Wednesday, October 14, 2009

Now That's Ballsy

Apparently, Saudi Arabia is trying to get compensated for lower oil consumption as a result of new global environmental initiatives. This pretty much sums up my opinion:

“It is like the tobacco industry asking for compensation for lost revenues as a part of a settlement to address the health risks of smoking,” said Jake Schmidt, the international climate policy director at the Natural Resources Defense Council. “The worst of this racket is that they have held up progress on supporting adaptation funding for the most vulnerable for years because of this demand.”

I'd actually be very interested to hear the Saudis' methodology for calculating "fair" compensation. It should be possible, given this model, to calculate the implied price of oil that Saudi Arabia considers to be justified. Armed with that data, the rest of the world should be able to ask some very interesting and potentially embarassing questions about Saudi oil production policies. I'm very curious...

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