Say Goodbye To Cheap Oil - Boston Globe

[hatrack]

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"Government forecasters have reassured us that the unusually high oil prices we've seen since 2002 -- around $30 a barrel -- were temporary: As soon as global markets recovered from the mess in Iraq, oil prices would drop and gasoline prices would eventually follow. Yet nearly 12 months after "victory" in Iraq, oil prices are at an eye-popping $38 a barrel, or about $15 above the two-decade average, and some forecasters are offering a far less sanguine prognosis: The days of cheap crude are history.

What happened? In simplest terms, what we're seeing are the final months of a 25-year oil boom. That boom was sparked by the oil shocks of the 1970s, when sky-high prices touched off a feeding frenzy among oil producers. Eager to cash in on the good prices, oil companies and oil-rich states drilled thousands of new wells, built massive pipelines, developed fantastic exploration and production technologies, and generally expanded their capacity to find and pump oil.

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That's why every US president since Richard Nixon has sweated bullets to keep prices down -- mainly by bullying producers such as Saudi Arabia but also by helping oil companies develop new production capacity outside the Middle East. Both George Bush the elder and Bill Clinton worked assiduously with Western oil companies to tap new oil fields in the Caspian region. That also explains why the current administration has so aggressively courted new allies in oil-rich (if democracy-poor) West Africa and Russia. And why White House strategists saw Iraq -- and the much-awaited "flood" of Iraqi oil -- as key to lowering world oil prices, bolstering the US economy and ending OPEC's 30-year stranglehold on the global oil market.

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Barring the unexpected, oil prices have no place to go but up -- and the United States isn't well prepared for a high-cost oil future. It has made only feeble efforts to develop alternatives to oil or to improve fuel efficiency, especially in cars. And though some of this reluctance is cultural -- Americans like big cars and hate being forced to conserve -- the main factor is economic: Oil has been so cheap for so long that most consumers simply don't worry about the risks of relying so heavily on a single fuel."

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[stepnw1f]

1. I Was Waiting for This Prpaganda

This will be used to justify the attack on Iraq. Just wait and you'll see them use this one. Notice all the Peak Oil messages here? Why now?

[dkf]

2. Maybe because we're peaking?

Makes sense to me.

[phantom power]

3. some may try,

but the author's point is the opposite: one point he's trying to make is that oil is going to continue to be expensive no matter who we invade.

Adapt, or die.

[brokensymmetry]

4. Take a look at the author -

his name is Paul Roberts, and he has written a book about peak oil. So part of this may be him filtering the data through his personal perceptions.

And yet...I think that Peak Oil is a reality that a very few people are beginning to recognize. We're lucky to have Hatrack - he posts some excellent items on the subject!

[Miss Authoritiva]

5. Oh, it was so much fun the first time around...

I am dating myself here, but I lived through the oil/gasoline crises in the 1970s as a more or less independent adult with a crappy Ford Pinto to feed and an apartment with virtually no insulation. I remember getting up at 4 in the morning to buy gasoline, an immediate 30% jump in my monthly rent, and all sorts of other goodies (including people siphoning gas out of my car). Thirty years later I am angry (but not puzzled) at the fact that so little has been done in preparation for the day when the planet is finally sucked dry of oil. I think the least of our problems will be getting up at 4 am to find a gas station with a pump waiting time of less than an hour.