Friday, January 04, 2008

That Bubblin' Crude...

Listen to a story 'bout a man named Jed,
A poor mountaineer, barely kept his family fed.
Then one day he was shootin at some food,
And up through the ground came a bubblin crude.

Oil that is, Black Gold, Texas Tea.

Well the first thing you know ol' Jed's a millionaire.
Kinfolk said "Jed move away from there."
Said, "Californy is the place you ought to be."
So they loaded up the truck and moved to Beverly.

Hills, that is. Swimmin' stars.

How much difference might things have been in that classic TV show, were it to be produced in the here and now, and not in the '60's?
Would Jed be a Jillionaire?
What if he'd hit a patch of tar sands instead?
The possibilities are endless, and I'll bet the EPA would have had a prominent role.

This was the week in which Oil touched $100/bbl, but did not remain there for long. It’s just a matter of time, though, before it sticks.

I have learned better than to fear $100 oil, and now realize that this is the pain we all must feel to get to the next plateau. That's not going to win me too many friends, butI hope I can at least influence you to consider it this way: Which would you prefer—the government imposing additional taxes to inefficiently fund its version of alternative energy sources, or the higher price of oil creating organic economic stimulus in the private sector to create viable, efficient alternatives?

Efficiency is a key component, because without it, an alternative will not survive economically. If the government mandates a certain direction, however, we’re all stuck with it.

Look at the ethanol fiasco.
That’s not a good solution, because we’re now diverting corn crops from food production to energy production, resulting in higher food prices, and lower efficiency in the mixed fuel, which is also more expensive.
It's a horrible solution.

It’s a lose-lose in the long run.
But the government (with the support of the corn lobbyists) think it’s the best thing since sliced bread. (Ah, so many witty, metaphorical outtakes…so little time...)

One of my colleagues, Sam Hopkins, noted this week that no one would have imagined cooking dirt for oil when prices were in the $40/bbl range, but we have been able to develop oil sands technology with prices in the $80’s and $90’s.

The higher price we’re paying has a positive by-product of funding-as-we-go the research and technology development that will eventually result in our country being less dependant upon fossil fuels, and certainly wean us from the teat of foreign oil.

There are other down-stream benefits to higher oil prices that may well serve as stimuli for additional sectors, too, including innovations in new housing construction, and improvement of the energy transmission networks as we evolve into a culture of selling energy back into the power grid from individual residences.

Bottom line: higher oil is a fact of life.
It may well prove to be the very thing that stimulates us to a higher form of survival, too.

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