Apolitical Staples

You know what. I may have to take back a criticism I made of Paul Martin while he was on the campaign trail. In a speech during the campaign, then PM Martin said,

...Let me just take - we are talking about a series of instrumentations [ed: huh?] that will cut down substantially on energy costs. I was talking to, when I was in Argentina at the Summit of Americas, talking to a number of Caribbean countries, a number of leaders, the rise in the cost of fossil fuels is essentially putting those countries and their economies in huge, huge danger because what they all do is import fossil fuels to run generators to heat - to provide energy for their islands. And as you know, Mr. Chavez, the President of Venezuela is going around to these countries and saying join with me, join me against North America fundamentally and I'll help you out here. Where there is a huge power play going on as country after country who is dependent on the importation of fossil fuels finds its' costs going through the roof.

It seems that Hugo Chavez is looking to create not a National Energy Program, but an International Energy Program, where he will peg the price of oil at $50/barrel. Considering that this is $15 below the current barrel price this could have huge implications for Alberta and therefore Canada and heck, let's go for the gusto, the future of the environmentalist movement. Chavez claims that he has 200 years of reserves at $50/barrel. I am not sure if that means worldwide reserves or reserves for those countries that align themselves with Venezuela in shutting off the taps to the United States? I am no economist, what are the implications on a free market when there is a competing fixed market? Will the barrel price necessarily drop to the fixed market price or will it trade independently? I assume there will be a new supply/demand curve based on those outside of the Venezuelan cartel but with demand lowered can it sustain a price much higher than $50?

And here are some questions for the environmentalists and/or leftists out there. I know many on the left love Chavez but how is it in the best interests of the Venzuelan people to deny them the benefits of the full value of their oil? Also, from an environmental perpective isn't the incentive to look to alternative energy sources curbed by articficially lowering the price of oil? People have tried to get the world off of oil through guilt, but just ask the Catholic Church, guilt ain't selling like it used to.