Gas Prices: The Oil Well Has Blown Its Top!

I am now paying at the pump more than I pay for a really good meal in my favorite restaurant. I even took to replying to all of my friends who, some years back, told me not to bitch and complain about the high cost of gas because milk and bottled water were more expensive. Well, the chickens have come home to roost on this matter: milk and bottled water are less expensive than a gallon of gas!

What got us here? Some people say the dollar is weak, and that is why we pay more for oil. I doubt that. The U.S. dollar is globally down about 10%, but gas is up a whole lot more than that!

Some people say there isn’t enough oil on the market, now that China and India are buying huge amounts, but I don’t buy that either. Actually, there seems to be a more-than-adequate supply of oil out there right now.

Some people say lower the taxes on gas at the pump (Hillary Clinton & John McCain each propose variations on this idea). I think that would lead to two disasters. First, the taxes pay for infrastructure, and as we all know, bridges and roads in the U.S. are generally in deplorable condition. Second, lowering the taxes would at best be a temporary solution that would lead to higher consumption, adding to the problem and making it potentially even worse.

Some people want to drill in ANWR, and Arctic National Wildlife reserve, where it is said enough oil exists to keep us humming along in our Hummers for quite a long time. Of course, there are oil shale fields, off-shore sites and other places we could also drill and find oil, so why not use those resources now?

Then some people want to reopen old, low-producing wells, such as those in the Midwest. Well, that is already being done, although the oil is pumped more slowly than molasses on a cold January morning. It’s just not a huge supply, and is only worth the effort when oil prices are very, very high.

Lastly, increase the availability of bio-fuels, ethanol. OK, but it costs a lot of money and takes forever to get new plants on-line, doesn’t it? And there is that nasty ethical issue of taking food that could feed starving millions and putting it use as fuel. Ouch, bad form, guys.

All of these sound reasonable, in order to keep our automobiles moving us from point A to point B, but I am a skeptic when it comes to easy (or even not so easy, but quick and seemingly expedient) solutions to huge problems. To tell the truth, most people do not seem to have a really good idea about why gas prices are up, but we do know that oil supply is not necessarily low. It seems, according to my friends at NPR, who interviewed Vijay Vaitheeswaran, correspondent for The Economist and co-author of Zoom, The Global Race to Fuel the Car of the Future, that the real reason behind the high prices has nothing to do with supply and demand, but a shift in investments and rising oil nationalism, coupled with a reluctance on our part to separate ourselves from our over-dependence upon oil at a fuel.

Those people who seek to make money off investments have fewer choices these days than they did, even, for example, a year or two ago. Housing markets are down, so real estate is not a wise investment for turning a quick buck. Many have turned to the volatile oil sector, where trading can often change dramatically, with huge swings in oil prices, from one minute to the next. Speculators have been helping drive the cost for oil up and down; that much is quite true, but is that enough to cause these higher prices?

In my opinion, greed is at the heart of most of this. We, as consumers, just can’t get our heads around the fact that we need to reduce our need for oil. I have even heard some of my friends say that it is our God given right to drive gas-hungry vehicles. Well, that type of twisted logic usually leads to a sudden downfall. As for the rest of us, until we get there, none of us should complain about how high gas prices are. We are in a free market situation, and demand drives up prices like nothing else can.

Our stock market is also fueled by greed in a sense, in that nobody enters the market hoping to lose money. The higher the price of crude oil goes, the better for speculators. I’m all for making a profit, within the rules of the game, of course.

I’m not out to change the way we do business, but I am certain that greed, (or monetary ambition if you prefer), can also be put to better use. Where are the entrepreneurs creating new energy systems? This would be a huge and profitable market in the right hands. Where is our great national genius and leadership in this field? Why isn’t President Bush, and every candidate hopeful of truly making change happen in our nation, delving into ways of creating profitable markets for alternative energy sources, sources which do require huge input of energy to make a pittance of return?

No matter what, the world is changing all around us, and if we are to keep our place at the top of this global energy chain, we had better get busy right now and make a better future than that which is being predicted for us.