Today while watching a CNBC business morning show I was struck by the duality we are all forced into by these oil and gas prices.
Ideally we all, even the greenest of the greens, would probably prefer a price per barrel of $25 which would perhaps equal a per gallon price of around a $1. We could all go about our business and transportation costs and consumer products derived from oil would be very affordable.
But such is more for the 1950's and 60's and will never happen again.
So we are all in a position where we know that the more gas costs the more the "screw it-I'm curbing my use" threshold is reached and we all use less which puts pressure on the price to drop a bit but also makes alternatives, which we need badly, more of an option but our pocketbooks, pride, and outlook are all depressed by the higher price still. It's all a big stew that gets stirred and never settles.
Getting back to CNBC, they had a gent from some Oil and Gas Lobbying firm on an interview and he is speaking of prices firming up(which he means rising astronomically) when the economy turns up and he almost seems to be hoping this happens sooner than later I guess justifying the much higher(than now at least)oil pricing as just a "price of progress."
Of course poor China and India are always blamed for the increases even though I believe western Europe and the Americas still far outweigh the consumption of China and India.
Now I read in the Wall St Journal yesterday of how the bio diesel and ethanol fuels demand is way down since their main use was as a blend and since gas use is down, they too are affected.
Is your head spinning like mine yet?
But all is not lost I feel. Seems like we ARE taking baby steps that will help.
Since we saw last summer that a price at the pump of $4 caused total outrage(and perhaps put us over the edge toward severe recession)the powers at be in the oil and gas industry must realize that they should try to stay away from that level if at all possible if they do not want a W style recession that will hurt them again as this one has.
Also with the new Presidential administration in there seems to be a bit less of a Texas-o-centric(apologies to our Great Texas customers who we badly need)approach to energy and more of the approach of what will help all 50 states.
The cash for clunkers may be viewed as a fiasco by some but it did up the mpg of the cars purchased by as much as 10mpg in some instances which taken collectively is positive.
Hybrids seem less like Martian vehicles on the road now and are widely accepted as a way to drive by all.
These are still baby steps and I feel we need T Rex steps.
Let's hope as we all tire of the duality that oil and gas forces us into we will collectively turn slowly to a life of alternatives at least alternative from oil and gas.
PM for the Conserv-A-Store