Oil prices set record
Oil prices set a record today when they rose above $100 a barrel for the first time. The U.S. Energy Department is predicting gas prices to soar above $3.40 a gallon within a few months, according to a story by the Associated Press.
The price jump has symbolic importance. The $100 per barrel figure has long stood as a icon of how expensive oil is becoming. But will it change consumer behavior -- for example, when people buy cars? If a person is willing to pay $10,000 more up front for a Hummer or an SUV, do they really care about an extra $5 or $10 when they fill up?
The author James Howard Kunstler is among those who predict that we've only just begun to see the beginnings of a massive oil price spike. In his newest book, The Long Emergency, Kunstler argues that world oil productivity quietly passed its peak years ago. But demand for oil, especially in China and India and other developing nations, continues to soar. So from here on out, the amount of oil pumped from the ground will gradually decline, and there's little people can do about it, Kunstler believes. Meanwhile, the rising demand will mean prices will quickly and dramatically escalate -- wreaking havoc on the economy. Here's a piece I wrote about Kunstler's ideas a few months back.
Any thoughts about gas prices out there?
I report on the environment and Chesapeake Bay. A native of West Virginia, I have focused mainly on Maryland's environment since moving here in 1983. Along the way, I've crewed aboard a skipjack in the bay, canoed under city streets up the Jones Fall from the Inner Harbor, and gone deep underground in a western Maryland coal mine. Recently, I have been covering the growth and development transforming the landscape. I love seafood, rambles in the country and good stories. I hope to share some here.
Comments
It was rumored that the assassination of Benazir Bhutto would be responsible for an increase in gasoline prices. The possibility for a Democratic Government in Pakistan resembles a similar situation to the extremely influential movie, "Syriana" where the murder of the Democratic promoter was essential to the control of oil. Whether this has any bearing and relation to the situation with Bhutto is yet to be seen, but the consistent effort to keep all the oil in the world in the hands of a few will be the situation for years to come. The oil companies have done their best to shut down the inventions that would ruin them: i.e. the well performing electric car in California, as well as billion dollar buy offs to the inventors of new energy research all of which would help the world out in such a political struggle. Economically, though, it might be the correct move to expend the resources available before moving to a different source. When the product becomes scarce enough, the people will respond. It all depends on how far the major companies are willing to stretch the tolerance of the people of the World. The next best move, which we are already in the midst of seeing, is the extreme differences in price across small regions. Have gas prices be outrageous in the suburbs and urban areas, and cheaper in rural areas. The barrier is being breached though, and it is only a matter of time before people begin their own interventions and pioneer their own designs to save money. It all depends on the opportunity cost of being either a slave to the system, or a scientist driven to energy research so they can afford to drive thier children to soccer practice.
Posted by: Achilles | January 2, 2008 3:51 PM
The higher the price of gas the better it is for the environment. It makes people look for alternatives and alternatives become more economically viable.
Posted by: cheflovesbeer | January 3, 2008 1:27 PM