Recycled News about High Gas Prices

I saw this weekend where prices for regular unleaded gasoline were $2.95 a gallon. As the price inches up towards $3.00 again, and for many parts of the country is already well over $3.00, I thought it might be a good time to ponder the issue of oil prices and the supply of oil, currently and in the future. I will save the topics of fuel efficiency in vehicles and the global warming debate for future postings.

In the last couple of years we've topped the $3.00 a gallon point a few times. During these times people drive less, carpool more and buy more fuel efficient vehicles. These peaks are usually reached during the heavy driving seasons of late Spring through early Fall. Throughout the Summer you will see stories all over about the following topics: how the Big Oil companies are screwing the American people, how SUV sales are down and Hybrid sales are up, how no refineries have been built in 30 years etc. etc…

Then come Fall the price of gasoline will fall back under $2.50 a gallon or so and its like there was never even a problem. Hybrid sales will be back on the decline and people will talk about how it was just an aberration.

Experts disagree on whether we've reached the peak production point yet or how long it will take before we start running out of oil. But here is something that is indisputable. The major sources of oil currently in the world are located in places like the Middle East, parts of Africa, Russia and South America, all of which are unstable. There is little oil located in Asia or Europe, where many stable allies are located. There are oil deposits in North America, but the political climate makes it very difficult to quickly increase production. With most of the world's supply of oil coming from politically unstable regions, many of which have a deep hatred of the major industrialized nations, all it takes is for one natural disaster, terrorist attack or even war to cut supply and dramatically alter the supply/demand equation for oil in the world. Throw in a growing China, with a growing thirst for oil, and you have the makings of an impending disaster. It may not happen today or this month or even this decade, but very soon something will happen and we will be wishing for the good old days of $3.00 gasoline. We saw a brief glimpse of this when Hurricane Katrina hit Louisiana and Mississippi a few years ago. Prices jumped within a week to well over $3.30 a gallon. Anything more severe and its only a matter of time before we hit $4.00. Can the world economy, and our own society, survive? I hope we don't have to find out anytime soon.