Like it or not, $100 oil forces new energy policy on U.S.

[Einhander Sn0m4n]

Like it or not, $100 oil forces new energy policy on U.S.

There are many causes for oil prices surging to near $100 a barrel.China and India are voracious new consumers driving up demand, and fear of supply interruptions — principally from conflict between the united states and Iran — might be adding as much as $30 to the price. The falling dollar also makes oil more expensive.


There are also many potential effects. Rising prices hurt the economy. As people are forced to spend more money on transportation and home heating, they have less for other things. They are also less likely to go on distant vacations or buy other goods and services that cost more because of higher fuel costs. This belt-tightening, combined with falling housing prices and tighter credit, could trigger a recession.

Add to that volatile mix a threat to national security. The biggest beneficiaries of oil at $96 a barrel are countries such as Iran,Venezuela, Russia and Saudi Arabia, places that are, or could become,security threats.

But higher prices do have an upside. They mean that the United States finally has a national energy policy. It might not be one of its own choosing. But it is having an impressive and immediate effect. The possibility of $100-a-barrel oil is forcing the nation to take energy consumption seriously after decades of slumber. This painful wake-up call might just rouse American ingenuity to finally effect real change.

Already, high prices are driving investments in solar and wind power. Buildings are going green. Car makers are racing to produce more efficient cars. At least two, Honda and General Motors, are even implementing concepts as radical as hydrogen fuel-cell vehicles, which don't use gasoline.

Notably, all this activity is being driven not by the occasional basket of favors to key lobbies that Congress passes and rebrands as energy legislation, but by the behavior-altering reality of higher energy costs.

The Democratic-controlled Congress is considering energy legislation, centering on such things as automobile mileage mandates and renewable fuels. It goes further than what Republicans enacted, which focused more on tax breaks and domestic oil and gas production. At this point, it is at best an insurance policy for alternative energy to keep it advancing if oil prices decline and stay there.

The reality is that $96 oil will accomplish more than all of the energy bills passed in the last generation combined. Painful, yes. Troubling, absolutely. But perhaps the only force powerful enough to alter the way America fuels its economy.

Think of $96 as $40 oil (which is about what it cost three years ago) plus a tax of about 140%. Had any public official dared to propose such a steep tax, he or she would have been run out of office. But its revenues would have gone to fund services in the USA. Now much of it goes to foreign governments, with some of it being shared with oil companies, related industries and oil traders — at least those smart or lucky enough to bet on rising prices.

As the presidential campaign heats up, expect more efforts to avoid the heat of rising prices. One perennial tactic is to blame Big Oil and demand investigations (which inevitably fail to show conspiracies). The Democratic candidates do so routinely during their debates.

But the interesting question is not why prices have gone up, but how American resourcefulness can be employed to break dependency on oil and maintain the momentum toward alternative fuels.

Oil approaching $100 a barrel is an opportunity, but only if the nation seizes it.

[Knife]

I agree in so much that it'll take straining the average Americans paycheck to fill up their wannabe monster trucks for them to start giving them up. Toys are only fun when they don't suck up your grocery money too.

And while I know a lot of people here are not keen on ethenol or the like, at least at five bucks a gallon people will start to see alternate fuels as a vaiable route. Hey, it's a start.

[Illuminatus Primus]

Ah, our media services - dutifully copy-and-pasting the same press releases or quotes from tired, no-data financial "analysts" with no critical thought. Maybe the cost is going up because...there's less oil flowing than 2006 and we want more than 2006? That's first grade math.

[Guardsman Bass]

What we need, if we want alternative fuels to really take off, is a long period at "moderately high" gas prices - gas prices sitting at $6-8/gallon in the United States. That's high enough that people don't simply abandon cars, but the bleeding of money from their wallets is so bad that they'll be screaming for both more public transit and low-or-no gasoline cars.

[Guardsman Bass]

Keep in mind that the above is what I think it would take for "alternative fuels" to take off (assuming they can). Higher gas prices than that, and you actually might get the more sane policy of re-designing public transit around something rather than cars.

[Darth Wong]

I agree in so much that it'll take straining the average Americans paycheck to fill up their wannabe monster trucks for them to start giving them up. Toys are only fun when they don't suck up your grocery money too.

And while I know a lot of people here are not keen on ethenol or the like, at least at five bucks a gallon people will start to see alternate fuels as a vaiable route. Hey, it's a start.

That's not why people here aren't keen on ethanol. People here aren't keen on ethanol because it will vacuum up much of the world's agricultural output (thus causing mass starvation in poorer countries) if they are actually foolish enough to try and use it to replace oil. The only escape route is finding a plant to use for ethanol that doesn't waste too much energy in conversion and will thrive in shitty land that would otherwise be useless anyway. And even then, you have to wonder if it will be enough. The real concern is that by the time the First World finally lets go of its oil addiction, it will have seriously harmed the rest of the world first.

[Chris OFarrell]

What we need is some way to dramatically slow production on the fields we have left over 5-10 years, without actually depleting the fields, like say destruction of chunks of the infrastructure.

Create an artificial shortage that still ensures guranteed supply will still be available in the long term to keep critical services going, but cause enough screaming to cause massive crash programs to start, strict rationing of private vehicle usage, massive expansion of public transport, nuclear power e.t.c.

So when the oil production infrastructure comes back on line, demand will be dramatically reduced, hopefully also with a much greater public awareness of the reality of finite oil supplies, but still with enough supply in the ground thanks to the reduction in consumption to buy just that much more time to switch over to alternatives.

Not going to happen of course...but I wonder...

[J]

Well...if the US decides to bomb Iran into a moonscape and the Middle East goes to hell in a handbasket, you may well get your wish. You never know, a broken clock (GWB) may well end up being right, and in a way which could not be imagined.

[Edi]

As I have said several times in the past, biofuel wankers are completely ignoring the little fact that you can only harvest stuff so many times before the soil gets depleted. Fertilizers are one way of combating soil depletion, but those are mostly oil based. And when oil runs out, all the asinine fucks with their SUVs are going to demand biofuels in qunatity similar to gasoline so they can go on as if nothing's changed. Biofuels are basically a dead-end that will be usable for some specific applications in a limited role (such as public infrastrutcure), but it won't work for consumers because the demand is too high and production and supply will run into big problems in a very short time.

[TithonusSyndrome]

What we need is some way to dramatically slow production on the fields we have left over 5-10 years, without actually depleting the fields, like say destruction of chunks of the infrastructure.

I was pleased as punch when the premier of my province decided to go ahead with pumping some much-needed life into our oil and gas royalties, something like a 20 percent hike (!) or so. Already people with involvement in the oilsands here are moaning about how the major employers here aren't literally throwing wads of bills in the faces of unskilled laborers or anyone they can get their hands on or how new extraction or processing projects are being put off indefinitely. It's not like our province is going to get any poorer, and we'll have stretched out the supply by a mote, if nothing else. Maybe premier Stelmach actually knows what he's doing?

[The Duchess of Zeon]

We need an Oil Tyrant to seize control of the mid-east with Sandworms, lasguns, and weirding modules, obviously. By vigorously destroying oil extraction facilities he can bring the world economy to a halt and force us into a position where we must innovate non-oil fuel sources or else be dependent on his savage whims.

You know, when you read the original Dune series as an allegory for western oil dependence, it doesn't just make sense but carries a fairly powerful message of warning.

[Admiral Valdemar]

We need an Oil Tyrant to seize control of the mid-east with Sandworms, lasguns, and weirding modules, obviously. By vigorously destroying oil extraction facilities he can bring the world economy to a halt and force us into a position where we must innovate non-oil fuel sources or else be dependent on his savage whims.

You know, when you read the original Dune series as an allegory for western oil dependence, it doesn't just make sense but carries a fairly powerful message of warning.

There's a British novel out now about PO where a soldier serving in Basra tries to make his way back to his family at home when a spate of terrorist attacks on key energy installations globally brings the whole world to a halt. The chaos you see in Iraq daily starts manifesting in Smalltown, USA and London etc.

[General Trelane (Retired)]

I was pleased as punch when the premier of my province decided to go ahead with pumping some much-needed life into our oil and gas royalties, something like a 20 percent hike (!) or so. Already people with involvement in the oilsands here are moaning about how the major employers here aren't literally throwing wads of bills in the faces of unskilled laborers or anyone they can get their hands on or how new extraction or processing projects are being put off indefinitely. It's not like our province is going to get any poorer, and we'll have stretched out the supply by a mote, if nothing else. Maybe premier Stelmach actually knows what he's doing?

Maybe. At the least he didn't cave in to the threats of the oil companies.

Personally, I found those threats laughable. Yes, an increase in royalties will slow down development (especially of the tarsands), but considering Alberta's labour capacity is already stretched to the max, that's actually a good thing. And so long as there is still profit to be made, the oil companies will still be interested even if it's not today or tomorrow.

So yeah, I'm pleasantly surprised that Stelmach did raise the royalties substantially (though he didn't go as far as the report recommended).

[Chardok]

Solution?

I'm actually planting one. Not because of this, but...it's a good looking, fast-growing tree. With some research and investment in selective breeding, these trees could be dripping with the "black stuff"!

[ray245]

What about using geothermal energy or something? I've heard of that somewhere that we can use earth's core as a form of energy for people to use.

Sign...too bad people aren't keen on electric cars.

[Sea Skimmer]

Geothermal energy can only be extracted on an industrial scale in areas which are volcanically active, which does not account for much of the world’s surface. It’s not ever going to be a substantial source of energy, but geothermal heating and cooling systems for houses are pretty useful things. They can’t totally replace conventional heating and cooling, but they work really well when weather is not at one extreme or the other.