The Saudi’s are at the Pinnacle of their society right now. The entire world believes it couldn’t exist without their oil, but the truth is that alternative fuels like ethanol and biodiesel are rapidly reaching a pricing parity with oil (if they haven’t already); and if the US government were to expand the subsidies (Lower Fuel Taxes) on these fuels, while increasing the fuel taxes on petroleum-based fuels then the price of oil would plunge.

The infrastructure is being built to accomplish this as we write. The Saudi’s know that the natural price for their product is headed downward as more and more alternatives become available. Some Senators and Congressmen from oil producing States know this as well, and while they (Like Barbara Boxer) love talking about cleaning up the environment, are standing in the way of increasing the role that these cleaner alternative fuels play in our economy.

Fuel prices can be manipulated in the short term, but in the long term, they are deflating, and we slip into a double-dip recession you might see $1.00/gallon gas again.

Scott