> The price of oil won't necessarily go up from here. If it goes to $5/bbl, that will make governments look a bit stupid when they filled every storage space available at $15/bbl in the open market.

Companies can't actually produce oil for $5/bbl. In the long term that price would drive some of the producers out of the market and then the price would increase. It might go lower than it is right now before it goes back up, but it won't stay at $5/bbl in the long-term. They might give up the chance to pay $5/bbl instead, but it's unlikely they'd be losing money on the deal. Assuming they actually resell the oil when the price rebounds.

> This could be a massive moment for renewable energy; goods transportation costs are very low and many people will be seeking work once the pandemic abates, so the government could establish WPA-style programs to build wind farms, electrical grid improvements, and solar farms -- instead of spending that money on buying fossil fuels in order to pump them back into the ground. Instead of spending money in an attempt to cling to fossil fuels, we could use this moment as an opportunity to pivot.

WPA-style programs were never really efficient. They came out of the Keynesian argument that it's better to pay someone to dig holes and fill them back in than have them unemployed, because they're still not doing anything useful but at least then they have money to spend in the economy, and if you can get them to work doing anything even marginally useful then even better.

The biggest problem with it is that you're better off to just give them the money unconditionally (so they have it to spend) and then let them find a normal job with a normal level of productivity while still receiving the extra money, because there would be plenty of normal jobs now that everyone has some money to spend again and normal jobs are more productive than makework.

But that brings us back to the low oil prices. If you're going to stimulate employment by handing out cash, where does it come from? A carbon tax is a damn fine source, but even better when you have low oil prices, because then consumers don't feel it as much. And then you get your green jobs, automatically, because the carbon tax keeps oil and coal more expensive than electric cars and solar panels, and then there's a lot of demand for building electric cars and solar panels from all the people with money to spend because they're receiving the dividend from the carbon tax.

> The sooner the price of oil bottoms and a few overextended frackers devalue themselves by selling at a loss in order to generate cash flow, the more likely it is that Saudi Arabia will be satisfied with the results of its price war and will return to the negotiating table to re-establish output curbs.

I don't know about that. I think everybody sees the writing on the wall here -- we can't burn the known reserves we have in the ground or the world is totally screwed, so somebody is going to end up sitting on a whole lot of oil and coal that doesn't get sold before the world switches away from it. Nobody wants to be the ones holding the bag so everybody is now trying to sell their reserves for whatever they can get before one solution or another shuts down the demand permanently. That's not likely to change even if some of the producers go bust.

What gets price back up (some, maybe never fully to where they were) isn't the Saudis cutting production after the frackers go bust, it's just the frackers going bust. Which they'd still do even if we topped up the reserves, because that by itself wouldn't get the price up to where they'd need it to stay in business.

The real question is, if we top up the reserves, what are we supposed to do with them then? Do we want to be the ones holding the bag?