$5 gasoline can be a real boon to conservation and energy resourcefulness; is American-produced natural gas the answer??

March 7, 2011

Maybe the free market or private enterprise really is the way to solve the so-called “energy crisis”.

Right about now a lot of us are wringing our hands about the impending $5 per gallon gasoline (and diesel) that seems surly to return what with all the upheaval in the Middle Eastern oil lands.

So pay the $5, I say, if gasoline is what you need. The real problem will be when you need that gallon of gasoline but cannot get it for $5 or at any cost. And that day could come. But when it does, someone will come up with an alternative to gasoline.

Now of course it would seem more sensible to come up with the alternative before the supply runs out and it all turns into a real crisis, but maybe that is just not how things really get done.

So far in my lifetime (61 years plus), I don’t think any of the spikes in the oil market (oil being of course the raw ingredient for gasoline and diesel fuels), have been the result of actual shortages, instead they have been the result of some kind of situation that could be used as an excuse for claiming a shortage or the result of so-called Arab oil embargoes that purportedly caused shortages thus giving suppliers an excuse to raise the price of gasoline. Yes, I realize that in some cases through the years there may have actually been some temporary disruption and maybe a shortage of sorts in the oil supply, but overall, not so much.

I’ve probably used this little story before, but it once again seems appropriate: During one of those so-called oil shortage crises (was it Desert Storm? — don’t recall for sure), my late wife was working for a fuel distributor. She told me that each morning her boss would call his fellow distributors (other companies) and ask them what they would be charging for gasoline that day, and that is how the wholesale price was set (sounds like price fixing to me). I did not hear about any real disruption in supply but the news of world events made it seem so, and in turn the suppliers apparently took advantage of it.

But of course today, regardless of what the actual availability is, there is pressure on the market, with emerging economic powerhouses, such as China and India, sucking up more and more of the energy supply, so prices are bound to go up — higher demand, higher prices. And when you add a political crisis in the oil lands — Libya most notable at the moment — to the equation, that is going to have an effect.

It would be better for the economy of the United States not to be so dependent or dependent at all on Middle Eastern oil or any foreign source of energy. But so far, apparently, the movers and shakers in the economy have not found it necessary or even prudent to move away from that model, despite calls to do that from various quarters ever since the first Arab oil embargo of the early 70s.

There is much resistance to our government forcing the issue on free enterprise, even though that same free enterprise, and the populace as a whole, will scream bloody murder and for help if the current supply runs out and will blame the government for the situation.

One suggestion has been the so-called drill-baby-drill option in which we totally exploit our own oil resources. To the extent we can do that without totally upsetting our environment — keeping that all-to-recent disaster in the Gulf of Mexico in mind — there is much sense to that. I personally don’t like the sight of oil platforms off the coast and am not sure whether it is really necessary to drill there. I think aesthetics are a vital part of life, but just as importantly, so is the eco-system, and drilling in sensitive areas poses a grave threat to life on earth. Destroying our planet in an attempt to preserve our way of life does not seem wise to me. But it does seem like there is room for a compromise or a logical risk/benefit assessment here.

Diverting food resources, namely corn, to ethanol (either by taking away animal feed or direct human feed) seems senseless, especially when, as I understand it, ethanol does not improve gasoline mileage or help the environment. But the farm lobbies and their compliant legislators have put the fix in on that one.

And currently in the news, the Obama administration is being pressured by some lawmakers and others and is considering opening up the Strategic Petroleum Reserve to ease the pressure on the oil market. It seems to me that such a move would be premature at this time, and obviously it is not a long-term solution for our energy problems, such as they may be.

And what I am trying to say here in all of this is that a little pain at the pump is a sure fire way to promote energy conservation and resourcefulness — remember how gasoline consumption dropped sharply and how everyone was parking and/or selling their gas guzzlers the last time gas hit $5?  I really could have just written that preceding sentence and not the rest — but I like to write.

And that brings me to a point: energy policy or at least the basis for making it should be the purview of actual scientists using objective reasoning, rather than what would be good for say, the corn market, or the natural gas market, or the oil market, or the wind machine producing market. But the powers that be tend to put the kibosh on publicly-funded research as much as possible, favoring biased commercial research (where you pay for the answer you want).

And speaking of natural gas — well I did mention it in the previous paragraph — KGO Radio, San Francisco’s Dr. Bill Wattenburg is pushing something he in turn said was suggested by radio land investment expert Bob Brinker, that is making the best use of a resource the U.S. purportedly has an abundance of, natural gas. Brinker suggests a quick and easy way to get the ball rolling without any new taxes or any requirements on business or the public by the government would be for the president to issue an executive order to convert the federal fleet of vehicles to natural gas. They claim that would spur the car companies to produce new vehicles that could run on either gasoline or natural gas and that in turn would make such vehicles widely available to the public at its own choosing.

Personally, I don’t have a clue, but here is a link to a letter they think you should send along to Obama (and I suggest you just skip the biased introduction and read the text of the letter, for what it is worth): http://www.uncoverage.net/2011/02/dr-bill-wattenburgs-solution-to-lower-gasoline-prices-by-2gallon/



It won’t be pretty, but I’m thinking that in the end the free market will solve or resolve the energy crisis. In general, people will no longer use what they cannot afford and will gravitate toward what works for them and at the same time energy suppliers or would-be energy suppliers will do what they can to meet the demand. I do think the government has a role in funding unbiased and practical research (funded at least in part by existing road and/or energy taxes).