Posted on 05/24/2008 9:24:38 AM PDT by BenLurkin
Kind of reminds me of the Beannie Baby thing back in the 90s. Now you can’t give the things away.
Their answer...”Yeah but not before you run out of money.”
Bingo!
The pressure this year is much higher. In order to drill and do many of the things needed to be done, people in government will have to change their votes on these issues. If they don’t change now, before and election, they will never change.
Your statement makes a lot of sense.
I have been thinking about the Chinese demand lately. It is my understanding that the government is subsidizing gasoline. It gives the appearance of progress for the people. I do wonder when the olympics are over and there is less attention on China as whole if this policy will continue. There probably is a segment of the Chinese population who would have to abandon there cars.
Don’t forget the earthquakes, though. China is likely to have an ongoing need for fuel brcause there whole towns/cities to rebuild.
The OPEC embargo of the late '70s and early 80s ended because we were making progress. There were roughly 4500 rigs drilling and oil shale research was promising then.
Rather than raise their price, they crashed it, guaranteeing that alternative energy would not be economical and collapsing our domestic oil industry.
If they could do the same, if they credibly believed we would do something besides wring our hands, and if they have the surplus capacity, they would do the same thing again.
This time, though, they have not imposed the shortfall in marginal supply so much as demand has, and while they could raise the price through reducing production, they cannot crash it through producing significantly more.
The effect of that is that they will become less important in the market as pressure on our politicians increases to open up more areas, and huge grants are let to find and refine alternatives to make them sufficiently economical to compete.
When we (or exporting countries friendly to us) can produce enough to affect the margin, the price will come down.
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