The Tulsa Forum by TulsaNow

Fuel prices are back at around $3.50 to $3.60 for unleaded, diesel is closing on $4.00 in the area.  Word on the radio this morning is that U.S. corn reserves are at a 10 year low due to demand for ethanol.  Metals and other raw material prices are on the rise.  Transportation costs to get food, finished goods, and raw material to their destination are on the rise.

What's all this mean?  It means the U.S. consumer has to pay more for food and other items they need to run their household.  But now they are spending $1.00 more per gallon for gas than this time last year, they have less money to spend on those consumer goods and food.  The only alternative to empty pockets is starting to clean out savings again or racking up credit card debt they may or may not be able to pay back at a later date.

I'm not usually one to put on a pessimistic face, but this can and will slow the economy and jobs will start bleeding again as demand at the consumer level goes down.  There's a perfect storm brewing which could really tank President Obama's shot at reelection in 2012.  I'm surprised nearly three years later we still have no workable energy plan in place and the administration and Congress don't seem terribly concerned about what can happen if gas prices continue to spike.  The DOE and EPA have also been complacent in coming up with any workable ideas to satisfy our need for oil while lessening our dependence on buying oil from people who hate us.

Sure there's been discussion about our energy problem: a windmill here, a solar farm there, buy more of T Boone's massive natural gas bets.  More ethanol which actually results in worse fuel economy.  Idle biodiesel plants because the industry is too heavily dependent on subsidies to be competitive.  Expensive electric cars only suitable for in town driving.

The reality is, the vast majority of our automobile fleet in the United burns gasoline.  Much of our mass transit fleet and freight transportation is dependent on diesel fuel.  There's not a reliable synthetic alternative to Jet A so far.  Solar energy and wind energy aren't alleviating our dependence on foreign oil especially considering where most wind farms are being built, we use natural gas, not oil in our fired electric plants.  Certainly we need to think of how we will replace fossil fuels as they become depleted and harder to recover.  To that end, we are thinking ahead.  However, we are simply not thinking of the immediate need for fossil fuels we are going to have for the next 20-30 years.

Nope, instead of figuring out how to harness less expensive oil closer to home with less political and national security risks we've been coloring rainbows.  It's sort of like calling the plastic surgeon for a face lift after you've been told you have stage 4 lung cancer.  

Completely agree.

We really need to start harvesting the oil we have here to get us by for the next several decades, and kick it into high gear on finding more permanent, reliable sources of energy. I also think we need to focus more on mass transit and sustainability. With more people walking/biking/riding a train to where they need to go the less demand for oil there will be. Simple conept, but several out in far right field are against it. Why? It kills the American dream, I don't know how it does, but it does. I know this is not the solution, but it will help. But back on topic, I'm pretty sick of the whole pretending we don't have oil here...we do. Heck, if you really want some, just go out to the Gulf Coast and scoop some up. ;D

When we use up everyone else's oil, we will still have some left.
 ;D

Mass transit and alternative transit are very important in the big picture, but (and coming from the viewpoint of a very avid cyclist) is one of the rainbows I said we've been drawing for three years.  It's a great future solution, but for Tulsa and OKC's brand of sprawl, simply not near as topical as lower gas prices.  Mention getting on a bicycle and most Tulsans blanche.

On a small scale, private industry is doing what it does best finding ways to profitably get oil to the surface.  Smaller producers are taking advantage of high oil prices right now picking up old leases and using all sorts of techniques to recover heavier oils which otherwise would never have been practical at lower per bbl prices.  Unfortunately, the feds are still finding ways to hobble the major oil companies in terms of production and refining.

Everyone I'm talking to says there's absolutely no reason for the recent run up other than the slightly more than usual unrest in the Middle East.

The speculators are jacking up the price because they can.  We need to use less to show them they can't.  Very difficult to do in a car oriented city and country.  I think we all know the rest of the drill.

The problem is that there's no easy or short term fix for price volatility.  This is why the petroleum reserve always makes it into the conversation when we're talking about rising gas prices; it's one of the only cards we have in our hand to, say, help moderate the summer price spike.

Even allowing new drilling -- which I'm in favor of -- won't bring new supplies online for several years.  I think Obama is onto that, too; he cut several months off the drilling moratorium he imposed after the Deepwater Horizon leak so that the gulf platforms could get back into the swing of things. 

It's gonna be just another fight, though.  I don't even think there's a lot of disagreement on the different sides of the aisle regarding what a new policy should encapsulate . . . but the budget battle is now A#1, and everything is rolled into that.  Especially if we end up going with a Ryan style budget, there'll be no money for R&D or to support fledgeling renewables in whatever energy policy comes after, and we'll end up doing nothing but coal and gas, because that's really the only thing we have an infrastructure for.

Also:  isn't oil a global market?  So that, regardless of what we produce in our country, we'll still pay mostly what we'd pay for Libyan (or Saudi, or Chilean, etc) crude?   

According to the TW, we are cutting back on our gasoline consumption.

http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20110412_49_E1_CUTLIN744458

The president says "get used to it."

After all, oil is the evil that feeds evil businesses and ultimately provides income to the evil rich.

We can fix this problem, but we won't, because our "leadership" does not view it as a problem. 

Jimmy Carter is proud.

(http://t1.gstatic.com/images?q=tbn:ANd9GcTkTE4EVLRXeVuVpu6mPszIUyCPG8_Pjal8VhWO5i14PvTIBGkyRg)

O-Tay

Of course, it might help if our SOE actually had worked in the energy industry rather than being a noted university physicist, living in a theoretical world.  In his utopian view of the world, he believes that we should pay more for gas to create demand for more efficient vehicles and technologies.  

"In a sign of one major internal difference, Mr. Chu has called for gradually ramping up gasoline taxes over 15 years to coax consumers into buying more-efficient cars and living in neighborhoods closer to work.

"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe," Mr. Chu, who directs the Lawrence Berkeley National Laboratory in California, said in an interview with The Wall Street Journal in September.

But Mr. Obama has dismissed the idea of boosting the federal gasoline tax, a move energy experts say could be the single most effective step to promote alternative energies and temper demand. Mr. Obama said Sunday that a heightened gas tax would be a "mistake" because it would put "additional burdens on American families right now."

No U.S. president has made significant headway altering America's energy habits during a period of falling oil prices. After hitting an all-time peak this summer, U.S. gasoline prices have sunk to their lowest level in years. Experts predict prices will remain weak until the world economy begins to revive."

http://online.wsj.com/article/SB122904040307499791.html

We've kicked this can down the road forever.  When gas prices first started heading toward $2.00 a gallon seven years ago, if we would have ramped up domestic drilling and refining capacity, we'd be seeing the fruits of our labors.  The excuse always is: "It takes years to get the fields developed and the oil pumping.".  Even if we would have started three years ago, we'd be three years closer to better independence.

We've also done nothing to reign in speculators who profit from pushing paper around never actually laying hands on the oil they buy and sell.  The rest of us pay the price for this.

As far as oil being a global market, oil is always priced in dollars, couldn't this also be a sign of a weakening dollar due to our inability to get our fiscal house in order?  This doesn't seem to be a supply and demand issue.

It's the same mistakes and apathy over and over again and we just don't seem to learn or simply don't realize the complete catastrophe to the economy $5.00 per gallon gas will be.  I'd heard on the radio we could expect it by Memorial Day if what experts are saying is correct.

FYI, it's down almost $7.00 from yesterday.

http://data.cnbc.com/quotes/CLCV1 (http://data.cnbc.com/quotes/CLCV1)

"Experts" said the same thing in that fateful July IIRC, telling us to expect $5 gas by Labor Day.  It didn't happen.

I just don't put a lot of weight on what 'experts' say in the oil business nowadays, especially when it's not the 'experts' that drive the price.  Unless those 'experts' are speculators.

Something else happened in the interim: the financial bubble burst. 

Unless the commercial real estate crisis which was supposed to happen is getting ready to take a big dump, I don't think there's any leading economic indicators which will put fear into the traders.   The only thing which might, would be several consecutive weeks of bad job news or a couple of months of diving GDP numbers.

Or investing in other technologies...(http://www.aspo-usa.com/assets/images/Pickens_T_0_1.jpg)

Point taken, but my point is that at some point, critical mass as it regards to gasoline prices always seems to hover around $4/gallon.  The experts scream 'expect $5/gallon gas by such and such date' and the three times I've heard this, it hasn't happened.  Not to say it won't, but these experts drive the speculators.  All my opinion, of course.

This is how they pump up their product.  Its going to be $5 a gallon, oil will be $5 million a pint.  You better buy now so you can make money as it rises.  Yadda Yadda. 

Why would you just make up words about what Obama said? Is that helpful to a good discussion about oil?

You are turning more and more into Glenn Beck.

Just what is it that these people do other than run the price up and line their pockets with our dollars?

Play golf and eat at Spago, I guess.