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Editorials
Thursday, March 30, 2000OPEC decision
should mean
lower gas pricesOPEC's decision to increase oil production by 6.3 percent isn't expected to reduce gasoline prices in the United States by more than a few cents a gallon, at least in the short run. The long-run outlook is brighter for consumers, however.The issue: OPEC has decided under U.S. pressure to increase oil production by 6.3 percent.
The peak price of $34.37 a barrel that was reached earlier this month has already dropped to about $25 and is likely to go lower. But prices aren't likely to go back down to the bottom of $11 a barrel reached a year ago, which was unsustainable.Nor would that necessarily be good news for consumers, because it would only result in more volatility in oil prices.
World oil production has been on a roller coaster for the last two years. In the fall of 1997, Saudi Arabia convinced OPEC to increase production by 1 million barrels a day. Prices then sank to the low teens in 1998 and hit $11 a year ago.
That prompted production cuts of 4.3 million a day in 1998 and 1999, resulting in higher prices, surging to $34 in early March. The price of gasoline in the United States has jumped from an average of $1.27 a gallon six months ago to $1.59.
OPEC today is not nearly as powerful as it was when it imposed its boycott in 1973. The 11 OPEC nations produce only 40 percent of the world's oil.
Non-OPEC production has increased about 15 percent over the last two decades. Ample new reserves are expected to soon become available in the Gulf of Mexico, eastern Canada and western Africa, among other places.
Moreover, technological advances since the 1970s have achieved more efficient use of energy, reducing the economy's dependence on oil.
OPEC has also had trouble getting its own members to comply with production restrictions. Cheating has been chronic.
Iran decided to fall in line with the other members after initially balking at a production increase. Although Iran had denounced U.S. pressure to hike production, through the lobbying of Energy Secretary Bill Richardson, its representative explained that the regime feared a loss of market share if it refused to go along with the increase.
That is precisely the sort of competitive pressure that makes it difficult to sustain production cutbacks. If one oil producer fails to take advantage of high prices by increasing production, another probably will.
Meanwhile Hawaii's concern with gasoline prices that for many years were far higher than the national average has been obscured, first by an unusual though brief drop in prices and now by the jump in world oil prices. But the state's antitrust suit against the oil companies continues. If the state prevails, Hawaii motorists may again see lower prices at the pump.
U.S. baseball
in JapanMAJOR League Baseball's millennium opener was played in Tokyo Stadium, and the Asian debut was an apparent success. Baseball-savvy fans watched in relatively quiet awe as the American national pastime was played between the New York Mets and Chicago Cubs. The second game of their doubleheader was played tonight.
Hawaii baseball fans can only look with envy and with nostalgia for a big league series played here three years ago.
Japan has been a venue for both professional and college American football teams. Pro basketball and hockey teams have put Japan on their regular-season schedule.
U.S. baseball for some reason was slow in exporting its spectacle, even though baseball is popular in Japan.
Several Japanese players have made it to the U.S. big leagues and many Americans have played on Japanese teams.
The Mets-Cubs opener was preceded by games this week between the visiting clubs and the Tokyo Giants and Seibu Lions of the Japan League. (The Giants won both of their games while the Lions lost both.)
"Baseball is a game whose global potential is untapped," said baseball commissioner Bud Selig, who traveled to the games. "The fact here is you have two nations where baseball is the national pastime. There is a chance to do so much more than pure baseball by establishing this kind of relationship. You don't worry about economics. The economics will take care of themselves."
Japan has become part of baseball's map not only because of its potential for marketing and merchandising but as a source of talent. Recent rules changes have allowed players in the Japan League to become free agents after nine years and enter America's major leagues.
Pitcher Hideo Nomo became the first Japanese player in 29 years to sign with an American team when he became a Los Angeles Dodger, and about two dozen other Japanese players have followed his example.
Hawaii had hopes of becoming a regular stop on Major League Baseball's schedule when the San Diego Padres and St. Louis Cardinals played a three-game series at Aloha Stadium in April 1997. The idea was left stranded at first base.
Perhaps Japan-bound teams in the future can be convinced to play a game or two in Hawaii en route. Hawaii's baseball fans should push the idea.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
