Once gas prices hit $4 here (they are already $5 in Washington, D.C.) you need to make a permanent adjustment to your budget to make room for a larger energy bill. Gas prices may stagger back down the way they did last year, but not for long, and if you look at the historic trends in oil discoveries and oil production on the chart, you will note that the era of cheap gasoline is about over.
There is no longer a magic wand to keep gas prices down — not even Obama.
Yes, oil shale is on the horizon, and we are getting oil imports from the Tar Sands of Canada, but together they may make up 10 percent of our annual need. Neither source will be significant providers in the future. Also, there is little slack in the line between supply and demand, and intelligent sources say that most Middle Eastern countries are investing billions just to tread water (make that tread oil). New discoveries off Brazil will go for domestic purposes, and OPEC countries are beginning to look at keeping the homefront happy by reserving more and exporting less. For the latest news on oil and gas, please don't look at congressional hype — tune in to the Oil Drum.com on the Internet, which is a forum of intelligent and interested geologists, physicists and economists.
David M. Delo
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