chet esium

Why We Continue to Expect Exorbitant Oil Prices

Corn isn't used to feed people. It's used to feed livestock. And at the levels of production forseeable over the next few years, are fairly irrelevant to global food production. Also, if you are going to argue that we can't grow ethanol because its socially and environmentally unsound, you have to argue that we can't burn oil because it is socially and environmentally unsound.

Your comments on alternative solar energy are completely unrelated. Oil is rarely used to produce electricity, and electricity is rarely used to transport goods.

It's not just that crude oil inventories in the U.S. are relatively high, gasoline/diesel/propan... inventories are also high.

High oil prices are simply not sustainable for more than a couple of years. Current prices have greatly reduced demand. The world economy is growing rapidly and oil is growing slowly, and over the past couple of years the energy intensity of world GDP has improved. Current prices have rapidly stimulated increased production. Oil prices can't continue at well over $40/barrel because that simply stimulates the more rapid growth of ethanol, oil sands, deep water production, improved fuel economy, better alignment of refinery demand with type of oil being produced, and natural gas substitution.

It's not like there's only one possible alternative that can be used to counter high priced oil. There is a large array of possibilities each of which only has to be slightly effective in order to bring oils prices back down to the, still high, $40/barrel range.

OPEC experimented with high oil prices during the early 80's. And they paid for that experiment for the next 20 years. The effect of their high oil prices was improved western technology and reduced western oil consumption. OPEC won't use the same experiment again. They'll shoot for keeping prices higher than they've been for the last 20 years, but not high enought to push the rest of the world into drastically reducing oil consumption and drastically improving their transportation fuel technology.