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The one oil statistic that really counts is price. As long as the
price of crude keeps going up, we can reasonably assume that oil is growing more
scarce in the real world. I know there are other variables that affect the
oil market on a weekly basis, such as supply disruptions, but as long as the
overall trend is up, which it has been for at least two years, it means the
supply/demand ratio is tightening.
Just last year a lot of the oil "experts" were saying oil
would soon return to the $30 range, not. There's more going on in
this market than just short term supply problems.
I noticed the usual suspects from the American Enterprise Institute and
Cato Institute were all over the media over the past few days commenting on the
President's new alternative energy initiative announced during the State of the
Union. Saying that if alternative energy could compete in the marketplace
it would not need subsidies. Amazing how these lords of pure market
capitalism conveniently overlook the incredible competitive market advantage oil
has received due to an activist American government that has spent the past
eight decades subsidizing the oil trade in one way or another. Be it
building the massive federal highway infrastructure that provides oil an
automobile market in which to sell oil, or massive tax credits and
below market value royalty payments for oil exploration on government land, or
the military protection oil has enjoyed for so many years (including coups such
as the Shah of Iran and the invasion of Iraq), which has now ballooned to over
$100 Billion per year in military spending for oil protection missions of one
kind or another (we might as well change the name of the military to the
Petroleum Protection Service). If oil had to pay for that service, we
would be paying at least $1.00 more per gallon at the pump. I wonder what
that would do for oil's competitiveness? Exactly why I can't take clowns
like the American Enterprise Institute and Cato Institute seriously, they are
not honest defenders of free markets, they are little more than whores for the
status quo.
A good book to write would be one that chronicles oil's relationship to the
American lifestyle. That would be an interesting read, virtually mirroring
American history over the past century.
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- Re: Energy John Coviello
- Re: Energy hohlrauml6d
