Thursday, July 13, 2006

Oil Reaches $78 a Barrel

I noticed this morning that light sweet crude had soared past $76 a barrel and tonight I heard it's now soaring past $78 a barrel due to the trouble in the Middle East; here's the story from ABC News:
Oil prices continued trading above $78 per barrel Friday as continuing violence in the Middle East raised concerns of a possible disruption of oil supply.

"We are certainly in uncharted territory," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "I wouldn't be surprised if $80 is attained soon with this slew of geopolitical events in a tight market."

Uncharted territory. That's one way of putting it, I suppose. The smartest thing George W. Bush could do if he was truly concerned about restoring order quickly before things get out of hand is to force Cheney to step down and ask Congress to make Bill Clinton the vice president and create a true bipartisan foreign policy team. But one can't expect too much of this president. It would be a vast improvement if he simply brought in a crack team of moderate Republicans and maybe a couple of Democrats.

Everything depends on facts right now just as everything has depended on facts in the last five years during a time our president has felt free to manipulate the facts. I won't even pretend to have enough facts right now to say much but a quick survey of a number of sites suggests everyone needs to catch their breath. What we have been seeing in the last ten days or so is that the United States (via President Bush) is not the only country in the world that can behave stupidly. If Bush is changing his ways, he waited about a year too long. If Bush is using events to play games, the Americans people will not gain any benefit from it. But I would caution against speculating too much until more is known.

The longer the crisis in the Middle East lasts, the higher gasoline prices are likely to go at the pumps. If the federal government is slow to respond, state governments may need to take their own action to mitigate the consequences of high prices. I haven't had time to check but the last time I looked, which was several months ago, the United States was not adding oil to our strategic petroleum reserves (we can probably blame Karl Rove for that one; it was very much a political move). We can easily make up for any shortfalls in our reserves by conserving oil now in case things get worse.

It would be useful to start reading The Oil Drum for the latest on fossil fuels and other possible sources of energy (don't take too seriously Prof. Goose's title, "And So It Begins..."; people have been saying that for a hundred years now for one crisis or another). The Oil Drum believes that Peak Oil may be coming sooner than later and while the timing hasn't been settled yet (at least to my satisfaction), it's clear the world is experiencing an energy crunch that could last at least several years, maybe longer. At the very least, there is a high risk in the coming years of continuing supply disruptions and we need the capacity to deal with that. In any case, there's considerable expertise at The Oil Drum and about half of it is accessible to the layman.

For those who wish to know why oil prices are so high, The Oil Drum offers this link on the basics (originally posted in early March). And if you wish to do something about high prices, The Oil Drum offers another link that originally appeared in late April. In the end, I'm afraid Bush's legacy may be that he should have spent $500 billion on alternative energy R & D instead of wasting it on a misbegotten war in Iraq. But this is now, instead of then, and we need to get on with it.


Anonymous Anonymous said...

If I remember correctly, once upon a time Bush and his Repub co. were actually encouraged the wasteful living style and indicated that American has the "right" to live wastefully (yeah!! I know we're God choosen people and everyone else will be lefted behind during the 2nd coming - so screw them). There is no need for sacrify....because everything is supposed to be OK. Of course lot of suckers believed in the administrative's agenda, and anyone who thinks different is "anti-America", "liberal", "anti-Christian", blah blah blah. I just love the way the administration uses libel and labeling drowning down its opposition. Amazingly lot of people in this country were feverishly supporting Bush. Are they products of "Intelligent Design"? If so some thing must be very wrong with the Designer!

7:59 AM  
Anonymous S.W. Anderson said...

"The smartest thing George W. Bush could do if he was truly concerned about restoring order quickly before things get out of hand is to force Cheney to step down and ask Congress to make Bill Clinton the vice president and create a true bipartisan foreign policy team.

That's a perfect blueprint for blowing the misbegotten right-wing Republican coalition to kingdom come (pun only partly intended). The current unpleasantness in Lebanon and Gaza would probably look benign compared to how the likes of Sens. Inhofe and Brownback would react in D.C.

Even if that wasn't the case, your idea requires President Bush to listen to someone besides Cheney and Rove who knows what he's doing. There's no evidence to suggest the president could or would attempt such a thing.

Finally, there's the matter of personal animus. I think George W. Bush would rather be drawn and quartered on the White House lawn than accept even a brief phone call's worth of policy advice from his predecessor.

6:57 PM  
Anonymous S.W. Anderson said...

Re: oil prices and disruptions.

As Bush, Cheney and the right-wing GOP establishment would have it, our problems are all attributable to those who've stood in the way of extraction industries doing their thing whenever and wherever they want to.

Current difficulties serve to strengthen their hand politically, of course.

Consider, it won't take the many Americans who drive an SUV 60, 75, 100 miles each way to work and back five days a week very long to calculate their need for readily available, affordable fuel, as against their likelihood of ever heading up to ANWR for a look at undespoiled flora and fauna, or their dismay about derricks blocking sunset vistas off coastal shores.

So, don't be surprised if for Bush and a key segment of the folks who brought him to power, this turns out to be yet another outcome of heads, he and they win; tails, the rest of us lose.

7:17 PM  
Anonymous Craig said...

S.W., thanks for the comments. In the first comment, you read Bush correctly regarding the Clinton suggestion.

I mentioned Clinton for several reasons, not the least of which is that I'm disgusted with Bush's 'woe is me' nonsense. Bush and his advisers are bereft of ideas because they're still stuck in their radical ideology (despite some minor changes). Even traditional conservatives would have more ideas at this point than that crowd. Another reason I mentioned Clinton is that he still has far more credibility as a world figure than Bush despite being out of office for more than five years. If there's anything Bush needs is more credibility; credibility would be preferable to looking like a deer in the headlights. Finally, Bush admires Winston Churchill but Churchill, although a conservative, was about ten times smarter and had the brains to put together a true coalition government (FDR did the same) during WWII. Bush is incapable of being that imaginative. Too bad. Too bad for all of us.

As for oil prices, events may start tying Bush's hands, particularly if Americans decide they've had enough of Hastert and Frist. The oil companies may be happy with the high oil prices but I can guarantee most other corporations are not; they're more honest about the numbers than Bush and promises of more drilling simply isn't going to cut it anymore. The ground is already shifting. Of course, if Bush can find a way to turn things to his advantage, even if temporarily, I wouldn't put anything past him.

12:18 AM  
Anonymous S.W. Anderson said...

Craig, that Bush has even a shred of credibility left with anyone continues to amaze me. And I don't amaze all that easily any more.

1:53 PM  
Anonymous Anonymous said...

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1:08 PM  
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9:49 AM  

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