Wednesday, March 4, 2009
Oil? What Oil? Crisis? What Crisis? How about a NEW GAME?
It's a game of supply and demand. And sometimes, like when playing poker, you have to know when to hold them and know when to fold them. (Or pack up your game, and just go home; or create a new game with new rules!) Depending on who you talk to, we're facing an oil crisis. Or, maybe we aren't. We're facing an environmental crisis. Maybe we aren't. Go figure. Maybe we should ignore all the idiot economists and news media out there (because all we get are conflicting reports) and just happily move on and tinker with our own ways to beat the power grid and gain independence from oil companies, power companies, and so on. A few photovoltaic panels on the roof, a solar water heater, a solar air heater, a plug-in hybrid electric vehicle that uses vegetable oil for the non-electric need for locomotion... and *voila!*... no need for the oil company or the power company.
Okay, last year we were watching the price per barrel of oil heading past $140. And gas prices at the pump in the U.S. were reaching almost $5 per gallon.
Folks were bailing out of their Ford Excursions and Expeditions, their Chevy Suburbans, their Yukons, their Hummers, and all the other gas-hog vehicles and were running to Toyota, Honda, Nissan, and Hyundai (to name a few)--folks who still seemed to know how to make more efficient and energy-conserving vehicles.
The hybrid-electric-vehicles (HEV) and even more energy-effective plug-in-hybrid-electric-vehicles (PHEV) were getting rave reviews and more demand than ever. There were waiting lists at all the dealerships to get these cars.
Although folks were backing away from doing much unnecessary driving and thus not buying as much of the $5/gallon fuel, oil companies posted their highest profits for the quarters of 2007-2008. They were making gravy!
In the meantime, the big car companies (Ford, GM, Chrysler) were taking the hits. They didn't see the writing on the wall. They were (and still are) losing billions of dollars.
What's funny is that in 1980, I took some classes on alternate energy and energy conservation at the University of Guam and the University of Hawaii... and they were preaching that we would run out of oil totally by the year 2000. After the scares of the oil crisis in 1973-1974... when OPEC started to get squirrely, the "oil crisis" and "energy conservation" was still clear on our minds. We knew we were dependent on oil (in more ways than one). And for Guam and Hawaii, any oil for fuel or otherwise had to be shipped in. It wasn't as if we had our own sources. We did, however, have abundant Solar Energy and other renewable and alternate energy sources. And that's the point.
I bought a used Datsun 1200 sedan for that reason. Yeah, I could have gone for a used Ford LTD or a Mustang Mach II or an Olds GTO... but, hey, I lived on Guam... and the Japanese cars didn't seem to rust out as much as the U.S. cars did. And also, it wasn't like I was going to do any major highway driving. That Datsun (now Nissan) got up to 48 miles per gallon... great for a college kid on a limited budget.
So, I saw in today's news that there are more than 30 tankers -- each with the capacity of 2 million barrels of oil sitting anchored offshore around the world. They are "floating storage tanks" and they are sitting idle... waiting for the prices of oil to go up. Storage farms in the U.S. are at capacity. Refineries have cut back on production. Because the demand disappeared. The recession wiped out jobs. Without jobs, folks don't need to drive very much. Thus, less demand on oil.
Prices of oil plummeted from about $5 a gallon back in August 2008 to about $1.65 a gallon by October/November 2008. (Didn't matter to me... because I got laid off in September Sigh). Now the oil prices have edged back up to about $2.20 a gallon (These are all Northern California prices... your "milage may vary" depending on your location).
But the price per barrel of oil still remains at about $40, far down from its price of over $140 back in August. At the time, traders were counting on the price-per-barrel to exceed $200. Well... like I said at the beginning. The utilities market and the commodities markets are like a poker game. Sometimes ya win, sometimes ya lose. Or, sometimes, you create a new game and change the rules.
That's what we must do. We must, as individuals, create our own NEW GAME! Keep on tinkering with our home-made "franken-sources" for energy. Our home-built solar panels, home-built solar water heaters, home-built solar air heaters, solar greenhouses, better insulation, better weather-stripping, better driving habits, better and wiser purchases for home use. We can not only change the rules of the game, but create a new game. And not become dependent on the knuckleheads that have huge, heavily ladden oil tankers sitting idle off our coasts waiting for the price to rise so they can gouge us again.
Have we learned any lessons yet?