Tuesday, November 13, 2012

US Oil Addiction: Deadly Denial

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The Global Futurist Blog is predicting that The US' addiction to oil is going to persist, and will probably increase during the next fifteen- to twenty-year time horizon. This is not for lack of interest in alternative forms of energy, or for any lack of existing (or currently developing) substitutes or supplements to oil - it will primarily be due to Big Oil's increasing aggressiveness in domestic oil extraction under the patriotic guise of "oil independence" from middle eastern sources of supply -- who are constantly blamed (scapegoating) for the high price and limited availability of oil and gasoline at the pump. This doesn't solve any real problem. The true source of supply and pricing problems is right here in the US.

The aggressive extraction and production of fossil fuels in the US will only slow down when either 1) there is no longer any petroleum to be extracted [i.e., that our geological reserves are completely exhausted] or 2) the US population actually reduces its demand for automobile travel, oil heat and other refinery products. Neither is likely within the next twenty years. By manipulating supply and periodically dropping prices (only to have them rise during various crises, and then to fall again to new "higher lows"), the domestic oil oligopoly will continue to keep the dependency on oil high.

In the shorter-term (during 2013 -2014), oil and petroleum prices are certain to drop; the oil producers do not want to kill off their addicts -- they merely want them hooked.  And to make the oil companies' strategy all the more effective, the addicts in this instance are in denial.

The article excerpt which follows is excellent evidence of what I've stated above. The piece should be read both on its face and "between the lines."

IEA: U.S. will be biggest oil producer by 2020
The U.S. will replace Saudi Arabia as the top oil producer by 2020, the International Energy Agency said in a report. Around 2030, the U.S. will become a net exporter of oil and by 2035, it will be almost entirely energy self-sufficient, the agency said. Los Angeles Times (tiered subscription model) (11/13), Houston Chronicle/Loren Steffy blog (11/12), Business Insider (11/12)

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Celebrating our oil independence from foreign sources is as ludicrous as throwing a party because we have found a more resourceful and industrious heroin supplier closer to our street in a better part of town. It is not something to celebrate about.

The US addiction to oil is not based upon where it comes from -- it is based upon the deeply ingrained consumer philosophy that "cheaper gasoline" is a good thing. The good thing would be a change in the dynamic among automakers, the oil companies and the consumers whereby the consumers would demand an alternative to gasoline instead of topping off the tank whenever the price is a bit lower and the supply appears plentiful.

This will slow down the development, proliferation and acceptance of alternative energy sources and technologies because it will cause an already oil-addicted nation to abandon its recovery attempts and simultaneously drive them (no pun intended) into perpetuating an already dangerous dependency upon oil and to a loss of inspired focus on finding a means of breaking free of the stranglehold that the oil companies have on consumers.

The principal enemy is consumer demand and an incredibly short public memory.

Alternative energy has been gaining a foothold in the US, and the parties involved in its production and acceptance (as an alternative to oil) will have to aggressively step up their marketing efforts and focus more on the threat level posed by the forecast increasing supply of oil.

I believe that the only good news here is that the US may 1) be able to accelerate an economic recovery by (at least temporarily) reducing the price of oil and the oil-related costs which impact the market pricing of so many goods, and 2) be able to export oil to other nations and thereby reduce of growing trade and budget deficits to the benefit of the US' sovereign debt standing.

And yes, oil prices will drop in 2013 for all of the eager US consumers.

Thank you as always for reading me




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