Posted by
Duane Truitt on Tuesday, May 13, 2008 5:10:50 PM
It's been a very long time since my previous post (9 months!), as I've focused on other things in life ... mostly good things, like becoming a grandfather and watching my son and his wife become parents (in its more challenging aspects, this process is called "payback", but humor aside, it is wonderful to see two young people suddenly become responsible for a child, and see them take on that responsibility so lovingly) ...seeing my daughter get engaged to a great young man - an Army captain, West Point grad, and Afghan vet Blackhawk driver - and prepare to accompany him shortly to a new post in Asia. Not to mention my getting very close now to 33 years with the love of my life. And then, of course dealing with friends, business stuff, and life in general makes it challenging to find time to blog.
Not that there hasn't been a lot going on in the world in the meantime.
In the last year it's been so satisfying to see the remarkable turnaround in Iraq, and to see my faith in our American military and our Commander-in-Chief so well rewarded. The Presidential politics in 2008 have been interesting - my first choice (Rudy) never got out of the starting gate, but at least my last choices (Romney & Huckabee) also finished way back in the pack. John McCain is a good man who usually tries to do the right thing, and I believe he is a capable leader, and perhaps a centrist-leaning Republican is the Party's only hope in a year in which the voters are itching for change. If McCain wins in November, I won't be ecstatic, but I'll certainly be relieved that we dodged a bullet yet again.
What is really piquing my interest of late is the energy business. The recent run-up in crude oil and gasoline prices is surely upsetting what had been a fairly stable and boring industry, and is likely to accelerate political, business, technical, and social changes that we cannot begin to foresee.
For most of the last 30 years or so, the world of energy production and use has remained rather static. Oh yeah, there's been a few peaks and valleys in oil prices and availability - the run-up in the aftermath of the Iranian revolution and American hostage-taking in '79 ... the big Saudi production glut in the mid-80s that seemed to effectively squelch any and all Western efforts at developing alternatives to OPEC petroleum ... Three Mile Island, which also did its part to strangle the American nuclear power generating industry ... and various fluctuations in supply and demand that more or less kept the price of domestic gasoline hovering between $1 and $3 a gallon, which has been quite low by European standards. Most Americans thought and did little about energy conservation, and simply enjoyed cheap and abundant energy supplies as if it were a God-given right.
But then, in 2005 Hurricane Katrina sent gas above $3 for a little while, after which it settled back down to mid-$2 range ... and then started climbing back again ... there was always a reason given for the rising price (ever since Katrina) of crude oil or gasoline prices ... the rising price of crude was blamed for awhile on a shortage of American refining capacity (which seems a bit out of kilter, since the less refining capacity we have, doesn't that make the effective demand for crude oil go down? and vice versa?).
And then the price of gas was also blamed on a shortage of crude oil, because China and India are burning more, or because the Nigerians aren't producing as much, or because the price of tea in China went up a buck .... whatever. The growing price of gas was also blamed on our growing American economy, which was said to have boosted demand for energy ... that is, until the economy stopped growing at the end of 2007. And now the experts say we've been in a recession, and Senator Schumer says its another Great Depression ... yet the price of gas and crude oil just keeps going up, even more and faster.
Huh?
It has seemed that no matter what, it's "heads I win, tails you lose" - from the perspective of the crude oil producers, anyway - when it comes to energy prices. Natural gas is skyrocketing too.
So what gives?
I dunno.
Perhaps nobody knows.
Or perhaps the oil cartel, otherwise known as OPEC, knows very well.
Perhaps the desert sheiks of Arabia and the comrade Colonel guy in Caracas and perhaps also the dapper former KGB Strong Man in Moscow know exactly what's going on, and why, because, well, they're a cartel that controls much of the world's oil supply. Apparently these guys have decided that it's time that they cranked down the supply, ever so slightly to just under-supply current market demand, just enough so as to maximize their current revenue curve. The Saudis alone could easily crank open the spigot and send crude oil plunging to any target price their little hearts desire. But instead they tell our President that it's his damn fault, so live with it.
So why now?
Again, I dunno.
But I suspect that the OPEC guys know very well why they're doing now what they're doing.
Maybe the Saudis want to build another massive skyscraper city in the desert, or another faux archipelago stuffed with luxury homes and megayachts in the Arabian Sea. Maybe Comrade Putin wants enough rubles to build a saber long enough to force all those former Soviet Republics back into the Russian orbit. And of course, we all know that Col. Chavez wants to conquer the Americas and rule his long-overdue Bolivarian empire from Caracas.
Those are certainly some plausible reasons for cranking down on the rest of the world's national economies in order to generate some short-term bucks now.
But still, why now, rather than five or ten years ago? These guys could have been doing the same thing six or seven years ago, in the immediate wake of 9/11 and the subsequent US invasions of Afghanistan and Iraq. But they didn't. Instead, they waited until George W. Bush became a lame duck, with Katrina hanging around his neck, and with a foreign intelligence network that was thoroughly discredited, and with a war-weary American public that simply didn't want to even think about war another minute longer.
Interesting how that works, huh?
There's a lesson in there somewhere.
The so-called energy crisis certainly not about the supply of oil, which has been growing rather steadily, actually ... it seems that every month we hear about some major new oil discovery somewhere, such in the northern Great Plains, and off the Atlantic shores of Brazil. We still have about 85% of our American oil reserves roped off from any development whatsoever, for environmental reasons, in the Gulf of Mexico and offshore of both our Atlantic and Pacific coasts, plus there's ANWR in Alaska, which has been saved for our sensitive Carabou. We're definitely not running out of oil, and the higher the price of oil, the more that we find. Strange, isn't it!
Our oil supply is mostly a matter of technology, and investment, and the human profit motive that causes us to find more and more oil in places we never even considered just a few years ago.
It's not about the demand for oil either. No matter how much they tell us that it's those darned Chinese and Indians who are sucking up all the world's resources for virtually everything - oil, construction materials, rice, curry, whatever - the increasing demand in those two countries has not been so astronomical as to increase world oil demand THAT much in just the last year, in my humble opinion. But the Indians and Chinese do make a convenient whipping boy on whom to blame everything that we seem to be short of. They're so "foreign", for one thing ... and pretty much everybody in America feels free to dump on them, because the Indians and Chinese generally don't issue death fatwas and come after you with vest bombs when foreigners say unkind things about them ... like some other groups we know of.
So, maybe it's just a matter of being held hostage by some very rich very bad guys who happen to have our you know whats in the ringer when it comes to the oil supply and demand equation. And coupled with a whole lotta stupid lawmaking in our Democrat-controlled Congress.
However, we are not helpless in this matter. We are Americans, for gosh sake. We don't take it very well when somebody - like the Brits and their stamp taxes, or Muslim terrorists and their box cutters - triy to stick a hot poker up our nether regions. We generally get mad, first ... and then we get more than even. We have options, truth be told. We also hold elections that matter - unlike those oil cartel countries.
Layered on top of the current supply and demand machinations in the world of energy, there is also the rather silly debate over anthropomorphic global warming (AGW), and what to do about it, if anything - a debate which is now reaching a crescendo of fervent discussion and possibly even US governmental regulatory action - at precisely the same time that it is now evident that the earth is moving into a mult-decadal cooling phase, perhaps even a mini-ice age. How rich!
In any event, it seems that the preferred solution to a non-existent crisis is to clamp down on the use of hydrocarbon/fossil fuels, even as the price of a major component of said supply of hydrocarbon fuels - petroleum and natural gas - is skyrocketing past record levels.
And all of that - energy - is what I am going to blog about for awhile, in this and other posts to come.
I want to make sure that people who read this blog understand what some of our options are ... technologically, politically, economically, and individually. And I want to clear out some of the cobwebs and bad information and incomplete information in a debate that is about to get turned on its head in the next few years.
Energy is literally what we run on.
Energy (coupled with technology, which creates demand for energy) today drives almost every other issue of social, political, and technological significance in today's world. Energy even dominates religious competition, in that the fact that many of the world's energy "haves" are purposely using their new energy wealth to fund a worldwide Jihad, a Jihad whose purpose is nothing less than the eradication of every other religious practice but Islam. (and then after only Muslims are left, the Jihadists will complete the work of eradicating every other sect of Islam but their own).
Energy, and the way it is acquired, delivered and used, is dominant in today's story of life and civilization much in the same way that gold, and the search for it, coupled with expanding worldwide trade, drove the European colonization of most of the rest of the world in the Age of Discovery.
We have a lot to consider, and talk about, when it comes to energy in the early twenty-first century.