Meet Your Dealer

The Saudi oil minister wants to keep you addicted to his product.

So he's seeking the golden number -- the price at which oil is cheap enough that Americans don't shift to electric and alt-fuel vehicles, and expensive enough that the Saudi Royal Family can continue to run the Kingdom on the profits.

The Saudis learned in the 1970s that using "the oil weapon" was bad for business. OPEC nations embargoed sales of oil to the U.S. for its support of Israel; Americans waited in long cars on long lines to buy too-expensive gasoline; and suddenly Americans started buying little Japanese cars that got good gas mileage. The Big Boat American car died. OPEC nations' sales plummeted.

Until the 1980s, that is, when OPEC kept prices low, leading President Ronald Reagan to kill federal funding and support for alternative fuels and alternative-fuel vehicles, like the electric car.

When gas prices are low Americans buy bigger and bigger cars. And when gas prices are high, Americans buy smaller cars. It's happening again now -- high gas prices lead directly to Hummers up on blocks in driveways across America. But now oil prices are coming mysteriously down. A Gulf executive predicted $1 per gallon gas early next year. The Saudis want to bump the price up, to $55 per gallon. Iran and Venezuela want to keep the price higher. Likely the Saudis want to keep the price lower both to keep Americans in the oil market and to maintain its strategic dominance within OPEC over Iran, especially -- which the Saudis consider a major strategic opponent. If the Iranians are kept cash-poor, they're not a threat to the Saudis.

If oil prices are so high that we move to something else, none of them are a threat to America (though they'll have to rebuild their economies on more sustainable product).

In this excellent piece from 60 Minutes, Lesley Stahl pokes around the kingdom, and the Saudis' efforts to ensure that King Oil remains King -- particularly by megaindustrializing once untenable oilfields, like Shayba, which lies under mountains of shifting sand.

The Saudis are a bit tone deaf here. They are gloating about how much oil they are going to be able to produce from these new fields -- and their operation is impressive. Stahl compares it to the construction of the pyramids.

But it is a gleaming steel disaster.

They're thinking we're so blind in our addiction that we forget that all that oil -- 200 billion barrels in Shayba -- will be burned into the atmosphere, a disaster for life on earth; and that the Saudi Royals, to preserve the stability of their rule, used those fat profits to export militant Wahhabism -- to Afghanistan, Pakistan, Sudan.

Are we so addicted to their product that we forget that Saudi oil profits funded the 9/11 plotters? Bin Laden? And the Pakistani ISI, which in turn trained the Taliban -- and the Mumbai attackers? That we ignore, once more, that burning fossil fuels is altering the climate system to make life less habitable for our species?

They're counting on it.