Sunday, April 30, 2006

Oil Business as Usual: Shortages and Higher Prices

It is obvious to everyone now that it is business as usual in the oil industry with nothing being done for immediate impact by the President or Congress.

They are all sitting around fat and pretty telling each other stories about how much better things will start to be after 3 or 4 more years.

They are funding a study to develop enzymes to turn organic cellulose to ethanol which should if it works out, be more economical and environmentally friendly that the method to make ethanol today from corn.

Did you know that Congress and the President also made it illegal to import ethanol into the United States "because it would hurt the American farmers and create a precedent to import ethanol that we may never get away from in the future, thus creating a long term dependency on the importation of ethanol".

We all know about the story when someone does not want to do something they form a committee or do a study.

Hundreds of millions of Americans want to know that they have reliable energy at an affordable cost. Right now there is no real disruption in the world affecting the delivery of oil, or gasoline, or diesel, or home heating oil, but the arbitrager have bid it all up to around $70 per barrel recently. There is no real reason for it. But we all know that the oil marketplace is fragile and we have experienced shortages and excessive prices in the past.

Pat Buchanan, past US Presidential candidate, said on national TV this Sunday, April 30th, 2006 that if there was any military conflict with Iran, oil would shoot up to $200 per barrel. Leadership in Iran continues to threaten America and the survival of Israel. Iran can reach Israel with their missiles today. It appears Iran is willing to remain belligerent and has plans to disrupt all middle east oil transport. It would not surprise many people in the world including the Iranians if their nuclear plants were bombed in the next two years by Israel or Bush.

The main link above is President Bush's Department of Energy website. It appears that they are primarily bean counters, without any immediate drive to steer America's energy policy so that we will not face shortages and will be able to obtain it at a fair and reasonable cost. Current windmill electric and ethanol production are drastically insufficient to meaningfully impact America's energy requirements. There is nothing on the immediate horizon to impact it either. It will take at least 10 more years to start having any measurable impact with the enzyme processes to create ethanol or to convert over to hydrogen fuel. It is business as usual for the next several years.

A few people die every year with severe heat during the summer and severe cold during the winter. With energy prices poised to double or triple during the next couple of years, there is the potential for many more people to lose their lives. Supply interruptions or shortages can kill many more.

It is a cardinal sin for the President and Congress not to do anything right now, that would enable immediate relief in energy for American citizens. Are you already sick and tired of high energy prices with the potential for even higher prices and even shortages? Have you written to the President, your Senators, your Representative, the editor of your newspaper, your state and local representatives, and your local political party chairperson? Ask them why we aren't doing more to elliminate America's dependancy of foreign oil. Do you hold them responsible for high energy prices and potential shortages? Let them know.

Below is President Bush's own Department of Energy website describing synthetic oil production accomplished here in the United States after World War II. America has the experience to produce gasoline, diesel, and natural gas equivalents from coal. It seems much of the technology was taken from the Germans at that time. The Nazi's had little access to petroleum so they built a couple of dozen synthetic fuel factories that adequately supplied them with fuel until the allies later in the war bombed them. And the Nazi's built the synthetic fuel plants very quickly. There has been little said about developing synthetic fuels in America which could lessen the potential impact of higher prices and shortages of foreign oil.