Tuesday, November 13, 2007

A Crude Awakening Oil is expensive.

The price of gasoline has gone up over the weekend and is expected to go a even higher, even though the price per barrel dropped today. My quest to get to the truth about our local oil shock always drives me to research and find answers.

This drive of mine increased when my local gas station at the corner of High St, and the Post Rd. dropped his franchise and became an independent operator. His gas station is now called "USA Fuel" and shortly up the Post Rd. there is yet another patriotic gas station called "Patriot" fuel.

The frenzy to compete on gasoline is causing these gas stations to dump their franchisers with the result of lowering the price per gallon. My first impression was that these gas stations are making a lot of money with the high price of gas, but in reality the price hurts the local station because it reduces demand for the gasoline and most franchises only pay the stations for a fixed profit per gallon.

Wanting to know more I went to the Post mall and bought a documentary called "A Crude Awakening." This was the best thing I ever did in truly understanding the energy and oil situation not only here in Milford but in all of America.

The overall message of the movie is that Americans believed our oil would never run out, that it would be here forever. This is proving to be the biggest mis-perception of the century. Every nation on earth is now copying the great consumptive life we have built for ourselves in America. China, India, and Europe all aspiring for individual ownership of a car, a home, and the countless cheap plastic products we have come to enjoy so much.

There is only one problem, and that is that our oil reserves cannot reasonably sustain the good life we have in America spanned across the globe. The worlds new found thirst for oil is causing all the major oil regions of the earth to peak pressuring more outrageous political pressures and competition for oil.

Every industrial government wants to fuel their energy needs, but the supply of oil is not capable of sustaining the rate of growth that the world economy demands. Oil dubbed as the black devil has been the subject of wars, including most recently the gulf war and Iraq's invasion of Kuwait. According to the "A Crude Awakening" documentary the only place left on earth that has not peaked in its oil production is the "war torn" Middle East.

America has no energy plan should our energy demands begin to wane below our needs. The consequences of not having a cheap source of energy are unthinkable, and too upsetting to even think about. Richard Branson of the Virgin Industries has called this problem "serious" and invested several billions of his own money to start "Virgin Fuel" of which I personally hope he succeeds.

The very embarrassment of the energy crisis has led to our political leaders not being honest, just reassuring the public that everything is under control while they know otherwise. This dire energy situation coupled with politics is akin to you or me making up a lame excuse for why our failure to afford our electric bill resulted in the lights going off. Even though America has not had its lights shut off, it has been served with a "shutoff notice." Unfortunately the 9 Trillion charged to the national credit card is now "maxed out."

Politicians cannot and do not want to campaign with bad news. The people of America are perpetually hopeful that America will remain the greatest nation on earth forever and are diseased with "selective reception" and "selective perception" and as such only lying politicians are getting elected. The sooner America wakes up the sooner we can soften what otherwise may be an abrupt crash caused by global energy competition. One last point to note is that, despite this documentary, the CEO of Exxon Mobil is of the opinion that we have plenty of supply to meet future deamand.

CNBC Video:

Who is telling the truth?

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