For the first time in awhile, I read the OpEd section of the Cleveland Plain Dealer. I used to read it all the time. Given the sorry state of affairs in Cleveland, I try to stay away from local news. But alas, I was in a dentist's waiting room while my girlfriend got her wisdom teeth out, and there was the Metro section laid out in front of me. A piece by Paul Roberts got my attention real quick. The link is from yesterday's San Jose Mercury news. (NOTE: For some reason, the online version of the Plain Dealer did not have a link. It's also interesting to see the different headlines papers use for the same articles. The Plain Dealer had it as "The oil boom goes bust - low gas prices are history.")
Roberts writes for Harper's magazine covering the energy industry. According to the bio, he's got a book coming out soon. You can bet I'll be reading it.
This piece relates directly with what Richard Clarke has to say. It's all about strategy. Poor strategy, that is. While Richard Clarke points out faults in the way Bush administration faced terrorism pre-9/11, Roberts highlights another failure of policy.
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.
The current administration has aggressively courted new allies in oil-rich (if democracy-poor) West Africa and Russia. White House strategists also saw Iraq -- and the much-awaited "flood'' of Iraqi oil -- as key to lowering world oil prices, bolstering the U.S. economy and ending OPEC's 30-year stranglehold on the global oil market.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.
I wanted to get accurate information on inflation-adjusted prices of gas for this post, just for comparison.
U.S. gasoline prices climbed to a nominal record average of $1.80 a gallon nationwide, according to the latest Lundberg survey of 8,000 stations across the United States.But that was still below the inflation-adjusted record set in March 1981, Lundberg said. The March 1981 combined average for all grades was about $1.38, the equivalent of $2.85 in today's dollars.
However, if Roberts is correct, we'll see gas prices peaking by the end of summer. If that happens, I'd wager that you'll see Capitol switchboard operators and mail carriers working overtime. But if this is what it takes to force progress, then so be it.
[...] 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 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.Many motorists and some opportunistic politicians will reflexively point the finger at greedy oil companies and nefarious ``foreigners.'' But eventually, all of us 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.
Bring on the hydrogen infrastructure.