George Graham

The Threat of Cheap Oil



According to an old saying I heard as a child in Jamaica, “One man’s rise is another man’s downfall.” And, as usual with those old sayings, it has proven to be quite accurate throughout my lifetime.

Cheap oil is a dream come true for most of the industrialized world. It means lower gas prices for one thing, affordable electricity for another. And the result is usually a lower cost of living across the board.

But for the countries that depend on selling their oil to survive, it’s a nightmare.

It’s especially bad news for folks like Prince Alwaleed bin Talal al-Saud. The Saudi prince has written an open letter in response to news reports suggesting his country’s oil minister would be comfortable with oil prices below $90 a barrel.

His view is that such low prices would be “a catastrophe.”

According to people who claim to know about such arcane topics, oil prices are heading south with no end in sight. They point to such causes as the shale boom in the US and decelerating demand in China, where the economy has slowed.

I have no sympathy for the Saudi princes or any of the other Mideast moguls who are infamous for their self indulgent behavior and oppressive politics. Prince Alwaleed bin Talal al-Saud, for example, has been known to entertain party guests by throwing dwarfs.

And I don’t consider $90-a-barrel oil “cheap.” I am old enough to remember oil below $25 a barrel (in 2010 dollars). Those were the glory days of US prosperity, when gas was 20 or 30 cents a a gallon and the automobile was king.

As you might recall, that was before OPEC was formed, creating a cartel designed to extort obscene oil prices from an energy hungry world. Now, the OPEC countries have unprecedented competition. They don’t call the shots any more.

You might think I would be jumping up and down and clapping my hands, but I’m not.

And my lack of exuberance is not prompted by the fact that people like Prince Alwaleed bin Talal al-Saud have huge investments in Western corporations that are, sadly, too big to fail. (This Saudi prince has a massive stake in Apple, Time-Warner, and other corporate giants, for example.)

I realize their downfall could cause havoc in the global economy but that’s not my main concern.

Even the threat of rampant instability in the Muslim world, which plummeting oil prices could trigger, pales beside a greater danger – global warming.

I fear that as oil prices decline, the world will lose its sense of urgency for developing green energy sources. This trend has only lately gathered momentum with such encouraging signs as introduction of electric vehicles and increasing acceptance of wind and solar power.

While cheap oil might seem to be the cause of some people’s rise in the short term, it could spell everyone’s downfall in the long run.

Click for more on the Saudi prince’s letter.

Click for news of the current oil market.

Click for more on oil prices.

Click for more on the Mideast moguls.

About the author


I am a Jamaican-born writer who has lived and worked in Canada and the United States. I live in Lakeland, Florida with my wife, Sandra, our three cats and two dogs. I like to play golf and enjoy our garden, even though it's a lot of work. Since retiring from newspaper reporting I've written a few books. I also write a monthly column for