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Another writer finally "gets it"

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  • Richard Risemberg
    Another duh moment as they frantically elaborate what s been obvious ... Thanks to NoVA Sprawl Weekly for sending this to me. -- Richard Risemberg
    Message 1 of 1 , May 7, 2004
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      Another "duh" moment as they frantically elaborate what's been obvious
      for decades:

      > 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
      > encouraging.
      >
      > 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
      > shortfall.
      >
      > 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
      > prices.
      >
      > 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.
      --
      Richard Risemberg
      http://www.living-room.org
      http://www.newcolonist.com

      "Until you stop looking for simple answers, you will not be happy. You
      will not even be human."

      RR
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