It seems that oil prices are at historic lows. OPEC is dumping their product on the market while fracking is increasing supply in the US, while the growth in China’s demand for oil is falling short of expectations.
There are lots of theories about why OPEC is continuing to pump oil into such a shitty market, but in the end their motivations don’t matter. Oil is cheap right now.
So let’s burn theirs! Let’s sit on our own reserves until the price goes up. The oil under American soil will be worth a lot more later than it is now. A lot more. The US trade deficit is largely about energy, but if you can balance that with an increase in the value of our assets, it’s not such a big deal.
Better, let’s use their cheap oil to produce a crap-ton of photovoltaic cells, and invest in other energy-up-front technologies.
However you figure it, you buy low and sell high if you want to succeed. Right now OPEC is selling low. I’m OK with that. I’d hold off on the domestic fracking; we can destroy our land later if it proves necessary. It will sure be a lot more profitable later.
Very simply, we lack the collective will. There are lots of things we should do, during this brief interlude of cheap oil and gasoline. The result of any appropriate response would be higher gas prices in the US. We could cut domestic production and hoard our oil reserves. We could crank up our national and state gasoline taxes. We could aggressively tax carbon emissions.
But we won’t. Compact car sales are tanking in the US, and automakers are selling so many larger, thirstier cars and trucks that they some may struggle or fail to make the mandated Corporate Average Fuel Economy standards this year. Automakers will ramp up production of gas-guzzlers, fines be damned. And then gas prices will shoot back up (whether or not crude oil prices do, as the price of gasoline in the US is much more dependent on refinery output than the price of crude oil) and the auto manufacturers will be saddled with unsellable inventory, just like in 2008.
I have pondered whether one leg of the current cheap-oil wave is simply to get Americans to buy another generation of gas-guzzlers. I haven’t seen that theory in the jingo-paranoid forums where energy policy is calmly discussed; word on the street is that OPEC is trying to put the frackers out of business.
Holy shit, I’m rooting fro OPEC.
But ultimately ‘Let’s burn theirs’ is a marketable idea, I think. It’s a campaign that tells people how smart they are by agreeing.