Cazimi

Introduction to a Long Lecture on Oil

One interesting implication is that the oil-producing countries have an economic interest in seeing the major oil-consuming nations develop more effective conservation measures. Keeping oil prices high enough to spur conservation, but not so high as to cripple the system, would be in the best interest of a producer of an exhaustible asset who has a long time horizon. The analogy is a parasite that increases its feeding to drain its host whenever its host is feeling vibrant, but limits its feeding enough to keep its host healthy enough for the parasite to feed, thus maximizing the life-cycle of the parasite.