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IndexIndex ....................................................................................................................................................................................................11NC Link .............................................................................................................................................................................................31NC Russia ! .......................................................................................................................................................................................41NC Gradualism Turn (1 of 2) ............................................................................................................................................................51NC Gradualism Turn (2 of 2) ............................................................................................................................................................6U- Prices ..............................................................................................................................................................................................7U- Transition (1 of 3) ..........................................................................................................................................................................8U- Transition (2 of 3) ..........................................................................................................................................................................9U- Transition (3 of 3) ....................................................................................................................................................................... .10U- Transition- SUVs Module ................................................................................................................................................... ...... ...11L- Glut ...............................................................................................................................................................................................12L- Glut- Saudi Arabia ........................................................................................................................................................................13L- Boosters ................................................................................................................................................................................. ...... .14!- T/ Case (1 of 2) ..............................................................................................................................................................................15!- T/ Case (2 of 2) ..............................................................................................................................................................................16!- Econ ...............................................................................................................................................................................................17!- Hege ...............................................................................................................................................................................................18!- Iraqi Econ ......................................................................................................................................................................................19

!- Mexico 2NC ................................................................................................................................................................... ...... ...... ...20!- Mexico- Oil Key ............................................................................................................................................................................21!- Middle East Stability .............................................................................................................................................................. ...... .22!- Poverty ...........................................................................................................................................................................................23!- Russia- Lashout 2NC .....................................................................................................................................................................24!- Russia- Econ- Oil Key ...................................................................................................................................................................25!- Russia- Econ- Inflation IL .............................................................................................................................................................26!- Russia- Trade Leverage .................................................................................................................................................................27!- Saudi Arabia 2NC ....................................................................................................................................................................... ...28!- Saudi Arabia- IL- US Imports Key ................................................................................................................................................29!- Saudi Arabia- !- Econ ............................................................................................................................................................. ...... .30!- Saudi Arabia- !- Terror ..................................................................................................................................................................31!- Venezuela .......................................................................................................................................................................................32

Chinese Growth DA 1NC .................................................................................................................................................................33Chinese Growth DA- L .............................................................................................................................................................. ...... .342NC AT Peak .....................................................................................................................................................................................35Aff- U- Prices Wont Stay High (1 of 2) ...........................................................................................................................................36Aff- U- Prices Wont Stay High (2 of 2) ...........................................................................................................................................37Aff- U- High Prices Inev ...................................................................................................................................................................38Aff- U- AT High Prices S Case (1 of 2) ..................................................................................................................................... ...... .39Aff- U- AT High Prices S Case (2 of 2) ..................................................................................................................................... ...... .40Aff- U- AT Markets S ........................................................................................................................................................................41Aff- No L ...........................................................................................................................................................................................42Aff- !- Dollar .............................................................................................................................................................................. ...... .43Aff- !- Econ (1 of 2) ..........................................................................................................................................................................44Aff- !- Econ (2 of 2) ..........................................................................................................................................................................45

Aff- !- Food Prices ............................................................................................................................................................................46Aff- !- Free Trade (1 of 2) .................................................................................................................................................................47Aff- !- Free Trade (2 of 2) .................................................................................................................................................................48Aff- !- Manufacturing- U ......................................................................................................................................................... ...... ...49Aff- !- Regional War .................................................................................................................................................................. ...... .50Aff- !- Resource Wars (1 of 3) ................................................................................................................................................... ...... .51Aff- !- Resource Wars (2 of 3) ................................................................................................................................................... ...... .52Aff- !- Resource Wars (3 of 3) ................................................................................................................................................... ...... .53Aff- !- Russia- Dem ! T/ (1 of 2) .......................................................................................................................................................54Aff- !- Russia- Dem ! T/ (2 of 2) .......................................................................................................................................................55Aff- !- Russia- U ...............................................................................................................................................................................56Aff- !- Russia- Prices Key ................................................................................................................................................................ .57

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Aff- !- Russia- Econ- Resilient ........................................................................................................................................... ..............58Aff- !- Russia- Hege (1 of 2) .............................................................................................................................................................59Aff- !- Russia- Hege (2 of 2) .............................................................................................................................................................60Aff- !- Venezuela ...............................................................................................................................................................................61

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1NC Link

Oil prices are and will stay high

Krauss 7-2

Clifford Krauss July 2, 2008 Clifford Krauss has been a New York Times correspondent since 1990. He currently is a national business correspondent based inHouston. He covered the State Department, Congress and the New York City police department before serving as Buenos Aires bureau chief and Toronto bureauchief. He is author of "Inside Central America: Its People, Politics and History," (1991). He has published articles in Foreign Affairs, GQ and Wilson Quarterly,along with other publications. Oil Demand Will Grow, Despite Prices, Report Says http://www.nytimes.com/2008/07/02/business/02oil.html?ref=business

World demand for oil should continue to climb, despite the doubling of oil prices and weakening economic growth, according toa report released Tuesday by the International Energy Agency. That should mean tightening supplies, decreasing the odds thatdrivers will get much relief at the gasoline pump. The Paris-based agency, which advises governments of the industrializedcountries, predicted that oil consumption would decline slightly in the United States and other developed countries over the

next couple of years. Americans, the report said, are beginning to drive more fuel-efficient vehicles and taking mass transit when itis available. But the small decline in oil demand in the industrialized countries will be more than offset by an estimatedincrease in demand of 3.7 percent a year from 2008 to 2013 in developing countries, particularly in Asia, the Middle East

and Latin America. said The report is only further confirmation of the inability of global supply to catch up with risingdemands,Chris Ruppel, an energy analyst at Execution, an institutional brokerage firm. After five years of record increases in oil prices, producers are stillunable to sufficiently expand output. It means we are in for rough times. The report said energy consumption was increasing in developing countries because of

increased trade, growing internal markets and strong commodity prices. But subsidies that typically shield gasoline consumers in developing countries, the reportsaid, are also important in sustaining strong demand, particularly in oil-producing countries. By 2013, oil demand in developing countries will account for nearly 49

percent of total global demand, the report said, compared with 36 percent as recently as 1996. Demand will rise the most in China, as it has since 2004. China willaccount for almost a third of the worlds annual demand increase in the 2008-2013 period, the report said. That projection is based on International Monetary Fund

predictions of double-digit annual economic growth rates in China for the foreseeable future. The global picture for oil production is little better. The agencysforecast for oil production capacity actually declined by about 3 percent for 2012 from what it forecast a year ago. High prices have stimulated exploration and fielddevelopment, but the agency projects an increase in annual global production capacity of 1.5 million to 2.5 million barrels a day by 2010 from current levels, orroughly twice the current production in the Gulf of Mexico. After that, the agency expects annual growth below one million barrels a day from 2011 to 2013. Thosemodest increases result from project delays and exploding costs for many oil field projects around the world, declining production in major fields in Mexico and the

North Sea, and political turbulence in Nigeria and other producing countries. There are some bright spots for supplies; at least 250 major new field or fieldexpansion projects are expected to begin production in the next few years in non -OPEC countries alone. Spare capacity in OPEC countries is projected to rise from2.5 million barrels a day in 2008 to more than 4 million barrels a day in 2010, although that will still be less than 5 percent of global demand. Production growth isrobust in Brazil, Kazakhstan, Azerbaijan and Iraq. But the agency predicted that the tight markets would keep prices high. And it discounted the impact ofspeculation, which has been blamed by many politicians in the United States recently for the spike in prices. Blaming speculation is an easy solution which avoidstaking the necessary steps to improve supply-side access and investment or to implement measures to improve energy efficiency, the report said

OPEC will increase supply in response to the plan and decrease the price

Southeast Farm Press 1

12/19

But just when it appears something will in fact be done toward increasing domestic energy supplies, getting serious aboutalternative sources, and making a long-term commitment toward reducing our dependence on foreign oil well, miraculously,prices go down. OPEC magnanimously increases supply, refineries begin humming, and once again thoughts of a national energypolicy fade like the Cheshire cat.Only the cat's grin is left. And the cat is OPEC and the energy industry. They've seen it all before. They know they have only towait; that we in the United States have a short memory, and that as long as they toss us a sop of energy bargains from time totime, we'll moan and groan and pay their price the rest of the time.

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http://www.nytimes.com/2008/07/02/business/02oil.html?ref=businesshttp://topics.nytimes.com/top/reference/timestopics/organizations/i/international_monetary_fund/index.html?inline=nyt-orghttp://topics.nytimes.com/top/reference/timestopics/organizations/o/organization_of_petroleum_exporting_countries/index.html?inline=nyt-orghttp://www.nytimes.com/2008/07/02/business/02oil.html?ref=businesshttp://topics.nytimes.com/top/reference/timestopics/organizations/i/international_monetary_fund/index.html?inline=nyt-orghttp://topics.nytimes.com/top/reference/timestopics/organizations/o/organization_of_petroleum_exporting_countries/index.html?inline=nyt-org

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1NC Russia !

Low prices devastate the Russian economyHudson Institute Study Group on U.S.-Russian Relations, U.S.-RUSSIAN RELATIONS: IS CONFLICT INEVITABLE?,Summer 2007, http://www.hudson.org/files/pdf_upload/Russia-Web%20(2).pdf

T he economy Putin is leaving to Russia looks impressive. Gross domestic product has risen during his presidency from $200billion in 1999 to $920 billion in 2006 (in current dollars); the gold and currency reserves have risen from $12.7 billion in 1999to $ 303.86 billionin February 2007. The reserves of the Stabilization Fund,into which oil revenues are deposited, have reached$70billion. In 2006 the trade profit was over $120 billion,and the budget profit is 7.5 percent of gross domesticproduct. TheRussian economy is now the twelfth largest in the world. Although since 2005 economic growth hasbeen slowing down (from10 percent in 2000 to 6.8 percentin 2006) it still looks fairly impressive. A boom is continuing not only in the extractive sectors ofthe economybut also in construction, trade, and the service andbanking sectors. Russian business has shown it is able toorganizelarge scale production, successfully competingagainst international corporations. Russia, which in the1990s had humiliatingly tobeg for loans, repaid her debtto the Paris Club ahead of time. The number of majorbusinessmen in Russia is increasing more thantwice asfast as in the U.S.: in 2005 the number of dollar millionaires in Russia grew by 17.4 percent as against 6 percentin the U.S. However, like everything else in Russia, the economy has a false bottom. The causes of the economys successgiveno grounds for optimism, mainly because it is associated with high oil prices and has partly been achievedby sectors protected from foreign competition. A collapse of the oil price could plunge the Russian economy into recession, andpeople remember what a fall in the oil price means. Yegor Gaidar has repeatedly remindedus that the sixfold decrease in theoil price in 1986 led to the collapse of the USSR, and the twofold fall in 1998 caused a financial crisis that almost finished off

the barely breathing Russian economy.

The impact is nuclear warSteven David, Professor of Political Science at The Johns Hopkins University, Foreign Affairs, Jan/Feb, 1999Steven David, Prof. of political science at Johns Hopkins, 1999, Foreign AffairsIf internal war does strike Russia, economic deterioration will be a prime cause. From 1989 to the present, the GDP has fallen by 50

percent. In a society where, ten years ago, unemployment scarcely existed, it reached 9.5 percent in 1997 with many economists declaring the true figure to be muchhigher. Twenty-two percent ofRussians live below the official poverty line (earning less than $ 70 a month). ModernRussia can neither collect taxes (it gathers only half the revenue it is due) nor significantly cut spending. Reformers tout privatization as the country's cure-all, but ina land without well-defined property rights or contract law and where subsidies remain a way of life, the prospects for transition to an American-style capitalist

economy look remote at best.As the massive devaluation of the ruble and the current political crisis show, Russia's condition iseven worse than most analysts feared. If conditions get worse, even the stoic Russian people will soon run out of patience. A

future conflict would quickly draw in Russia's military.In the Soviet days civilian rule kept the powerful armed forces in check. But with the Communist Partyout of office, what little civilian control remains relies on an exceedingly fragile foundation -- personal friendships between government leaders and military commanders. Meanwhile, themorale of Russian soldiers has fallen to a dangerous low. Drastic cuts in spending mean inadequate pay, housing, and medical care. A new emphasis on domestic missions has created anideological split between the old and new guard in the military leadership, increasing the risk that disgruntled generals may enter the political fray and feeding the resentment of soldierswho dislike being used as a national police force. Newly enhanced ties between military units and local authorities pose another danger. Soldiers grow ever more dependent on localgovernments for housing, food, and wages. Draftees serve closer to home, and new laws have increased local control over the armed forces. Were a conflict to emerge between a regionalpower and Moscow, it is not at all clear which side the military would support. Divining the military's allegiance is crucial, however, since the structure of the Russian Federation makes itvirtually certain that regional conflicts will continue to erupt. Russia's 89 republics, krais, and oblasts grow ever more independent in a system that does little to keep them together. As thecentral government finds itself unable to force its will beyond Moscow (if even that far), power devolves to the periphery. With the economy collapsing, republics feel less and lessincentive to pay taxes to Moscow when they receive so little in return. Three-quarters of them already have their own constitutions, nearly all of which make some claim to sovereignty.Strong ethnic bonds promoted by shortsighted Soviet policies may motivate non-Russians to secede from the Federation. Chechnya's successful revolt against Russian control inspiredsimilar movements for autonomy and independence throughout the country. If these rebellions spread and Moscow responds with force, civil war is likely. Should Russia succumb to

internal war, the consequences for the United States and Europe will be severe. A major power like Russia -- even though in decline -- does not suffer

civil war quietly or alone.An embattled Russian Federation might provoke opportunistic attacks from enemies such asChina. Massive flows of refugees would pour into central and western Europe. Armed struggles in Russia could easily spill

into its neighbors. Damage from the fighting, particularly attacks on nuclear plants, would poison the environment of muchof Europe and Asia. Within Russia, the consequences would be even worse. Just as the sheer brutality of the last Russian civil war laid the basis for the

privations of Soviet communism, a second civil war might produce another horrific regime. Most alarming is the real possibility that the violentdisintegration of Russia could lead to loss of control over its nuclear arsenal.No nuclear state has ever fallen victim to civil war, but evenwithout a clear precedent the grim consequences can be foreseen.Russia retains some 20,000 nuclear weapons and the raw material for tensof thousands more, in scores of sites scattered throughout the country. So far, the government has managed to prevent the

loss of any weapons or much material. If war erupts, however, Moscow's already weak grip on nuclear sites will slacken,

making weapons and supplies available to a wide range of anti-American groups and states. Such dispersal of nuclear

weapons represents the greatest physical threat America now faces. And it is hard to think of anything that would increase thisthreat more than the chaos that would follow a Russian civil war

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1NC Gradualism Turn (1 of 2)

The market will ensure a smooth transition away from oil when the time is right- theplans attempt to force one now backfires and drops pricesBob Williams, Aug 2003. Oil and Gas Journal

Even without subsidies, market share mandates, or carbon taxes, heightened concerns over climate changeand air quality will prove a chink in oil's competitive armor, according to Sullivan."Carbon capture and advanced emissions controls will drive up the effective cost of fossil fuel resources," she said. "Great progressis needed on these fronts, given the ready availability and high reliability of that resource, balanced against the challenge of global

climate change , , , I do not think we are about to drive traditional fossil fuels out of the picture by any means, butwe are headed to a situation where renewables are a significant part of almost every energy supplier'sbalanced portfolio."Making the transition

If the depletionists are right about global oil production peaking around the turn of the decade, thenrenewables won't need much in the way of subsidiesor Kyoto mandates; skyrocketing costs of oil will help usherin a renewables era sooner than anyone currently predicts .But the resulting high energy costs for everyone will prove amassive economic dislocation for the world, a grim scenario often outlined by the peak-oil theorists.Some have even painted alarming pictures of civilization crumbling as a result of this new oil shock.

"No technology breakthrough can come to alter the imminent oil peak; it would take much too long to putnew technology in place to hope to dent oil and gas demand," said A.M. Samsam Bakhtiari, National Iranian Oil Co.senior expert. "Even if the two great hopes of solar and cold fusion would materialize, they could not bedeveloped in time, as it takes decades (not years) to put in place the necessary infrastructures." Butthere is aprevailing view among most energy economists that an approaching peak and subsequent steep decline inglobal oil production will send early price signals that will crimp demand, spur development ofnonconventional oil resources, and thus stave off the peak day. Another prominent peak-oil theorist, who declined tobe identified, acknowledged that "prices will rise, but they will send a signal that comes too late, given the long lead times tocreate new energy infrastructures. This will result in a reduction of demand but, unfortunately, the so-created room of maneuverwill be shortlived because non-Middle East oil supply will continue to decline with little chance that new investments will besufficient to compensate for both this decline andthe potential [overall] rise of demand."To this equation, one should add the negative impact on the GDP, as was the case during the last 30 years each time the price of

oil went up. I believe that it won't be the end of the civilization, but it will certainly be a painful transition."

Some of the depletionists contend that the only answer is for governments to take steps now to boostenergy prices and thereby conserve what oil reserves remain. But the unidentified peak-oil theorist is acontrarian on that score."The idea that planners, and especially state planners, could be smart enough to rise the pricesprogressively to avoid a shock is totally unrealistic," he told OGJ. "My preference is to leave thingshappen and ensure that governments will not intervene. A competitive industry is by far the best meansto ensure a rapid and correct adaptation."Rowley too sees increasing pressure on oil supplies within the next decade but offers a less apocalyptic vision."[Natural] gas will act as a next phase after oil, but what we expect to see over the next decade is a realization that conventional

energy costs can only go one way, up," he said. "The global economy has a wonderful way of coping, and transitionaway from conventional to renewables will occur."The real pivotal impact of renewable energy will be within the period of 2010-20, where players will be makingsignificant choices between a maturing renewable sector and conventional [energy sources]."Noting that recent history is full of instances in which technical progress or volatility of primary energy sources has led to majorchanges in energy supply or energy consumption, Mogford voices the BP stance that "oil will remain in relatively abundant supplyfor at least the next 15 years, with gas being plentiful for several decades longer."More than economics will drive the growth of alternative energy. Security of supply, minimization of environmental impacts, andtechnical advances will also be factors."But will the transition to renewables be an orderly one? Sullivan expressed her belief in an orderly transition: "We have seenoccasional price spikes in traditional energy resources over the last 30 years, and I suspect we will continue to see those from time

to time, for various reasons. "But I also suspect that governments will tailor their policies on emissions, renewableportfolio requirements, and technology funding to ensure that , except for the occasional, unusual price spikes, there isan orderly transition to an era in which renewables and non-conventional fossil fuel technologies are playinga major role in our energy supply picture."

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Therefore, she reckons that it will be another 20-25 years before alternative energy sources play a dominant rolethe world's energy mix. But orderly and rapid are not necessarily mutually exclusive in this outlook, says Namovicz.

1NC Gradualism Turn (2 of 2)

"If 'orderly' transition means 'gradual' transition, I think that history shows that transitions to a new form of energy can happenrelatively quickly, over the course ofa decade or so, but are not necessarily disorderly," he said. "If, either through subsidy ornatural market forces, one or more renewable technology becomes very economically attractive, there may be a boom periodwhere lots of new capacity is built every year for a few years, just like lots of new gas combined-cycle capacity has been built overthe past few years. But just because they're building lots of new combined-cycle units doesn't mean the coal units are suddenlydisappearing. It shouldn't be too surprising to see a similar pattern if wind or bio-mass suddenly broke through some economicthreshold, with lots of new annual capacity additions all of a sudden, but with the impact greatly dampened because the existingcapital stock is so large, and they weren't necessarily being built to replace that [capital stock], but potentially to satisfy newdemand."

In addition to the existing-capital-stock issue, Namovicz also cautions observers to remember the effect of

market feedbacks in citing his expectation that it will be a long time before renewables can becomethe world's dominant energy source. "If wind becomes economic because natural gas is too expensive,then they will build lots of wind [projects]. But this will take market share from gas and lower the gasprice. At the lower gas price, the new economics for wind may dampen its growth."Human concernsIf in fact a permanent oil shock is looming on the near horizon, it would seem that an early effortto impose higher energy prices for that reason or tosupport an early transition to renewables wouldhave its own severe economic consequences, especially for developing countries. In effect, this couldaccelerate the price shock. The likely deep recession that would ensue could hit not only the developingcountries directly but also squelch economic growth in the developed countries, upon which the formerdepend heavily for export markets and economic aid.

Turns the whole caseThe Business Times Singapore 2008 [High oil price a good way to reduce global warming, June 13, lexis]COMING from a former diplomat, the call last weekend by Australian prime minister Kevin Rudd to G-8 energy ministers meetingin Japan to 'hold a blow-torch' to Opec and force the cartel to increase production could not have been less diplomatic, if not to say

less egregious. A return to cheaper oil might boost economic growth in the short term but it would also set our already sick planeton a course towards destruction.A high oil price is the most effective form of 'carbon tax' and the only one likely to bring about what Japanese Prime MinisterYasuo Fukuda described this week as a needed 'carbon revolution'. It is the ultimate market solution and, as advocates of economicliberalism are so fond of telling us, markets operate more efficiently than governments in allocating resources.Consider what is happening already as a result of the de-facto tax imposed on energy consumption by the sharp rise in oil prices.Airlines are being forced to cut flight schedules, gas-guzzling SUVs are being abandoned in favour of smaller vehicles and, mostimportantly, the search for non-carbon or minimum carbon forms of power generation and transport has moved into high gear.Painful and costly though such a transition may be in the short to medium term, it is surely better that it be enforced through theprice mechanism than through more complex forms of bureaucratically administered carbon taxes, through carbon tradingmechanisms by which industrial firms can 'buy' the right to emit carbon in return for offsetting actions elsewhere, or through 'capand trade systems' etc.

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U- Prices

OIL PRICES WILL RISE INEVITABLY

The International Herald Tribune 2008 [Oil price forecast: Up, then down, then up again, lexis]Flynn said he thought that oil prices were more likely to fall than rise, ''because I think the factors that drove us to today areunlikely to repeat in 2008.'' He added that he thinks the dollar will find a bottom in 2008 and that the problems in housing arealready priced into the markets.But most experts say that if oil prices do go down, they will probably not go down very far or for very long.Richels said that consumers in Europe and Japan were not feeling the same pressure as Americans because their currencies havebeen strengthening and not weakening.''There is still a lot of demand that is outside of the United States,'' Richels said. ' 'There is increasing oil consumption, particularlyin the developing nations, and oil is getting more difficult to find.''

OIL PRICES WILL STAY HIGH

The Gazette 2008 [Montreal, Surging oil prices threatening global growth, geopolitical balance; Spurring search for energyalternatives, by RICHARD VALDMANIS, June 3,https://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T4067419295&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T4067419299&cisb=22_T4067419298&treeMax=true&treeWidth=0&csi=8355&docNo=5]

Oil prices have doubled in a year to around $130 a barrel as rapid increases in consumption in China and other developingcountries strain supplies, and some analysts have said crude could top $200 a barrel by 2010 as the market remains tight.While the boom has helped big oil-producer countries, particularly Russia and parts of the Middle East, there are signs the majorconsumers - the United States and parts of Europe and Asia - are starting to crack under the strain.

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U- Transition (1 of 3)

High prices are spurring a slow transition that will solve the case now

Wherry 7

[Rob, writer for the Smart Money magazine, Alternative-Energy Funds Could Offer High-Powered Returns,http://www.smartmoney.com/fundinsight/index.cfm?story=20070621&hpadref=1)]

Wind power and other forms of alternative energy solar, hydro, geothermal, biomass are quickly coming into vogue acrossthe globe thanks to record high oil prices, shrinking reserves and world-wide demand that is expected to increase 50% by 2030,according to the International Energy Agency. What has also given them some attention is that these sources are now at the heart ofprofitable businesses. That hasn't always been the case. Clean Edge, an industry research firm, anticipates biofuels, wind, solar andfuel cells will generate $217 billion in industrywide revenues by 2016, up from $56 billion in 2006. Even the typical American haschanged his perception: A survey by Calvert, a socially-responsible investment firm, found that 85% of the 1,094 people that theypolled thought putting money into alternative energy was a good way to protect the environment and make money, too.Add all that up and you have a decent investing opportunity. You could spend your time reading over analyst reports on alternative-energy companies what little there are on these thinly-traded firms looking for a diamond in the rough. But a smarter optionis to scoop up the shares of one of the growing number of mutual and exchange-traded funds that specialize in this field. As always,

though, be prepared for sector funds like these to experience dramatic ups and downs. And we would suggest only building a 5% orsmaller position in this niche.The concerns here are numerous. Many alternative-energy companies are small firms that are barely profitable. Lose a fewcustomers or fail to make a piece of technology work and it could be lights out. Alternative-energy investors not only need to beaware of the price of a commodity like oil the higher it goes the more attractive managing solar and wind farms becomes butalso others like corn, a chief ingredient in ethanol. There are political concerns, too. "Both Republicans and Democrats agree weneed to be energy independent," says Todd Rustman, president of GR Capital Asset Management in Newport Beach, Calif. But thatdoesn't mean there aren't gripes. Locals, especially, complain that wind farms are eyesores and hurt property values. Those protestscan lead to costly delays or even derail some potential money-making projects.

HIGH OIL PRICES ARE FORCING INVESTMENT IN ALTERNATIVE ENERGIES

The Gazette 2008 [Montreal, Surging oil prices threatening global growth, geopolitical balance; Spurring search for energyalternatives, by RICHARD VALDMANIS, June 3,

https://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T4067419295&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T4067419299&cisb=22_T4067419298&treeMax=true&treeWidth=0&csi=8355&docNo=5]

A surge in the price of crude is threatening global growth for the first time in decades and spurring a desperate surge in interest inenergy alternatives and new technology to keep conventional oil flowing.How companies and governments navigate the treacherous energy landscape - which some analysts liken to that of the 1970s and1980s - will shape the future of the global economy and potentially tilt the geopolitical balance, experts said."What happens 10 years down the road will be determined by the decisions made on energy today," said David Kirsch, analyst atPFC Energy in Washington. "Countries need to get serious about the underlying problem of demand for oil."

High oil will encourage innovations

Newsweek June 23, 2008 Learning From the Oil Shock; SECTION: ROBERT J. SAMUELSON; JUDGMENT CALLS; Pg. 39Vol. 151 No. 25 ISSNFinally, we need to let high prices work. Aside from encouraging fuel-efficient vehicles and disciplining driving habits, theymay also stimulate development of new biofuels from wood chips, food waste and switch grass. Production costs of these

fuels may be in the range of $1 a gallon, says David Cole of the Center for Automotive Research. If true, that's well below today'swholesale gasoline prices. To assure new producers that they wouldn't be wiped out if oil prices plunged, we should set a floorprice for oil of $50 to $80 a barrel, about 40 percent to 60 percent of today's levels, says Cole. It's a worthy idea and can be donewith a standby tariff. It would activate only if prices hit the threshold. We know that oil prices are unpredictable, and should a pricecollapse occur, Americans wouldn't be deluded into thinking we've returned permanently to cheap energy. We've made that mistakebefore.

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U- Transition (2 of 3)

Greener technologies wont make a difference in the short termNewsweek June 9, 2008 The Coming Energy Wars; Rana Foroohar; With Barrett Sheridan in New York WORLD AFFAIRS; Pg. 0Vol. 151 No. 23 ISSN: 0163-7053

And while higher prices are already driving down energy consumption in rich nations, that drop does not offset the boomingdemand in emerging markets.Meanwhile, though numerous green technologies hold plenty of promise, none of them are going to save the day any timesoon. "It's a false god," says Robin West, chairman of PFC Energy. "There will be step changes in technology, but peopleforget the scale of the oil business. Ethanol production was 5 billion gallons last year, with huge subsidies to farmers and

rising food prices. But that's the size of one production platform off the coast of West Africa."

High oil prices cause gradual market innovations that will solve current problems

Financial Times June 29, 2008, The positive side of high oil pricehttp://www.gulfnews.com/business/Comment_and_Analysis/10224724.html

Peak oil or freak oil? The current oil shock, with Nymex crude touching $142 on Friday, has as much to do with bad luck as geology. And, as usual with luck, manhas largely made his own. The central theme of this decade's bull market in crude is little different from previous oil shocks: a change in expectations about future

supplies. In other words, many think we have enough oil today but might not tomorrow. A series of largely man-made disruptions has fed that fear. In countries suchas Russia and Mexico, resource nationalism has stifled investment in supply. Violence in Nigeria and Iraq has shut down fields. The Energy Policy Research

Foundation estimates the world's lost output of up to 4.5 million barrels a day is the equivalent of twice the world's effective spare capacity. Whether theproblems are below or above the ground, the result is the same: fewer barrels available. The distinction, however, is

important - if only because humans, even politicians, can alter their behaviour. When oil prices are rising, producers have anincentive to keep markets tight. But, eventually, expensive oil encourages conservation, new investment and the search foralternatives. Meanwhile, protectionism breeds inefficiency. Russia and Mexico, for example, are taking steps to reduce oil taxes orattract foreign companies, respectively, to address stagnant or falling output. The same point extends to the demand side. In theUS, high oil prices prompt drivers to buy more fuel-efficient cars . Meanwhile, even if Asia's drivers are becoming richer, theywill never reach America's currently bloated per capita usage of oil. Governments across Asia are already cutting expensive fuelprice subsidies. Shocks are occasionally necessary to change human behaviour. High prices are painful, but will ensure theworld does not run out of oil.

High prices cause more alternative energy innovation

Caryle Murphy June 23, 2008 Saudi Arabia to boost oil output. Will gas prices fall? Correspondent of The Christian ScienceMonitor http://www.csmonitor.com/2008/0623/p06s02-wome.htmlIf there is one word that has long described Saudi Arabia's oil policies, it is "stability." The Saudis have prided themselves on beinga reliable source of oil. They like price rises, but they dislike the wild swings that bring market uncertainty . Only 10 years agothe Saudis were in dire economic straits. Oil was $10 a barrel and the kingdom's debts were the equivalent of 130 percent of itsgross domestic product, mostly because it had financed the $60 billion-plus cost of the 1990-91 Gulf War to eject Saddam Husseinfrom Kuwait. Their greatest fear, say observers, is a severe drop in oil prices that would throw their ambitious developmentprojects, including the building of six new megacities, into disarray. Despite the cash windfall, the Saudis fear high prices

will sour political ties with important allies like the US and accelerate the development of alternative fuels. On Sunday, BritishPrime Minister Gordon Brown called for a "global new deal" between consumers and oil producers based on "a shared interest in a more diversified range of nonoilenergy sources." He said oil exporters should be able to "recycle" their windfall oil profits "into alternative energy investments in developed market economies." Inturn, Britain should offer the producers "genuine openness and partnership in our investment markets." Cognizant of the hardship caused by high oil prices, theSaudi king called for an international initiative to help developing countries meet their energy needs, pledging $500 million in soft loans. He also suggested thatOPEC contribute $1 billion.

HIGH PRICES FORCING ALTERNATIVE ENERGY INNOVATION NOW

AP 2008 [Gas at $4 brings promises, pandering, By TOM RAUM Jun 23, 2008,http://ap.google.com/article/ALeqM5isJU4OyzZglXxAWlzkvmnslNP3-wD91FUOI00]

Both want to boost alternative energy technology, press for more fuel efficiency and promote more conservation. Both McCain andObama favor expanding the electricity grid, implementing caps on carbon emissions to curb global warming, spend billions onclean-coal research and give nuclear energy a larger role. They differ on offshore drilling, but agree on keeping the ban on oilexploration in the Arctic National Wildlife Refuge.Despite the flurry of activity and rhetoric, major factors in the rise of gas prices the weak dollar, soaring demand in China andIndia, market speculation, supply problems are beyond U.S. policy-makers' direct control.

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U- Transition (3 of 3)

HIGH OIL PRICES CAUSING A SHIFT TO RENEWABLES IN THE STATUS QUO

The Deal 2008 [Fueling the alternatives, lexis]HIGHLIGHT: The increased demand for energy galvanizes interest in alternative sources at the government and private-sectorlevel.Oil prices are reaching record levels, evidence is mounting on the degradation caused by carbon-based fuels, fossil fuel reserves aredeclining, green tax breaks are becoming more popular, and the U.S. Senate is working on legislation aimed at cutting U.S.emissions by 70% before 2050.This, combined with an increased demand for energy, is fueling interest in alternative energy sources at the government andprivate-sector level.In 2008 the reallocation of venture capital and private placements from coal and biofuel producers (including corn ethanol) to caneethanol, wind and solar-energy-producing companies will continue to increase in order to meet increased demand.In February J.P. Morgan Chase & Co., Morgan Stanley and Citigroup Inc. partnered for the purpose of creating The CarbonPrinciples -- climate change guidelines for advisers and lenders to the U.S. power industry. The banks worked in conjunction withpower companies and the Natural Resources Defense Council and Environmental Defense to create the guidelines and a frameworkfor lenders to understand better and evaluate the potential carbon risks associated with coal-fired power plants. The Principles,which are expected to be implemented by the U.S. government in the next two years, will require federal caps on carbon dioxide

and should lead to reductions in both the financing and building of coal-fired power plants.Some companies, noting the rising costs of energy production and anticipating the Carbon Principles and other federal regulations,are beginning to invest in more environmentally conscious alternative energy sources.

HIGH PRICES INCENTIVIZES PEOPLE AWAY FROM OIL DEPENDENCE

USA TODAY 2008 [It can be a gamble to invest in alternative energy;Consider companies that dabble in wind power, conservation, by John Waggoner,https://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T4067427500&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T4067427503&cisb=22_T4067427502&treeMax=true&treeWidth=0&csi=8213&docNo=15]

Nevertheless, as oil prices hover above $110 a barrel, it's a safe bet that people will be thinking much harder about how to replacethe gas-powered engine, or at least how to make it use less fuel. Are there investment plays for that? Sure. But only with money

you're willing to see go up in smoke.Although oil prices are down from their peak of nearly $120 just a few weeks ago, a barrel of light, sweet crude closed at $112.52Thursday, up from $63.19 a year ago. The average price of a gallon of regular gasoline hit an all-time record high of $3.603 thisweek, according to the government.Back when gasoline was less than $1 a gallon, there was no real urgency to explore alternatives. But the prospect of $4-a-gallon gashas focused Wall Street's collective mind wonderfully on alternative energy. "When gas gets dear, it doesn't take long for people tosay, 'What else is available?'" says Robert Wilder, CEO of WilderShares, which created the WilderHill Clean Energy index.

HIGH OIL PRICES FORCING A TRANSITION NOW

New Delhi 2008 [An alternative scenario for oil, by Akash Prakash, June 25,http://www.business-standard.com/common/news_article.php?leftnm=10&bKeyFlag=BO&autono=326997]Secondly, there seems to be a serious mood change in the US towards energy security. The fact that John McCain has openly comeout and suggested a revival of the US nuclear programme, and that the Governor of Florida has talked of re-examining the ban on

offshore drilling, are just straws in the wind, pointing to a change in political mood. The US consumer is now feeling the pain ofhigher gas prices and the country will I think become more pragmatic in balancing environmental and energy security concerns.Who would have thought that the Americans can ever be weaned away from their gas-guzzling SUVs? But that is exactly what ishappening. As consumers adapt to high petroleum prices, this adaptation will soon manifest in policy change as well. One cannotrule out tax changes designed to reduce the carbon intensity of the economy.

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U- Transition- SUVs Module

A. HIGH PRICES ARE SPURING A SHIFT TO SMALLER MORE EFFICENT CARS NOW The Guardian 2008 [Ford shares sink to 23-year low as sales drop 28%,http://www.guardian.co.uk/business/2008/jul/02/ford.generalmotors]

Oil price: Slump in motor sales raises fears for viability of Detroit's car industryHigh petrol prices have caused a collapse in demand for pick-up trucks and big cars. Ford revealed yesterday that monthly sales inits core domestic market had dived by 28% to 167,090 vehicles as cash-strapped consumers shunned its showrooms.Jim Farley, Ford's vice-president for marketing, said: "Consumer fundamentals and consumer confidence deteriorated as the firsthalf unfolded."There was a sliver of relief for Detroit's dented pride as General Motors fought off Japan's Toyota to remain the largest seller ofcars in the US.GM, which owns brands such as Chevrolet, Saab and Vauxhall, only suffered an 8.3% drop in sales as zero-interest financing offersproved popular. Toyota's figures were worse, with a fall of 10.3% in the number of vehicles sold.Mark LaNeve, GM's vice-president for North American sales, conceded that the pick-up truck market was suffering from highprices at the petrol pump but said: "Asian manufacturers do not have a monopoly on fuel-efficient vehicles."The news caused a sharp rise in GM's share price, which has fallen by 55% this year and was trading before the sales figures at alevel last seen in the early 1950s.

Analysts are becoming increasingly alarmed that Detroit's big three - Ford, GM and Chrysler - are losing money at an unsustainablelevel. The trio have already cut more than 100,000 jobs since a downturn began three years ago but none were prepared for thescale of the impact caused by the rising price of oil.

B. THIS WILL CUT OIL DEPENDENCY IN HALF

Time 2004 [Kicking the Big-Car Habit, By MICHAEL ELLIOTT,http://www.time.com/time/magazine/article/0,9171,699412,00.html]

For all these reasons, it makes sense to dream of a world that is far, far less dependent on oil than it is now. Winning the OilEndgame: American Innovation for Profits, Jobs and Security, written by a team led by Amory Lovins of the Rocky MountainInstitute in Snowmass, Colo., is one of the best analyses of energy policy yet produced. Lovins, who has been preaching the needfor fuel efficiency for some 30 years, thinks big. His aim is to promote a set of policies that over the next two decades would savehalf the oil the U.S. uses, before moving to a hydrogen-based economy that dispenses with oil altogether (save for possible use as a

fuel to produce hydrogen.) If that seems hopelessly Utopian, Lovins reminds us that we have done something very like it before.Spurred by the oil price shocks of the 1970s, the U.S. between 1977 and 1985 increased efficiency and cut oil consumption 17%(and net oil imports 50%) while the economy grew 27%. The key to that revolution was a huge increase in average miles-per-gallonof the U.S. automobile fleet. If we had continued to increase energy efficiency at the same rate, the stability of Iraq and SaudiArabia would by now be of minor concern to U.S. policymakers. Instead, we bought SUVs and wasted two decades.Those SUVs are no joke. In the U.S., where 70% of oil is used for transportation, any energy policy is necessarily also anautomobile policy. The single key insight of Lovins' report is to focus on the need to reduce the weight of cars (without sacrificingsafety) by using advanced materials like carbon fiber and composites instead of heavy steel. When powered by hybrid technologiesthat combine electricity with the internal-combustion engine, such light vehicles will produce enormous oil savings. Lovinsproposes a nifty scheme of "feebates," which would reduce the consumer price of such energy-efficient cars while increasing theprice of gas guzzlers.

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L- Glut

Oil glut saps motivation to develop renewablesTime 11/7/94The oil glut of the 1980s sapped any motivation to develop alternative energy sources. Solar moved to the fringes of publicconsciousness in the U.S. as the Reagan Administration eliminated most of the federal funding for research, and big oil companiesdropped their development programs. Result: solar accounts for less than 0.5% of the power generated in the U.S. today, instead ofthe 2% to 5% envisioned in the late 1970s.

OPEC will floodNYT 00

IF there was one thing America's scientists seemed sure of during the energy crisis of the 1970's, it was thatnew methods of generating energy from the wind, the sun, the ocean waves and other sources would soonfree the country from its dependence on foreign oil.In particular, a form of nuclear energy called fusion promised clean, safe and inexhaustible energy. In aneditorial in August 1975 that mirrored scientific optimism, The New York Times noted a recent ''majorbreakthrough in fusion research'' and predicted that a test reactor could be working ''as early as the mid-

1980's; commercial applications could become a reality a decade later.''What happened? Why couldn't President Clinton flood power grids with wind, solar or fusion energy duringthe recent oil squeeze?''In 1976, almost everybody said the price of oil would keep going up,'' said Dr. Steve Fetter, a professor ofpublic policy at the University of Maryland. ''In fact, that's what drove a lot of the optimism about nonfossiltechnology.''Instead, the Organization of Petroleum Exporting Countries -- the monopoly -- opened the spigots again, newreserves of fossil fuels were found, energy prices fell and financing for alternative energy researchplummeted.

OPEC backlash at the planFreeman, FNS, 9-17-2004

I was just going to comment because this is the Middle East Policy Council and we try to focus on theimplications of things for U.S.-Arab relations. The major oil producers in the Persian Gulf - Saudi Arabiamost notable among them - do not take kindly to the idea of raising prices through taxes if the taxes go to thegovernments that levy them, not to the producers of oil. This is, in fact, a major point of dispute between theSaudis and various European governments who have chosen to tax gasoline at the pump at very high levels,both in order to raise revenue for roads and mass transit systems and to reduce demand for energy, andthereby preserve a measure of independence from foreign supply, but also for other purposes, none of whichare particularly congenial to the oil producers.

OPEC will flood with cheap oil causing price collapse

CJ Campbell, 3-20-2000 (oil and gas journal p.20)

Norway and Mexico offered to cut production to help support price. The OPEC countries themselves dideverything possible to foster the notion that they could flood the world with cheap oil at the flick of a switch.It was a strategy aimed to inhibit investments in gas, non-conventional oil, renewable energy or energysaving that they feared might undermine the market for their oil, on which they utterly depend.

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L- Glut- Saudi Arabia

saudi arabia will fight to keep alternative energy out of the market once they start lowering the price it will be impossible

to stop a price collapse

business wire 7/17/2000

Surprisingly, Saudi Arabia's decision to increase oil production is not necessarily aimed at increasing profitsin the near term; instead, it is designed to maintain the nation's franchise well into the future. According to thereport, government officials in Saudi Arabia worry that if oil prices remain too high, oil dependent nationssuch as the United States will increase oil exploration and development of alternative energy sources. "SaudiArabia plans on being in the oil game for many years to come," commented Leuffer. "They do not want torisk their future prosperity on present day greed." According to Leuffer, Saudi Arabia would like oil to fall to$25 dollars a barrel and he believes the Saudis will continue to produce oil until that is achieved. However, asother nations look to cash in before oil prices drop, production will increase beyond the desired levels. "It isdifficult to engineer such a precise correction. Once oil prices start to fall, it will be hard to stop them," saidthe Bear Stearns analyst. Leuffer believes oil prices could eventually fall to $20 a barrel.

Saudi Arabia is willing to boost oil production

Caryle Murphy June 23, 2008 Saudi Arabia to boost oil output. Will gas prices fall? Correspondent of The Christian ScienceMonitor http://www.csmonitor.com/2008/0623/p06s02-wome.html

Jeddah, Saudi Arabia - Saudi Arabia will produce more oil if customers need it the kingdom's oil minister promisedSunday. For the remainder of the year "Saudi Arabia is willing to produce additional barrels of crude oil above and beyondthe 9.7 million barrels per day which we plan to produce during the month of July," Oil Minister Ali al-Naimi said at a raremeeting of the world's top energy officials in this Red Sea port town. The unusual gathering was called by the Saudis to draw up aplan of action to address the unprecedented rise of oil prices and to defuse what Saudi officials see as an alarming political backlashagainst oil-exporting nations. Mr. Naimi also said Sunday that the kingdom was willing to invest to boost its spare oil productioncapacity above the current 12.5 million barrels per day planned for the end of 2009, reversing previous statements that the countrywould not go beyond that figure. "In addition, we have identified a series of future crude oil megaincrements totaling another2.5 million barrels per day of capacity that could be built if and when crude oil demand levels warrant their development,"

he said. The world's biggest oil producer has already announced modest increases (300,000 barrels in June, and 200,000 in

July) but those steps have not done much to stem the skyrocketing price of oil, which closed near $135 a barrel on Friday .Politicians and financial analysts, however, say there is no quick fix for the coincidence of complex economic factors pushing oilprices up. "We [have] been 30 years digging ourselves into this hole, and this is not something we're going to be relieved of in anyshort term," US Energy Secretary Samuel Bodman told reporters here. Oil's soaring price has contributed to the spikes in food andtransportation costs that have sparked angry street protests in places as diverse as Spain, Nepal, Indonesia, and Egypt. Americansare furious about $4-a-gallon gas, and airlines are abandoning low fares to cover higher fuel costs. Politicians in oil-consuming andoil-producing nations fear that rising prices could contribute to a global recession that would hurt all sides.

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L- Boosters

PRICE DECLINES SNOWBALL LOWER PROFITS GIVE EACH MEMBER AN INCENTIVE TO CHEAT TO GRAB

SCARCE REVENUES

THE ECONOMIST 3/27/1999

The question is not whether there will be cheating, but how much. The recent deal was struck because OPEC producers had seentheir oil income decline by more than $60 billion in 1998, compared with the previous year. They are desperately short of money.Yet, for the same reason, each now has more incentive than ever to raise revenues by failing to stick to promised production cuts.Members were ill-disciplined even when the price languished at around $11 last year, argues Fadhil Chalabi, a former OPECofficial who now runs London's Centre for Global Energy Studies. They may well seize on today's prices to make extra moneywhile they can.Mr Chalabi also points out that it was not the cartel that created this week's deal, but a smaller cabal of producers: a few Gulfcountries, led by Saudi Arabia, as well as several non-OPEC producers, including Mexico and Norway. Stocks of oil are close to arecord 400m barrels; that means that the recent price rise could quickly be reversed at the first hint of disunity. The new group willfind unity elusive: it is too disparate to function as an effective new OPEC.OPEC itself has been plagued by divisions. Iran refused last year to acknowledge that it was producing more than its quota,insisting that it had secretly been given the right to produce an extra 300,000 barrels a day. Saudi Arabia, OPEC's linchpin,grudgingly gave ground. With such a precedent, the Iranians may be tempted to try again. In Venezuela, the Saudis pin their hopes

on the newly elected president, Hugo Chavez. But Mr Chavez, a populist who was borne to office on a surge of populardisaffection, will find it just as hard to restrain output as did his predecessor. If the Venezuelan economy worsens, he will faceincreasing pressure to cheat.

empirically proven production increases by one country spill over collapsing opec unity

business wire 7/17/2000

High gas prices have hurt customers all summer, but relief is now on the way and cash strapped drivers can thank Saudi Arabia,according to a new report by Bear Stearns senior managing director and oil analyst Fred Leuffer. According to the report, SaudiArabia's unilateral pledge to increase production by 500,000 barrels a day will start a chain reaction among oil producing nations,which will cause oil prices to fall below the intended price. "The flood gates are now open," commented Leuffer. "Saudi Arabia'sdecision to produce more oil means OPEC unity is out the window. The race is on to see which countries can capitalize on thesehigh oil prices while they last." Leuffer says compliance among OPEC countries has already been suspect; according to reports,

every country except Nigeria has cheated on its production during the past two months.Saudi's Long Term Greed.Surprisingly, Saudi Arabia's decision to increase oil production is not necessarily aimed at increasing profits in the near term;instead, it is designed to maintain the nation's franchise well into the future. According to the report, government officials in SaudiArabia worry that if oil prices remain too high, oil dependent nations such as the United States will increase oil explorationanddevelopment of alternative energy sources. "Saudi Arabia plans on being in the oil game for many years to come," commentedLeuffer. "They do not want to risk their future prosperity on present day greed." According to Leuffer, Saudi Arabia would like oilto fall to $25 dollars a barrel and he believes the Saudis will continue to produce oil until that is achieved. However, as othernations look to cash in before oil prices drop, production will increase beyond the desired levels. "It is difficult to engineer such aprecise correction. Once oil prices start to fall, it will be hard to stop them," said the Bear Stearns analyst. Leuffer believes oilprices could eventually fall to $20 a barrel.

Minute variations in the oil industry is disastrous for economies.

Roberts 04 [Paul Roberts, energy expert and writer for Harpers,2004, The End of Oil, pg. 93]

The obsessive focus on oil is hardly surprising, given the stakes. In the fast-moving world of oil politics, oil is not simply asource of world power, but a medium for that power as well, a substance whose huge importance enmeshes companies,

communities, and entire nations in a taut global web that is sensitive to the smallest of vibrations. A single oil event apipeline explosion in Iraq, political unrest in Venezuela, a bellicose exchange between the Russian and Saudi oil ministers sendsshockwaves through the world energy order, pushes prices up or down, and sets off tectonic shifts in global wealth and

power.Each day that the Saudi-Russian spat kept oil supplies high and prices low, the big oil exporters were losing hundreds of millions of dollars and, perhaps,moving closer to financial and political disaster while the big consuming nations enjoyed what amounted to a massive tax break. Yet in the volatile worldof oil, the tide could quickly turn. A few months later, as anxieties over a second Iraq war drove prices up to forty dollars, the oil tide abruptly changeddirections, transferring tens of billions of dollars from the economies of the United States, Japan, and Europe to the national banks in Riyadh, Caracas, Kuwait City,and Baghdad, and threatening to strangle whatever was left of the global economic recovery.

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!- T/ Case (1 of 2)

Low prices encourage consumption worsening pollution

Peter coy, 11-3-97 (clean air in an era of cheap oil)

The expensive oil of the 1970s and early 1980s had one virtue: By discouraging consumption, it lessened the pollution caused bythe burning of gasoline, diesel, and other petroleum products. Environmentalists hoped rising oil prices would promote a switch tocleaner energy sources, such as solar power.If oil instead remains cheap for decades to come, the harm to the environment from sulfur dioxide, carbon monoxide, particulates,and other poisons could be enormous. Combustion of oil, coal, and other carbon-based fuels may also overheat the planet bycreating an insulating layer of carbon dioxide. Indeed, cheap oil is bound to complicate efforts to achieve a treaty on globalwarming in Kyoto, Japan, this December (page 158).PRICE TAGS. Luckily, there's growing support for a new pollution-fighting approach that harnesses market forces instead offighting them. The concept--embraced by economists and market-savvy environmentalists--is to charge polluters for each unit ofpollution they emit. A few polluters that can't easily cut emissions will pay a hefty cost, but many others that have the technology tocheaply cut emissions will be motivated to reduce them far more than they would have under traditional regulation. The result:Profit-seeking behavior leads to bigger reductions at lower costs than might have seemed possible.

CHEAP OIL RESULTS IN INCREASED FOSSIL FUEL DEPENDENCE

The New Zealand Herald 2007 [Upside to rising price of the black stuff, By Mathew Dearnaley,

http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10469826

"Yes, it causes hardship for some people as the price goes up, but I think we've been cursed with cheap oil," he told the Herald inAuckland, en route to the third national Ecoshow held in Taupo at the weekend."It has lulled us into complacency about using this non-renewable resource at ever-increasing rates and we simply can't continue todo that - if it takes high prices to change our behaviour then so be it."For the last couple of centuries we've been doing something incredibly stupid - developing economies on the ever-increasing consumption of non-renewableresources."Mr Heinberg is revered as a leading educator on the concept of Peak Oil, the point at which world production begins a slippery slide from an all-time high, sparkingwhat its proponents warn will be shortages and widespread conflict between or even within nations unless the international community can agree on quotas forcurbing demand.For him, that landmark is already in his rear-view mirror. He says production from oil wells peaked in 2005 at 74.2 million barrels a day and supplies extracted fromall sources have declined since July last year.Oil has meanwhile hit a record price above US$83 ($107) a barrel - more than three times higher than in 2004 - and he predicts an escalation to between US$100and US$120 by this time next year and "on and up from there".

The black stuff will continue to be discovered but in ever-smaller amounts in increasingly inaccessible parts of the world, such asthe Arctic Circle, where extraction will be more likely to damage fragile ecosystems.Although Mr Heinberg and his books, such as The Party's Over, have been attacked by oil giant Exxon-Mobil as unfounded scare-mongering, even the InternationalEnergy Agency predicts a supply "crunch" by 2012, followed by an inability to satisfy unabated demand fuelled by tiger economies such as China and India.Mr Heinberg acknowledges climate change as a problem of "much greater consequence" for the world."But I would say oil depletion is a problem of much greater urgency, because the consequences to human societies will come faster and thicker."He believes an "oil depletion protocol" by which communities and countries could take greater control over their futures by reducing consumption by about 2.6 percent a year - equal to his estimate of the depletion rate of world oil reserves - would be easier for the public to grasp than the Kyoto Protocol against climate change.

"It is simpler because everyone is in the same boat. The only way you can reduce vulnerability to supply shocks is to reduce yourdependence on oil."

LOW COST MEANS THE PLAN CANT SOLVE

BRYCE 2006 [ROBERT, an Austin writer and managing editor of Energy Tribune, Opinion Forum: viewpoints on issues in energy,geopolitics and civilization,http://www.petroleumworld.com/SF07012801.htm]

Cheap crude will short-circuit the push for renewable energy. We've seen this before. The surge in oil prices that occurred after the1973 oil embargo didn't last. As prices softened, so, too, did the interest in solar power, wind power and other technologies. Thebest hope for the renewable energy sector is a sustained period of high prices for fossil fuels of all types, from coal to natural gas.

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!- T/ Case (2 of 2)

Renewables cannot remain cost-competitive with low priced oil

Michael renneris, 2-6-3 (UPI)

Sustained low prices would critically undermine the fledgling efforts to build wind, solar, and hydrogen industries, kick away theeconomic incentive to use energy more prudently, and effectively destroy the Kyoto protocol.Wind power in particular has come a long way, growing by more than 30 percent annually in recent years and now cost-competitivewith most conventional sources of energy.Such advances could fall victim to artificially cheap oil -- a fuel whose considerable ecological and security costs are not properlyaccounted for.This is by no means an inevitable scenario. Just as it is possible that weapons inspections and determined global opposition towarmongering, can yet avert an invasion of Iraq, there is no reason why the United States cannot face up to its oil addiction.Neither is likely to happen in the absence of an informed, vocal public that demands an alternative approach to matters of war andpeace and the environment.

LOW COST RESULTS IN LESS EFFICIENCY

BRYCE 2006 [ROBERT, an Austin writer and managing editor of Energy Tribune, Opinion Forum: viewpoints on issues in energy,geopolitics and civilization,http://www.petroleumworld.com/SF07012801.htm]

Cheap crude would short-circuit the push for greater automotive fuel efficiency. American motorists who've become accustomed to$3 per-gallon gasoline have, of late, been buying more fuel-efficient vehicles. If crude (and therefore, gasoline) prices continue tofall, they will happily return to their Hummers, big pickups, and SUVs. And that will, once again, set up a scenario that will allowforeign automakers like Toyota, Nissan and Honda to capture even larger shares of the auto industry when gasoline prices riseagain, and they will.

LOW COST MEANS THE PLAN CANT SOLVE

BRYCE 2006 [ROBERT, an Austin writer and managing editor of Energy Tribune, Opinion Forum: viewpoints on issues in energy,geopolitics and civilization,http://www.petroleumworld.com/SF07012801.htm]

Cheap crude will short-circuit the push for renewable energy. We've seen this before. The surge in oil prices that occurred after the1973 oil embargo didn't last. As prices softened, so, too, did the interest in solar power, wind power and other technologies. The

best hope for the renewable energy sector is a sustained period of high prices for fossil fuels of all types, from coal to natural gas.

LOW COST LEADS TO GLOBAL WARMING

BRYCE 2006 [ROBERT, an Austin writer and managing editor of Energy Tribune, Opinion Forum: viewpoints on issues in energy,geopolitics and civilization,http://www.petroleumworld.com/SF07012801.htm]

Low-cost oil would increase emissions of greenhouse gases. One can argue all day about what's causing global warming. But ifpolicymakers want to embrace Kyoto or other anti-warming initiatives, cheap oil is the last thing they should want.A collapse in oil prices would mean a collapse in America's domestic oil production. We've seen this movie before, too. In the early1980s, Dallas and Houston were in a frenzy fueled by high-priced oil and a river of cheap money provided by crooked savings andloan operators. Everyone was convinced that high prices were here to stay. That illusion ended with the oil price crash of 1986 ,which, by the way, was largely precipitated by unrestricted production from Saudi Arabia. The crash resulted in bankruptcies fromMidland to Tulsa. Idle drilling rigs were cut up and sold for scrap. Skilled oilfield workers left the industry for good.

Cheap oil increases America's reliance on foreign oil. Back in 1985, when America's domestic oil production was on the upswing,OPEC countries supplied 41 percent of America's imported oil. By 1990, with domestic production decimated, OPEC's share hadclimbed to 60 percent. If a stint of low crude prices persists, the U.S. domestic oil industry will, once again, fall on hard times. Thatwill mean foreign producers, who generally have lower production costs, will be able to gain market share at the expense ofdomestic producers.

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!- Econ

High oil prices are key to manufacturing

Newsweek June 23, 2008 Learning From the Oil Shock; SECTION: ROBERT J. SAMUELSON; JUDGMENT CALLS; Pg. 39Vol. 151 No. 25 ISSNWe all know that gasoline is at $4 a gallon and oil is at $135 a barrel. But if you think that's the end of the story, don't talk toeconomist Jeffrey Rubin of CIBC World Markets. By Rubin's reckoning, we've barely passed the halfway point on a steadymarch upward that will take gasoline to $7 a gallon and oil to $225 by 2012. Though there will be fluctuations, the underlyingrise in prices, he says, will have pervasive and often surprising side effects. Among them:

U.S. manufacturers benefit, because rising ocean-freight costs--reflecting fuel prices--make imports more expensive. Someproduction returns to the United States, and some shifts from Asia to closer exporters (Mexico over China). Since 2000,estimates Rubin, the cost of shipping a 40-foot container from East Asia has gone from $3,000 to $8,000. With oil at $200 a barrel,the shipping cost would be $15,000. Already, he says, China's steel exports to the United States are falling while U.S.production is rising.

HIGHER PRICES DONT HURT THE ECONOMY

The Independent 2008 [OIL: THE POWER TO SHOCK, lexis]For now, most analysts remain relatively sanguine. They argue that the global economy is in a much better position to deal with the

rising costs because it is being driven by strong growth rather than a dramatic constriction of supply. Julian Lee, senior energyanalyst at the Centre for Global Energy Studies, said: "In the shocks in the 70s, we had very dramatic rises in oil prices in veryshort periods of time, largely due to the supply disruption and the panic response of consumers. It's much more slow and steadynow. We have had changes over three to four years when similar movements happened in a matter of weeks or months [in the1970s]."The market has already begun to respond. As the price has risen, global demand growth has decreased drastically in recent years,from 3 per cent in 2004 to 1.5 per cent in 2005 to an expected 0.8 per cent this year. Countries are also less dependent on petroleumthan they once were after having invested heavily in alternatives energies such as nuclear and natural gas in the wake of the 1970s'crises.Large corporations, meanwhile, have done their best to absorb the hit by reducing costs elsewhere - principally employee salaries.Brandishing the threat of outsourcing and cheaper immigrant workers, companies have also managed to browbeat workers intobeing more productive and working more. Janet Henry, an economist at HSBC, said: "Corporates have dealt with it so far bykeeping a lid on some of their other costs. Wage growth has remained very low in an era of phenomenal corporate sector

profitability. There is a danger, though, that this will now be passed through."

High Oil prices key to global economic growth .

McKillop 4

Andrew McKillop, April 19, 2004, Oil and Gas Journal http://www.gasandoil.com/goc/features/fex42297.htmThese gigantic investment needs are very obviously dependent on strong and sustained economic growth. Without much

higher and firmer oil prices, it is unlikely that global economic growth can be significantly increased from current low

average annual rates for many key economies.

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!- Hege

Energy independence kills hegeBRYCE 2008 [ROBERT, an Austin writer and managing editor of Energy Tribune, Gusher of Lies, republished in the New YorkTimes, http://www.nytimes.com/2008/03/07/books/chapters/first-chapter-gusher-of-lies.html?_r=1&ref=books&pagewanted=all]

Americas future when it comes to energy as well its future in politics, trade, and the environment lies in accepting the realityof an increasingly interdependent world. Obtaining the energy that the U.S. will need in future decades requires Americanpoliticians, diplomats, and businesspeople to be actively engaged with the energy-producing countries of the world, particularly theArab and Islamic producers. Obtaining the countrys future energy supplies means that the U.S. must embrace the global marketwhile also acknowledging the practical limits on the ability of wind power and solar power to displace large amounts of theelectricity thats now generated by fossil fuels and nuclear reactors. The rhetoric about the need for energy independence continueslargely because the American public is woefully ignorant about the fundamentals of energy and the energy business. It appears thatvoters respond to the phrase, in part, because it has become a type of code that stands for foreign policy isolationism the ideabeing that if only the U.S. didnt buy oil from the