Posted on 01/13/2011 11:48:03 AM PST by bananaman22
According to a loosely-organized apocalyptic Christian movement, May 21, 2011 will be the "end of days." On or about that same date, the price of oil in the United States will begin to climb to $4 a gallon, according to two savants of the oil industry.
The former is highly unlikely but the latter is very probable.
The escalation in the price of oil is predicted by the legendary oil man T. Boone Pickens, known for his financial acuity as well as his oil expertise, and John Hofmeister, who retired as president of Shell Oil Company, to sound the alarm about the rate of U.S. consumption of oil.
In an interview with a trade publication, Hofmeister predicted that oil would rise to $4 a gallon this year and to $5 a gallon in the election year 2012. Separately, Pickens—who has been leaning on Congress to enact an energy policy that would switch large trucks and other commercial vehicles from imported oil to domestic natural gas—predicts that oil currently selling for just over $90 a barrel will go to $120 a barrel, with a concomitant price per gallon of $4 or more.
The Obama administration appears to have been slow to grasp the political implications of an escalation in the price of oil. When asked about it, outgoing White House Press Secretary Robert Gibbs referred the questioner to the Department of Energy.
Not everyone is alarmed by the incipient rise in the oil price. Republicans, who are especially close to the oil industry and its Washington lobby, orchestrated by the American Petroleum Institute, think that a great deal of hay can be made while this particular sun shines. They plan to attack the administration for spending too many resources on alternative fuels, over-regulating the industry, and keeping too many federal lands away from oil prospecting. They also accuse the administration of being too frugal with its release of drilling areas in the Gulf of Mexico and on the two coasts, as well as Alaska.
The Republicans have unlikely bedfellows in their quest to politicize the price of oil. They are joined by environmentalists who have long believed that only high prices will break America's passion for the automobile.
Environmentalists have long advocated European-style taxation to drive motorists out of their cars and onto buses and trains.
A third interest group that will take some pleasure in rising oil prices are those who are invested in alternatives such as ethanol, oil from algae and electric vehicles.
Meanwhile, the International Monetary Fund is keeping an eye on the price of oil, according to Caroline Atkinson, director of external relations at the IMF. She told a Washington press briefing that the IMF is particularly concerned with food and other commodities that are directly affected by the price of oil. Full article at: Oil and gas prices
It costs about $3000 on the east coast to replace a battery pack and $4000 or more on the west coast.
Oil is priced in and bought with dollars. The decline of the dollar will raise the price of oil all by itself. Increased demand will play a role certainly, but the falling dollar is having a big impact.
They are recyclable, just like the lead-acid batteries that come out of a regular car or truck.
The cuts Obama and the enviros want are not short term. They will endure, if they have their way.
...we have seen the number or drilling rigs greatly increase over the last year.
Domestically? Or do we continue to bleed money to nations hostile to our existence? And how much of the increase in the price of oil is linked to the devaluation of the dollar? Four dollar gas in 2007 was one thing...five dollar gas in 2011 will be crippling.
Christopher Walken
This is one reason why Obama goose is cooked and won’t be a 2 term President..I hope “goose is cooked” isn’t to vitriolic.
His only problem is that isn’t viable alternative to internal combustine engine.. I think that is what this moron forgot when wishing higher energy costs.
Yes, domestically.
In fact there are 500 more drilling rigs in operation today than there were a year ago in the United States.
Furthermore, there are more drilling rigs in operation today in the United States than there are in all other nations combined.
Yes, the decline in the dollar does have a great impact on the price of oil, but it does not account for increased demand and the increase in the number of drilling rigs in the United States.
To the degree that new potential oilfields are on lands that are controlled by BLM, or under sea in areas controlled by the government, inevitably the issue becomes political.
Oil companies are going to make their money one way or the other; they primarily work as contractors for government oil companies around the world. You can encourage drilling here and collect the royalties into the national treasury, and benefit from the production and construction and engineering jobs that result, or you can see the drilling and development shift away. The oil companies will make theirs either way.
The difference is, where do the royalties go, and whose people get hired.
I didn’t say it did. But you cannot divorce the price of oil and the value of the dollar, which is on its way to losing its status as the world’s reserve currency.
Is it possible to explain your math?
Not at all. It simply means that the supplies will be short and the value of the World Standard currency the U.S. Dollar is dropping like a rock. Demand has shifted to China, India and Pakistan which will also drive prices up here.
They will eventually drop the Dollar as the universal currency that the World bases Oil & Commodity prices on. There is already serious talk about this happening as soon as this year.
God help us if this happens. The price for the same commodities here in the U.S. would triple almost immediately, because we would be forced to buy the new currency with worthless Dollars first, before we could buy Oil or Commodities.
Simply printing more money to pay the debt will also no longer work. Geithner is playing Russian Roulette with 5 loaded chambers and only one empty!
Not probable.
The economy will collapse long before that happens.
The economy will falter at $4.00 a gallon or about $120 per bbl. Only hope and the fact that we have seen this before will sustain us at that point. it will not be so shocking as it was in 2008.
Between $140 and $150 or around $5.00 per gallon it will be summer of 2008 all over again. This will be a new shock.
My son and I took a motorcycle trip that July 4, 2008 and all I can say is that it was downright spooky. We went right through the heart of the Missouri and Arkansas Ozarks, right through the lakes where normally the roads would be packed and the lakes would be like jacuzzis. There was hardly a soul on the roads or the water.
Food is skyrocketing, oil going up due to a cutback in OPEC operations, speculation, and drilling halts (EPA, BLM, etc). Coal mines are being shut down. All at the green altar.
If you want coffee, etc, better stock up. Gonna get expensive.
Whenever the dollar drops, OPEC talks about dropping the dollar as the currency of payment. If they did not do so when the dollar was in worse shape than it is today, they are not going to drop the dollar now.
The Saudis control OPEC and the Saudis are not going to make a move that would devastate the US economy.
Because of Bush, Obama had to outlaw drilling.
Drilling activity in the US has increased dramatically over the last year and we are drilling more here than anyplace in the world.
That was the trigger last time we had $4.00 gas.
And we are very close to $4.00 again.
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