happycajun

Rising Oil Prices: What We Have to Do ASAP

The real issue regarding energy cost is stability. For the longer term, yes - we will need to come up with a replacement for oil and gas - but it won't be overnight, and the "how" is still being worked out by the markets. Oil shot up - some blame "speculators" which I don't really understand because ANY investment is speculative. The base premise of portfolio management is that the future is uncertain - making investment risky - the trick is to determine the degree of risk and to place your bets so that your exposure is understood and fits your risk tolerance.

If Oil at $147/bbl was "too high," then it seems that Oil at $30/bbl was perhaps "too low." As with most things, when a stable trajectory is disturbed, there is an overshoot/hunting response to the disturbance, with a new stable "steady state" being the result. The new stable basis gets priced into the economy. Oversimplified, but basically how dynamic systems respond to impulses. Now, for your recommendations:

Beg OPEC - What? This is a real winner! Beg for what? Stability? Low Prices? High Prices? Alternative Energy Technologies? The only common ground here that makes any sense is "Stability" - OPEC wants it (or at least Ali Naimi/Saudi wants it), but at what level? $70-$80 is the stated happy equilibrium.

Use the SPR - This option makes a little sense when the price is at extreme levels (produce from when price swings too high, add too when price is too low), but not when the price is seeking some intermediate ground. the SPR is NOT a permanent, limitless supply.

Expand Transit system service IMMEDIATELY? How? the problem in most cases is that people don't use it! With gasoline/petrol at relatively low prices, this won't get people on the tube.

Expand Bus service? see above. Have you been to a bus station lately? Unless you are a police officer I doubt it! There is no quick way to make this ANY more attractive (less unattractive?) than it is.

Increase Gas Tax? I thought you said the price was TOO HIGH! Good move, let's MAKE IT HIGHER!

Encourage some sort of "commute efficient" practice by employers - this was done to VERY limited effect back in the '70's energy crunch, and it can have some impact, but not permanent, and I don't understand what "salary subsidy" for the workers results in any incentive for the EMPLOYER to change work days?

"Should have been preparing for this" - well, can't fault you there. I said this THIRTY years ago. All that's changed is the clowns in charge, the circus is the same.