Another writer finally "gets it"
- Another "duh" moment as they frantically elaborate what's been obvious
> SAY BYE-BYE TO CHEAP OILThanks to NoVA Sprawl Weekly for sending this to me.
> 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.
"Until you stop looking for simple answers, you will not be happy. You
will not even be human."