Thus aggressively seeking to end oil imports to the

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Unformatted text preview: ternalities that are not incorporated within market prices.1 In 2005, it appeared that us$70 per barrel oil prices might have provided the market signal that consumers should ready themselves for the post-oil future.2 However, while technological developments may yet yield rapid transitions to a much less oil intensive economy, without creative government policies and aggressive efforts by industry, present trends will only deepen global oil dependency. Even as sophisticated alternative energy enthusiasts suggest a swift transformation in fuels and transportation platforms is possible,3 most mainstream analysts of energy markets believe petroleum will remain the predominant source of fuel in the transportation sector for the next several decades.4 255 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Good – Saudi Relations and Energy Cooperation 256 Oil DDW 2012 1 US oil dependence is key to engage Saudi Arabia and maintain energy market stability Moorse, Managing Director of Louis Capital Markets, 09 Edward L. Moorse, Managing Director of Louis Capital Markets. He was Deputy Assistant Secretary of State for International Energy Policy in 1979-81 ,09 , [“Low and Behold Making the Most of Cheap Oil,” 88 Foreign Aff. 36 2009, handle=hein.journals/fora88&div=72&g_sent=1&collection=journals] E. Liu The U.S.-Saudi energy dialogue, which Washington has neglected for years, needs to be reinvigorated. No w that Saudi Arabia has a huge spare production capacity and thus the tools to advance Washington's economic and political goals, it should be easier to establish between the two governments better and higher-level communications about the oil market and the global political economy. Such a dialogue cannot take place at the level of energy ministers. It requires the kind of political attention that can come only from the Department of State or the White House. Saudi Arabia appears to want to keep oil prices between $40 and $75 a barrel in order to promote global economic growth and limit the revenues of rival producers while nonetheless adequately funding its own budget. Washington's relations with Riyadh involve other difficult diplomatic issues, such as the creation of a Palestinian state and how to secure participatory governance in Iraq after the withdrawal of U.S. troops. With its spare production capacity, which is unlikely to disappear anytime soon, Riyadh has earned itself special standing with Washington. Neither China nor any other country can do as much as Saudi Arabia can to bring change to the global energy sector. Thus, aggressively seeking to end oil imports to the United States from the Middle East-a policy articulated by Obama during and after his election campaign- is not the way to harvest the potential fruits of U.S.-Saudi relations. Other critical areas will also require coordinated government action. The G-8 (the group of highly industrialized states) appears to be working on one of these areas: it is looking for ways to tame financial flows into energy markets and limit price volatility by promoting greater transparency and great...
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This note was uploaded on 01/30/2013 for the course ECON 101 taught by Professor Burke during the Spring '13 term at Southern Arkansas University.

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