NEI Nuclear Notes

Personally, I’ve always had my doubts about Saudi oil supplies. Sure, there’s some room for strategic ambiguity here. But when someone is playing their cards too close you always have to wonder if they’re just bluffing. The following article would seem to indicate that’s just what the Saudis have been doing. This morning’s story in the Guardian that US diplomats believed Saudi Arabia to have overstated their oil reserves should ring alarm bells around the energy world. Every time there is a debate about whether OPEC should raise production to lower oil prices [subscription req’d], many commentators argue it is irrelevant: that the Middle East doesn’t have as much oil as it says and that it can’t raise production enough to bring prices down. If this is true, it has serious consequences for the oil price. If OPEC doesn’t have the slack to up production and bring prices down, they will have a lot further to go above the $100 barrier. Simply put, the argument is this: Du...

Robert Zubrin says yes.

More bad news for American and its allies from the WSJ Energy Blog : OPEC, meet Opegasur. That’s the name of a new natural-gas cartel established this morning in an agreement between Venezuelan President Hugo Chavez and Argentina’s President Nestor Kirchner . Opegasur, which stands for Organizacion de Paises Productores, Exportadores de Gas del Sur, will also include Brazil and Bolivia. It will be built around a $20 billion gas pipeline that will eventually connect the four countries. There has been talk that the natural-gas cartel might never get off the ground. But it may not be long before an even bigger — and scarier, to U.S. interests anyway — cartel takes shape, Michael J. Economides, editor-in-chief of Energy Tribune, warned recently on Foreign Policy’s Web site . “With domestic gas production in decline, the United States and many of its allies will grow more dependent on imports to generate electricity and heat homes,” he wrote. “Gas suppliers will band together in response t...