's Todd Sullivan takes this, OPEC's first public concern over biofuels, to be "proof positive that oil production is currently at a peak level. If OPEC could, it would flush the world with oil, dampen its desire for alternative sources and make them less profitable. The fact that they haven't means they can't."
I always try to take information from investment sites with a huge helping of salt, because I just don't trust them (I have nothing against SeekingAlpha in specific, mind you. I just never know what their motives are, especially in the green energy field). But what do you think? Is Sullivan on to something here? Is OPEC actually worried we'll put a dent into their profits with ethanol (something not even the biofuels strongest supporters are saying will undoubtedly happen)? I'm interested to hear our readers' takes on this.
[Source: Seeking Alpha]
Reader Comments (Page 1 of 1)
Joseph 3:16PM (6/11/2007)
Of course OPEC is concerned about bio-fuels, they just can't do much about it. I mean, it's not like OPEC will have some evil, coniving plan to destroy the world so they can make how many billions of dollars. (BWAHAAHAA!)
The only thing OPEC could do is try to convince people that biofuels are bad...which probably won't work since the only people I have heard of who are against biofuels, are against really just against ethanol.
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UpstateWonk 3:17PM (6/11/2007)
this is so stupid! They don't flood the market with oil because they need the price of oil to stay around 60+ not because they can't...of course they can this green-tard doesn't understand peak oil...
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UpstateWonk 3:39PM (6/11/2007)
don't get me wrong i think alt energy is the best thing since solar baked sliced bread...
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Tim 4:01PM (6/11/2007)
Wow. OPEC is stuck between a rock and a hard place. Allah be praised.
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George Krpan 4:38PM (6/11/2007)
Absolutely, they can't increase the supply as they have in the past because......they can't.
It's a significant event, the first inconcealable, undeniable, overt evidence that they've reached peak production.
It really shouldn't come as a surprise. It's long been known that they've been pumping seawater into Ghawar, the worlds largest oil field.
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Ron Fischer 5:15PM (6/11/2007)
By saying "You don't get the incremental oil" he means investment in increased production is discouraged by increased ethanol. What he means by "you don't get the ethanol" is open to interpretation. This would be the softest evidence one could imagine for an oil production peak. But investment companies run on exactly these kind of sketchy guesses...
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COINTELPRO 5:22PM (6/11/2007)
OPEC is not worried since the oil companies will resist alternative fuels at thesir gas stations. Oil companies potential profit selling E85 is lower since it is dominated by agri-business. Quick Electrical Charging stations will be delayed since they can only make a retail profit versus extraction/refining/retail profits.
Oil companies will resist alternative fuels by blocking their availability at the thousands of prime locations they control. The conspiracy theorist should stop saying that oil companies will buy patents.
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David Beach 10:12AM (6/12/2007)
Bio-fuels do concern OPEC so does decovery of new oil fields in non OPEC countries. The real problem is stated in the post about oil companies. They controll about 50% of US retail distribution and have NO INTEREST in selling E-85 or Biodiesel. The expense in estaplishing a reliable retail network for Biofuels is high ( about $8,000.00 a pump) so it will take a huge investment by companies that are not oil company rich to make a serious dent in gasoline consumption. OPEC has some thing to worry about but it will take a long long time for them to feel any pinch.
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mr friggles 1:47PM (6/12/2007)
Anybody else fall of their seat reading this. Opec doesn't "flush the world with oil"....because "they can't". WWWWWHAAA??? Maybe its because they want to maintain profits at a certain margin AND the oil companies have closed refineries specifically so the world can't be "flushed with oil".
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