Another "duh" moment as they frantically elaborate what's been obvious
> SAY BYE-BYE TO CHEAP OIL
> March 28, 2004
> By PAUL ROBERTS
> For the tens of millions of American motorists patiently waiting for
> gas prices to come back to Earth, the news from the oil markets is not
> For the last year, 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 now offering a far less sanguine prognosis:
> Not only will oil stay high through 2005, but the days of cheap crude
> are history. These aren't exactly glad tidings for a global economy
> designed to run on low-priced oil, nor for a White House that gambled
> it could deliver low oil prices with a mix of diplomatic muscle and
> market liberalization.
> 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.
> This surge in capacity eventually brought prices down and helped
> buffer consumers from subsequent oil crises. When a disruption
> occurred - for example, when Saddam Hussein knocked out Kuwait's huge
> oil fields in 1990 - the world's other oil producers, such as Saudi
> Arabia, simply tapped their own surplus capacity and filled in the
> Now, however, the world's surplus capacity is disappearing. Many
> Middle Eastern countries lack the cash to expand production. Private
> oil companies are struggling to discover oil fields. Worse, even as
> industry worries about supply, global demand is growing far faster
> than predicted. And as everyone knows, when supply falls behind
> demand, prices head for the sky. Oil-price anxieties are especially
> acute among big energy users such as the United States, which burns a
> quarter of the world's oil production and whose economy is extremely
> vulnerable to price spikes. Indeed, nearly every severe global
> recession of the last 50 years has been preceded by a jump in the
> price of oil.
> That's why every U.S. 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.
> 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
> Sadly, Washington's cheap-oil strategy isn't working anymore. Hampered
> by terrorism and unrest, Iraqi oil production won't reach hoped-for
> levels for years. Political turmoil also has throttled oil booms in
> Russia and Africa. In short, the advertised wave of new oil that was
> to bring prices down hasn't materialized. Demand, meanwhile, shows
> every sign of increasing.
> 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. The
> world's most technologically advanced nation 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.
> And if U.S. voters aren't worried about oil, U.S. politicians aren't
> either. However, such complacence will soon be untenable. Despite the
> recent minuscule drop in gasoline prices, some forecasters believe
> prices will soon head back up and could crest at $3 a gallon by Labor
> Day - well past the point, experts say, when even oblivious Americans,
> and their elected representatives, start to pay attention.
> Eventually, all of us, from the man in the Oval Office on down, may be
> forced to concede that the days of cheap oil are over and that the
> United States really does need an entirely new approach to energy.
> Paul Roberts writes about the energy industry for Harper's magazine
> and other national publications. His new book, "The End of Oil: On the
> Edge of a Perilous New World" (Houghton Mifflin), will be published in
> May. He wrote this for the Los Angeles Times.
Thanks to NoVA Sprawl Weekly for sending this to me.
"Until you stop looking for simple answers, you will not be happy. You
will not even be human."