$100 Oil is a good thing?

No….it is not a good thing! I am at my wit’s end reading all these news stories about now $100 oil will start us all on the path to conservation. If gasoline costs more, then, in theory, most people will use less of it and pollute our earth less.

POPPYCOCK!

Now, let’s examine what $100 really does!

1. The poor and lower income families in the US can’t afford newer, more fuel efficient cars. This means these folks are stuck with their late model gas guzzlers. You can’t preach mass transit to many of these folks as they live off of bus routes and commute long distances to work. Move closer to the city or mass transit routes, you say? Housing it too expensive. Net Result: The poor have less money for important bills.

2. The upper middle class will conserve gasoline. NOT. They have moved out to suburbs and have wicked long commutes. Instead of moving to the mass transit hassle, they will just cut down on spending on things such as going out to eat or buying things that they dont really need. Net Result: Less money injected into the service economy and less money injected into retail outlets. Feeling the burn yet economy?

3. Heating oil prices skyrocket! Shall we tell those folks up north to turn off their heaters? How about upgrade to natural gas? Oh wait, natural gas prices are high too. How about turning to electric heat? Oh wait, powered by fossil fuels. Net Result: Families have to pay more for heat which means less money saved or spent. Ouch the economy starts to slow.

4. Those uncaring truck drivers who have to raise prices to cover fuel costs. Oh wait, they need profit to make a living and pay their own bills at home. Net Result: Higher transportation costs for goods. Higher cost for goods because they have to be transported. Inflation. Wicked cycle begins. Inflation, followed by slowed spending, followed by higher interest rates, followed by less borrowing, followed by less spending, followed by recession.

5. Oil companies make record profits. Well, they were until traders started trading up oil prices. Now it’s the traders making profit. Oil companies already own the rights to resources, delivery methods to refineries, the refineries themselves, delivery methods to the stations and royalties from stations they don’t already own. Standard Oil Trust anyone? Right now, the oil companies aren’t the bad guys but they were and will be again. About those traders… They are willing to tank the entire world economy for their profit. Net Result: Worldwide recession. Higher government taxes on oil profits. Lower profit per share on oil stocks. Stock markets drop further. Worldwide depression.

6. Politician come up with lame answers.

6a. You will have some that will push for more ethanol. Net Result: Currently it takes more fossil fuel to create ethanol than it replaces. Food stocks will start to run low until cellular ethanol technologies are perfected in the next 10-20 years. Higher prices for food. Worldwide hunger increases.

6b. Some will try to tack a windfall on oil companies. Net Result: Either lower per share profits and harm to a great number of portfolios (retirement funds, pensions, 401Ks, small investors, large investors, government funds etc.) or oil companies will pass the expense along to the consumer, raising prices further. Worldwide recession or depression.

6c. Some will pump more money into future technologies that lower fuel consumption. Net Result: lower consumption in 20+ years. No solution to the current problem.

Overall, you can see where all of this is going. Short-sighted traders are going to tank the world economy and there will be no way out. The US dollar is at historic lows. Oil is at historic highs. If China decides to dump it’s reserve of US dollars, then the US dollar will be as worthless as the old peso was in Mexico.

So…what do we do?

A. Encourage immediate exploration on US soil for fossil fuels. Do it now! We need to be less dependent on foriegn oil.

B. Break up the oil company trusts. Oil companies should not be allowed to hold all of the following: mineral rights and deposits, transport, refineries, and stations. There is no incentive for oil companies to build more refineries if they get more money out of less. If oil companies were made to sell their refineries off, there would be competition among refineries. Competition is the only way prices will remain in check.

C. Quit deluting gas with ethanol. Ethanol takes more fossil fuels currently than it replaces. When cellular ethanol technologies are perfected, perhaps we can reexamine the issue. Right now, ethanol is costing us more money than it’s worth. The reason politicians love it is because it raises the prices farmers can get. With apologies to the farmers, it’s not right to steal and ethanol is theft on a global scale.