Is OPEC Losing It?
The president of OPEC still has not offered an explanation for his bizarre claim that ethanol is responsible for 40 percent of the rise in oil prices.
One thing is undeniable: Biofuels add to the world’s fuel supply — and one needs only to have sat through the first day of Economics 101 to understand that more supply means lower prices.
So we are left to wonder:Was he lashing out at the competitive threat posed by biofuels? (He did, after all, refer to the growth of ethanol as an “intrusion” on the oil market.)
Was he intentionally floating a big, bold lie just to see if anyone would believe it?
Or was he simply trying to divert attention from OPEC’s own culpability for high oil prices? (There are good reasons to question both OPEC’swill and ability to increase production and lower prices.)
Maybe it was all of the above. The links below offer good insights.
Sources:
Open Letter to the President of OPEC from the World’s Biofuels Industries.
National Review. “Disinformation Age,” by Clifford D. May. July 17, 2008.
Fortune. “OPEC’s empty toolkit,” by Brian O’Keefe, July 16, 2008.
Reuters. “Venezuela’s Chavez says oil could reach $300.” Jul 14, 2008
