Wednesday, May 21, 2008

Are we both the problem and solution?

Another day brings another record high oil price. This time it's due to some bullshit "logic" about impending shortages in the supply. The funny thing about that is that unlike when "shortages" existed in the 1970s, there aren't lines at gas stations or gas stations closing because they can't get any petro in the tanks.

Another funny coincidence is the timing for these record high prices. Not just the fact that this is happening mere days before Memorial Day and the unofficial start to the summer driving/vacation season but that prices only began escalating after our military entered and occupied Iraq. I am aware that Iraq's pre-war oil production is fairly insignificant but its loss provided a reason to begin escalating prices. Couple that with rabid development in India and China as well as increasing consumption (until recent months) in America and there's your reasons. Add in the fact that market speculators continue driving up futures prices and you have the magic formula for $4.00/gallon gas within weeks (definitely by July 4th, possible by June 15th).

This comment from here puts things in perspective.

Now is not the time for petty bickering
It is abundantly clear to anyone paying attention - we have to detach our reliance on petroleum and coal, and fast. The reasons are too numerous to even list here. Petroleum and coal served us well in the past, but the party is over. I like the idea mentioned in a previous post about forming a Manhattan Project for alternative energy research. But this will not be easy. The petro and coal industry will fight this tooth and nail. They will lie, spread false information, attack the messenger - and worse - to maintain their massive profits. They are the only ones that stand to lose if we break our dependency on fossil fuels.

It's not the time to view things in the negative. When times are toughest, innovation is where America shines (or used to). In an unstifled environment, anything is possible and many decades ago our country developed both nuclear weapons and space travel. I know that we, as a country, can overcome the current energy predicament and will come out on top. Now is not the time to take a wait-and-see approach. Now, more than ever, is the time to take chances, innovate and develop new ideas and break free from stale ways of thinking. Am I turning over a new leaf? Is it possible for America as a whole?


Balou said...

I agree it's time for change. I agree we need alternatives...affordable alternatives. Changes like this always start from the expensive and trickle down eventually to the affordable. If we can create a demand by purchasing current alternatives, it will feed the market with more alternatives. I feel that's the only power we have anymore as a people, buying power. It seems our elected officials have ears only for well paid lobbyists and deep pocket constituants. But then again, how many of us are writing to our elected officials and letting them know what we want?

justacoolcat said...

One thing that I think is interesting about the shortages is that in fact there are no shortages, and that includes the recent expansion by China and India into the market.

The price of oil has increased 400% in a few years and IMHO it's all based on greed.

I'll be looking to convert the house to solar ASAP, because of the price of natural gas heating and electric.

MJ said...

Being an economist at heart, I have had the supply and demand graph on my brain for most of this "crisis." Yes, the prices seem to have been made higher than they should have. No, there doesn't seem to be any real shortage, just a purposeful cut in production and increased demand from developing China.

For me, if we didn't demand so much friggin' fuel for our 10-seater SUVs, we probably wouldn't be stuck in this mess. As it is, demand for gas is highly inelastic, however, the past year has actually shown a slight decline in demand.

It isn't so much a "coincidence" that gas prices rise as Memorial Day approaches as it is a good business decision for the oil companies - they expect increased demand. Wanna do something about it? Stay home this weekend.

I'm not so mad at the oil companies as I am at the government for not stressing US companies need to help lower costs, boost GDP, and invest in energy R&D.

buffalodickdy said...

I have listened about electric cars, mass transit, wind power, and solar power for 35 years. Little has been done, because it was not in alot of rich peoples' best interests. Short term- we simply must prioritize to use less gas immediately. Long term- real funding for alternative energy sources, revisiting nuclear power, building new refineries, and opening new oil fields, not located in the Middle East.

Bee said...

Where I live, gas is already over $4. In Chicago it's $4.55.

I'm lucky enough to work 5 minutes away but our heating bill was unbelivable this winter! My hubs and I have good paying jobs but we are still having to cut back on things we took for granted years before.

We HAVE to DO something! :o(

James said...

With record profits in the history of profit, I don't see the business model changing in a more sane direction anytime soon. Why invest in alternatives or improve efficiency? There's too much money to be made by NOT killing the golden goose.

With that said, I'm not taking responsibility for the oil crisis. Oh sure, I could drive less or get a more fuel efficient car or take the bus. It might have an effect, might not.

I suppose I could lead by example, but I just feel that it's not up to me. I'll make my statistically irrelevant contribution when the folks who have more say make theirs.