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No End In Sight For Pricey Gas

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By JOHN HERBERT

From Where I Sit

Published: May 31, 2008

It pains me to see the most powerful man in the world, the U.S. president, humbly down on bended knee, with hat it hand, begging the towel-headed king of super-rich Saudi Arabia for more oil. Call them gas pains, I guess.

Whatever they are, the price of a barrel of oil will hit $300 by the end of the year. You don't have to be a rocket scientist to see it coming. A decade ago, that price per barrel was less than $10. No amount of fuel conservation is likely to affect the current average of around $4 a gallon of gas at the pump.

A bit of history: Two years ago, I wrote a column projecting the price of oil at $60 a barrel by the end of 2006. I was way too guarded.

The price has more than doubled during the last two years. I noted at the time that there were 20 cars per 1,000 Chinese, and almost one for everyone in the U.S. Chinese car ownership was — and still is — growing at a double-digit annual rate. Some 70 percent of the whole world's oil production, in fact, is used to gas up the family car — and Wal-Mart's 18 wheelers.

The Yankee dollar is weak; it's lost about a third of its value in recent years. That's one reason the price of oil is hitting new all-time highs almost daily. As yet, there is no conspicuous reduction in demand; it's not only our problem; even if America would cut its energy needs, expanding Asian economies keep the pressure on.

Europeans who visit us (the weak dollar has at least been a boon to international tourism) think they'd died and gone to gasoline heaven. They wonder why we're crying over spilled oil. They've been paying $8 to $9 a gallon for their heavily-taxed gas for years.

The private car hasn't been as essential to the European lifestyle as it is in everyday America. Largely, the Europeans have extensive public transportation systems that work, and are actually used, frequently.

Speculation by oil traders is also boosting the price at the pump. Wall Street traders are already buying oil futures (oil for 2016 delivery) at $140 a barrel. These are the guys who collect multi-million-dollar bonuses for betting right. They will look like geniuses when oil nears $1,000 a barrel in 2016.

You can't really blame the Saudis, or other major oil producing nations, either. As one Saudi higher-up told Bush's Administration, "If you want more oil, you're going to have to buy it." That remark would confirm there is lots more oil to be had in the world — if the price is right. It also tells me the Saudis will be laughing all the way to the bank for years to come.

It's ironic, of course, that just when the Saudis are refusing us more oil at the very same time Americans are helping them acquire the know-how for civilian nuclear plants to cover their own energy needs. Sounds like someone's been asleep at the foreign trade policy switch in Washington.

Washington has also agreed to sell the Saudis$20 billion worth of advanced weaponry. Where's the quid-pro-quo? Congress has started asking the same question, at last.

It's high time we clamped down on those excessively powerful environmentalists who are clouding the policy-setting judgment of our all-too politically correct members of Congress. There may be no quick fixes to our energy problems, but Washington doesn't have to let tree-huggers rule.

Fortunately, we're in an election year. Here's a laundry list of all the things we can do to bring energy supplies and pricing under control, if we elect congress people with backbone.

Open up the vast oil reserves of Alaska's North Slope for more oil drilling. There's no point to the feds tying up 40 percent of its lands by blocking oil exploration. Unplug Florida's Gulf Coast, the entire East Coast of the U.S. and the coast of California, too.

It might take five to 10 years to get all these new sources of domestic oil flowing to consumers. But the mere go-ahead would rein in speculative pricing.

We should also encourage members of Congress to consider legal action to break up OPEC, the organization of petroleum-producing countries, that pretty much controls fuel pricing and 40 percent of the world's crude oil supplies. OPEC is a cartel that's supposed to be illegal in the U.S.

The leaders of Big Oil have been called to testify before Congress. The results have been only window dressing. Mandate that Big Oil demonstrate corporate responsibility by building more refinery capacity. Big Oil claims its profit is only four cents per gallon. That's hard to stomach when Exxon must have been embarrassed announcing a $40 billion net profit for last year.

Go nuclear for more than a fraction of our domestic energy needs. Even the French, better known for their wine and cheese production — already power most of their country with nuclear energy. With nary a sniffle from the purple herb fields of Provence!

Start car-pooling and ditch that gas-guzzling SUV. The time may be ripe for Hernando County to redirect some of its surplus bus capacity to express commuter routes Brooksville-Tampa and Spring Hill-St. Petersburg.

A regular columnist for Hernando Today, John Herbert lives in Spring Hill.

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