Marc Carlisle: It hurts to be right about rising oil prices
Let the count begin! Tuesday oil futures closed at $122 a barrel, double the price of a year ago when the same oil sold for $62. Then, as now, the experts assured us that the price was an aberration, an anomaly, a spike.
Then, as now, the experts insisted that the normal price range for oil is $40 to $75, and that $120 or more is just a really big aberration, a “super spike”. Then, as now, the experts are wrong. Six months ago, I told you that oil would hit $140 by Memorial Day, and with 18 days left, at a dollar a day I’ll be dead on with that prediction.
Reporters and columnists hate being wrong. Reporters, however, when they’re right, get to enjoy being right, reap praise and revel in that rightness. The world of opinion is a zero sum game; however, for one view to be proven right, then others must be proven wrong, which takes some of the pleasure out of a good cackle.
For example, the post office has no business charging annual fees for mailboxes when home delivery at no additional charge is part of the deal. I’ve said so repeatedly, but I’ll quietly consider the statute of limitations to have expired and be happy that the post offices will now at least deign to consider your application for a fee waiver, as if they were doing you a favor, because to be really right, we’d have to find out who has been really wrong levying fees for the past 20 years.
Six months ago, I wrote a retrospective criticizing the Bush Administration approach to the country’s energy security. Since 2000, the amount of energy we each consume has actually increased (increased!), partly the result of Presidential leadership-by-wishful-thinking that nuclear power, widespread drilling here at home, and ethanol would stop the environmental damage caused by burning fossil fuels and reduce our deadly dependence on imported oil.
This century has witnessed no new nuclear power plants online, or even on the drawing boards and no new petroleum production either out of Alaska or the Gulf of Mexico. In the former, the state’s Republican Congressional delegation is mostly under investigation for bribes and payoffs related to past oil largesse, while along the Gulf in Texas and Florida, the former Governors Bush both successfully catered to local politics rather than accept that their states had a role to play in our energy future. And the use of ethanol has grown, along with your grocery bill as farmers plow under wheat, rye, flax and soybean fields to plant corn for an additive that consumes more energy than it yields.
Has anything about oil supply and demand changed of late? No. Production is pretty much as expected. Sure, the Kurds in Iraq could interrupt production, and militants in Nigeria could do the same, but then they always could. Production is slowing in Mexico and Russia, but that’s nothing new.
If production and demand are as expected, why has the price of oil nearly doubled, and shouldn’t the price of a gallon of gas have doubled? The fact that it’s only up a smidgen should tell you that the price of oil or gas is not a function of supply or demand or cost of production.
The price is set arbitrarily; as for gasoline, I’d plan on $4.60, maybe even a brush with $5 by Memorial Day. I don’t know that for sure, of course. I only know that in the thirty five years since the price of oil first spiked, to $5 a barrel, we continue to react like a wet cat, and the best and only idea on the table is a gas tax holiday. I think that’s a great idea.
No tax saves me money, and without dedicated revenues I-70 will never be widened in my lifetime. Of course, we should raise the tax so you’ll change your behavior and use less, but if raising the price hasn’t worked in the past 35 years, why should it now.
Those likely to drive less, use less, and seek alternatives have done so. It’s too late for the rest ” if you think $5 gas is too high, you’ll think it a bargain in 2009 when it hits $7. Even then, you and I both know that you’ll still be driving too fast, too often, and all alone with Onstar and satellite radio in a Ford Excursion. That, after all, is how I know the price ” you’re so predictable it hurts.
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