Reduce Oil Production

There is another climate conference going on in Glasgow. Maybe this one will lead to results.

One thing I hear is that the American Secretary of State is asking Saudi Arabia to pump more oil.

If that appeal is successful, there will be more oil on the market. More oil on the market means more oil burned.

I heard somewhere that burning oil is part of the climate problem and we need to reduce it.

Prices of oil have gone up a bit this year. I think that is a good thing and we need much more of that. Higher prices means less demand for gas cars and more for electric vehicles, which in turn means a faster transition to renewable energy.

So I for one want Saudi Arabia and the other oil producers to reduce their production schedule in a predictable and radical way. A 50% reduction every four years like in the Bitcoin production schedule seems a reasonable and well balanced way to handle things.

It is really very simple. If you want to stop the climate emergency, you need to phase out fossil fuels. For that you need to start by reducing production. For the long term stability of markets, you need a long term dependable production schedule with large reduction steps.

Asking for the opposite at the occasion of this climate conference raises some doubts about whether the American government is willing to actually solve this problem.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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