The price of Gas...

Here we are, its a new year and the price of gas is down...wow...that's great. So, start up those SUVs and let's hit the road!

There is very little in the Universe that is shorter then the memory of the general American population... in a crush one moment, then over it the next. But it is time to focus on the facts and to take steps into our future. The total amount of oil in the ground... that is recoverable oil... is less by millions of gallons per day...hell, less then millions of gallons per hour!

The world is a small place with well defined natural resources...and as there have been no planetary reversals...no new swamps and dinosaurs to crush and churn into oil...well...the total amount of oil reserves will never be more than it is today and therefore the cost of these reserves, when facing a normal economy, or one of growth, will increase as supply drops and demand remains the same or grows. Our current pricing of oil ...at around $50 a barrel... has been driven down by low demand and a higher then needed (competitive demand) production level. This is a temporary dip, not a longterm thing...oil is not renewable and as it becomes more scarce its price will most assuredly rise to the $100+ level per barrel again, and probably not too far down the road.

The only thing that can impact this is a removal of fossil fuels as the primary source of energy for transportation and reduced use of it for electrical power. If we reverse the demand curve for these fuels we will see a stabilization of price per unit as these resources are turned to meet other industrial demands, like the production of plastics and acrylics. Oh, the price of oil will go up, but at a slower rate and with less impact on the economic environment in developed and developing nations.

Our selection of other resources to meet our general energy needs will effect the price demanded for oil, and extend its useful life span by decades or perhaps centuries. Oh, and there are positive side effects to be gained... less pollution, improved energy supplies delivered by renewable fuels...and perhaps less global warming! And for the inventers and corporate bodies who create these new channels...there is increased profit and new jobs here and worldwide.

But with our memory so short, I guess we have forgotten the crisis... Oil is back and we have happy days...but watch out, OPEC is going to lower production again at their next meeting in two weeks, and again after that...so, maybe we should do something? Perhaps...