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Old 04-20-2007, 10:09 AM
 
8,317 posts, read 25,865,640 times
Reputation: 9139

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An article in the April 18th Rocky Mountain News about summer fuel prices ought to send chills down the spines of Colorado's totally auto-dependent suburbs and resort areas.

The article starts out with this "catchy" headline:

"Gasoline could hit $3 this summer"

Kind of ho-hum, especially since gas ALREADY is $3.00/gal. in some locales. What followed was a discussion from Guy Caruso, energy information administrator for the federal government's Energy Information Administration, who was speaking in Denver.

Again, quoting from the article:
"Caruso said the EIA - the statistical arm of the Energy Department - expects average gasoline prices of $2.81 a gallon this summer, 3 cents lower than the average $2.84 last summer. The agency's forecast assumes that imports of gasoline this summer will be adequate and weather and global politics stable, he said."

So, everything ought to be hunky-dory, right? Well, read that last sentence. Prices of around $3.00/gal.--painful for a lot of people and businesses are predicted ONLY if:

-Imports of gasoline are "adequate."
-There are no significant weather disruptions.
-Global politics are stable.

The EIA spokesman also mentioned that refineries would HAVE to operate at 94% capacity to avoid shortages and price increases. That alone should be troubling, since around 95% is considered absolute flat-out production, according to the oil people that I know.

Imports of gasoline are probably not adequate right now, given the massive drawdown of gasoline inventories over last year, a fact that this article openly acknowledges.

No weather disruptions? We lucked out last year, but 2005 was a doozy.

Global politics are stable? How stable can it be when the U.S. gets 70% or so of its petroleum from overseas, much of it from countries that either hate us outright, or have citizens who openly profess their desire to kill us?

Maybe everything will turn out OK, and we'll have to pay ONLY $3.00/gal. for fuel. But if everything is not OK, the West's economy, and that of the whole country, could get a very rude reminder about how fragile our overinflated, debt-ridden, import-happy, and hopelessly petroluem-dependent "humpty-dumpty" economy really is.

Going back to the EIA spokeman's assumptions, I would like to draw this analogy. By the way, the EIA itself likes to use "sports" analogies in its weekly petroleum report, so I will use one here:

I predict that there will be no major league baseball games cancelled or "called" this year because of inclement weather. Of course, this is based on my assumption that it will rain nowhere in the continental United States between now and the end of the baseball season. I believe this "assumption" is probably as valid as EIA's are about the fuel situation.
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Old 04-26-2007, 02:01 PM
 
Location: Sarasota, Florida
5 posts, read 12,752 times
Reputation: 17
Good point, but try living in any other part of the globe where gas prices are 3x and 4x more than ours. Having been there myself and having dumped more than 50eu on a partial tank of gas in an extraordinarily fuel efficient car, when I got back home to the States, I didn't complain quite so much. And... to top it off, it isn't only the oil producing countries that hate us anymore... It's a bad time to travel abroad if you're an American. Thanks for the post.
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Old 04-26-2007, 08:58 PM
 
8,317 posts, read 25,865,640 times
Reputation: 9139
Brucimus,

Fuel definitely is much more expensive in other countries than the U.S. Unfortunately, the U.S. is completely addicted to fuel that is BOTH plentiful and cheap. Worse yet, our totally automobile-centric living structure is also dependent on that cheap fuel. When the cheap fuel is gone (and all evidence indicates that we are at the end of cheap oil), we will not be able to sustain our living arrangement as it now exists. Since so much of our national "wealth" is tied up in real estate dependent on what will be an increasingly expensive and unsustainable transportation infrastructure, not only will our transportation costs wildly inflate (along with everything that depends on that infrastructure), Americans will probably have to endure a massive DEFLATION of their wealth caused by a collapsing real estate market. I hope the country can survive that "double-whammy."

And making ethanol out of corn cobs and diesel out of french-fry oil won't solve it. Only a complete rethink and redesign of our "living arrangement" will begin to solve the problem. Unfortunately, no politician who wants to keep his or her job dares suggest that to our gasoline-drugged, suburban-brainwashed, comatose public. They don't want to hear it.
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