February 24, 2011

Energy independence

by Nori — Categories: Economics, Energy, Government, PoliticsComments Off on Energy independence

This morning in my CNS News Brief I saw this –

Oil Shock By Rich Galen As an expert in the area of predicting gasoline prices, I am willing to bet a Starbucks Grande Mocha that we’ll be peeking at $4.00 per gallon gasoline by this summer — $5.00 in California. At some point, higher oil prices will put enormous negative pressure on the fragile economic recovery in the West

I honestly hope the uprising in the Middle East causes the price of oil to “necessarily skyrocket.”  Yeah, I can hear you gasping at me, but listen to my reasoning.

We are not going to become energy independent until the general hue and cry over the cost of foreign oil (the primary source of our diesel, home heating oil, gas, airplane fuel and propane) in this nation becomes overwhelming.  It must be loud enough to drown out those people who are getting rich by advocating Americans should live in mud huts and bicycle everywhere to “save our planet.”

As the price of oil rises, the transfer of the additional cost for that oil will trickle down to everything in our economy.  I really do mean everything, the cost of our food, the energy to run our homes and business, the cost of every product we manufacture, purchase and consume.  Remember, the cost of oil rises for the whole world, not just for us.  That means everything that China produces will cost more.  Every piece of produce grown here and in South America will cost more both to grow and to transport to our local grocer’s.  A significant rise in the cost of oil will effect every aspect of our lives and will, in some cases, significantly impact our standard of living.

Once the price of oil rises and everyone, even the little people, are crying because everything costs too much, we will finally step up to the mark and “drill here, drill now”.  We will build the needed refineries and nuclear power plants.  We just have to get into a position where we hurt enough financially to get our asses (aka Democratic donkeys) in gear and allow it.  Hopefully the fallout from the disruption in the Middle East means that time is fast approaching.

Now here’s the other shoe.  OPEC knows they have to walk a very fine line when setting the price of oil.  If they price oil too high and/or raise the price of oil too fast they give Americans the incentive to become energy independent.  With a “green” President in the White House OPEC can raise the price of oil quite a bit before the President becomes overwhelmed by people demanding we produce enough oil to become energy independent.  OPEC  is balancing the price of oil against the green movement’s rhetoric.  If the price rises too fast the voice of the masses will overwhelm the steadfastness of the green movement and OPEC will drop the price of oil and take the pressure off so there’s no incentive for us to “drill here, drill now.”  Don’t believe me?  Just watch.

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