High Fuel Prices

It used to happen overnight while you were sleeping but any semblance of being sneaky about it has been discarded.  Now it happens before your very eyes and can even happen while you are pumping gas.  Prices at the pump that had jumped twenty-five cents a gallon overnight now jump thirty-five cents or more in a matter of minutes in broad daylight.  I have even heard of gas prices going up as people fill up their vehicles.

Unless you work for an oil company you are probably concerned about gas prices.  You should be.  The cost of fossil fuel derived energy will never ever go down.  Let me say that again to make sure you caught that one.  The cost of fossil fuel derived energy will never ever go down.  Period.  Prices may dip temporarily but they will always go back up – and higher than they were before.  Any energy created from fossil fuels is from a finite source which means at some point they will run out. 

What does this mean?  From a purely economic standpoint it means that the price will continue to go up as the supply goes down.  And go down it is.  America’s appetite for oil is massive and has increased year after year.  What we consume here in the States is nothing compared to what will be devoured by China and other developing nations.  But at least we have the “strategic oil reserves.”  Yeah, right.

Think about this for a minute.  Most people are shortsighted enough to believe that these reserves are there for the nation.  They think once fuel prices are high enough the government will open up a valve and flood the market with gas thereby bringing the price of gas down.  The last time this happened it had a two cent per gallon impact.  Wow.  Truth be known you will not have to worry about gas prices getting too high.  Once the oil gets closer to running out regular people like you and I will not be able to find gas – let alone buy it.

The military machine runs on oil.  Everything except nuclear aircraft carriers, nuclear submarines, and nuclear powered naval ships runs on oil.  The United States military is the single largest consumer of energy in the world.  The Air Force alone consumed more than 2.6 Billion (yes that is “Billion” with a capital “B”) gallons of fuel in 2006.  This is not an attack on the military so save your “the military keeps us safe” speech for a politician whose children will actually see active duty.  The point is this – if the military machine runs on oil, and oil is in short supply, who do you think is going to get access to it?  You in your personal car or the jet flying the perimeter defenses around our air space?

So where does this leave us?  Good question - the proverbial white elephant in the room.  There are several possibilities that I will touch on in this new series articles.