Come on already… what’s up with oil?
First: It is my considered opinion that we should get the heck off dependence on oil.
Yes… I know… massive disruption and hard to change something so core to our way of being. We’ve lived through it before. Heck, we’re going through it right now with the economy changing, outsourcing happening on a massive scale, and a retooling of our workforce. If we went full force in the pursuit of alternative fuels we’d be able to accomplish a few things at once:
- free ourselves from an addiction we can’t meet on our own
- the addiction is to a constrained source… the more constrained the more the cost
- any money we pay out for oil feeds a part of the world that simply hates us
I read an interesting article by Thomas L Friedman with his hopes for the President’s State of the Union. If you subscribe to the NYT this link will be good for you.
It would be good if we started developing the technologies to rid us of this dependence on oil. Once again we could be leading the charge into the future which is exactly the kind of thing we’re supposed to be doing with our new knowledge-based economy.
Second: US oil companies have moved up on my list of evil entities. Congress stays about the same.
I can’t quite figure out what those companies or Congress are thinking. The companies can’t seem to explain in a logical way how they’re generating record profits. Sure, they say the same thing over and over and Congress seems to understand it but for a week mind like mine it doesn’t make any sense. They talk about how the market sets the prices and with rising costs from the producers their costs go up.
But here’s what I don’t get… if costs goes up but their profit per unit stays the same the it is logical to assume that the only way to get an increase in profits is to sell more units. But with gas approaching $3 / gallon and reports of how many Americans were having to choose between driving and eating… I’m thinking it couldn’t be an increasing of consumption. It has to be an increase in the profits taken on each gallon and for that someone has to call foul.
The oil companies have been systematically closing refineries in the US for the last few years to constrain processing ability and drive up prices. Katrina exacerbated the issue but they caused it.
This all happened right after Congress passed a massive set of credits and tax breaks for the major oil companies. Awesome. I love that Congress went back and proposed the companies should refund the credits following these historic profits.