13 thoughts on “OPEC”

  1. Good article but there is a better plan and the EPA can’t do a damn thing about it.

    Methanol Fuel Cells

    Idatech over ten years ago designed a really nice reformation system to turn methanol into hydrogen for fuel cells. It would be about 30% more efficient than a carnot cycle (otto or Atkins) engine.

    Ballard Power bought idatech a couple of years ago so the tech is there to use…..

    1. That doesn’t actually help as much as you’d think. Gas and oil are fungible commodities on a global scale. When the price of oil is high due to OPEC collusion the price of natural gas also shoots up. Being an exporter of natural gas doesn’t help either, ask the Canadians about gasoline prices, because again it’s a global market. Without some sort of price controls, which would be bad, the best option is to get rid of the oil cartel that’s been manipulating supply and prices for the last several decades.

    1. Cartels are a result of collusion within the market. They eventually fail, if the market is allowed to function properly.

      If the market is not functioning properly, it is usually because the government strong-arms the cartel’s competition. They usually do this under the guise of “fairness.”

      Read the history of Roosevelt’s price controls on the tire industry. Before he fixed the price, we had several tire companies. After price control it dropped to three.

      1. Consolidation is also the natural effect of market maturity.

        As companies hit economies of scale, they begin dominating the best markets and
        squeezing out the other players, leaving undesirable niches to smaller players.

        Of course international trade also allows foreign entrants to come into the market.
        At tirerack.com i see some 20 brands, wether they are all distinct companies, i don’t know.

    2. OPEC is a production-fixing cartel which is the very opposite of the market. Throughout it’s history, OPEC has sought to maximize oil prices by imposing limits on production. We’re fortunate that so many OPEC nations have not abided by the production limits or oil prices would’ve been much higher all along.

  3. Break it?

    It’ll break itself, to the extent it hasn’t already done so.

    None of the players really respect the quota requirements, which are all that makes the cartel work.

    And with so many major producers (Russia, Canada, increasingly the US) not in the cartel, it’s not really necessary to actively “break” it.

    It’s not 1973 anymore; OPEC doesn’t have the power it once had, not remotely.

    dn-guy: Yes. And breaking a cartel is equally an action of the market – though as e.g. Rothbard would point out, cartels are inherently unstable and tend to – as OPEC has – break price or production discipline all on their own, and collapse.

    1. classical economic theory says no cartel can last as long as new entrants can come in or new technology
      substitute. The Railroads were a cartel for a long time, then Cars, busses and airplanes broke their monopoly
      and it took 50 years for the railroads to recover.

      The big carriers dominated certain markets (AA, Braniff,) out of dallas, (DFW) so Southwest began flying
      out of Love Field and into the Texas market (San Antonio, Austin, Houston) places the big carriers didn’t
      want to serve.

      If you dislike OPEC, one can execute consumer choice by putting a Solar Thermal system on the roof of your house and getting PV arrays and an electric car.

      Rand should talk about consumer choice and the market, if he really believed in this.

      1. If you dislike OPEC, one can execute consumer choice by putting a Solar Thermal system on the roof of your house and getting PV arrays and an electric car.

        Rand should talk about consumer choice and the market, if he really believed in this.

        What a shock. Another economically idiotic comment from the village idiot.

  4. The OPEC nations are mostly those with the older and larger production oil fields, non-OPEC from more recently developed younger fields, though changing technology is likely to increase the cartels ability to produce oil, it would be a mistake to think that the flat production of the cartel is entirely down to politically restricting production rather than geological considerations.

    1. I’m not sure what your point is. OPEC was around forty years ago, when the middle eastern fields were flush with oil.

  5. I always thought that the major danger of methanol was that its flames are generally not visible to the naked eye, leading to all sorts of problems for pit crews of racing teams and others handling the fuel. The advantage, of course, is that methanol fires can be put out with water, but storing the fuel as a liquid in a garage for use in a lawnmower, etc., just seems like a bad idea to me.

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