OPEC seeks estimates on future demand
Kuwait's acting oil minister Mohammad al-Olaim walks with Saudi oil minister Ali al-Nuaimi at Kuwait International Airport in Kuwait City.
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KAI RYSSDAL: Over in Saudi Arabia this coming weekend, the heads of the 12 OPEC member countries will hold a rare summit meeting. Oil ministers get together all the time. This meeting's for the top dogs, and it's a safe bet there'll be some celebrating. Crude closed down almost two bucks today. But OPEC members will earn a record $650 billion from oil exports this year. The cartel's long-term business plan is to spend $130 billion between now and 2012 to boost oil output. Before they do, they want some guarantees from their big customers.
Our Washington bureau chief John Dimsdale explains.
JOHN DIMSDALE: OPEC says it just wants to be sure there's a market for oil exports five, 10, or 15 years from now. If the U.S. and Europe are going to encourage alternatives, like solar, wind and bio-fuels, OPEC worries demand will dry up and investments in extra capacity would be a waste of money.
STEPHEN LEEB: I think it's frankly frightening.
Stephen Leeb, the author of "The Oil Factor" sees more sinister motives.
LEEB: They're saying this is sort of a shot across the bow to the developed world, that if you do try to go full steam ahead in developing alternative energies we're not going to make it easy for you. If we employ a carbon tax, OPEC's going to cut back on production, and oil prices are going to go even higher and it's going to be a very serious situation for the whole world's economy.
Last week, the International Energy Agency forecasted no drop in oil demand, and even warned there'll be a supply crunch before 2015. Energy analyst Joseph Romm, at the Center for American Progress, says OPEC's concerns are misplaced.
JOSEPH ROMM: I would expect that if oil prices stay at current levels, we will begin to see a more aggressive effort to replace oil and to use it more efficiently. If I'm OPEC, the best way to avoid that is to produce more oil and frankly, at these prices, that's hard to imagine a better investment for them.
Besides, Stephen Leeb says no U.S. politicians can give OPEC any guarantees about alternative fuels.
LEEB: I mean we don't know who's going to be running the country over the next two, three, four, five years.
In Washington, I'm John Dimsdale for Marketplace.