Lesismore46

Oil Price Decline Bad News for Future Supplies

With the stimulus packages, the interest rate cuts, the bailout of financial institutions, and extension of tax cuts, I estimate that the recession will be short lived and not as deep as expected. However I agree that as energy companies postponed expensive projects, shut down production, and lay-off the experienced human capital, the country will be in for a new oil shock in the near future. Like a diet, conservation does help in the short term, but eventually consumers appetite return to previous levels. With renewable energy sources virtually abandoned, we will not see $40 oil, but $100 is possible in 2009.

Want Lower Gas Prices? OK, Let's Increase Supply

Individuals and businesses are unwilling to make the tough decisions to cut consumption (i.e. 3 day-14 hour fluctuating work weeks, telecommuting, on-premises boarding), Congress is unwilling to open "environmentally (i.e. screw the consumer instead) sensitive" exploration areas, Congress is also cutting funding on nuclear plant development and waste disposal, and we have been waiting since I first started working in the okie oil patch at NIPER for private industry (it is attractive but make sure you meet earnings expectations for shareholders!) to find an alternative energy solution. Mr Dill is right, only a supply shock will awaken the American economy to pursue a painful but long term solution.