Joe Gilbertson | Jun 19, 2022 | 10
Oil prices are fundamental
Based on the reporting, there is a lot of interest in oil prices – as there should be.
Oil is at the foundation of the American economy – actually, the world economy. Like it or not, the modern civilized world runs on oil – and that is not likely to change for a looong time. President Biden and his anti-oil supporters on the left are pushing a vision of America that will soon end the use of oil as a primary – or even a significant –source of energy.
If you believe that America — and the world – can one day be totally free of the need for oil it will not be in the near future. It will not be in 2035 or 2050 – and not even in the Twenty-First Century.
Let me be very clear. I do believe that we do need to shift from oil to other energy sources for a lot of good reasons – not the least of which is that we are using fossil fuel to an eventual point of depletion. To the extent that we can introduce – over time – efficient and dependable alternative energy sources, we should do so. It could be wind or solar – although they are not nearly developed to the stage of replacing oil. Widespread use today would drive consumer costs for energy through the roof. It could recommit to building more nuclear energy plants – which is the best alternative to oil. But that runs into a lot of political opposition and concerns over atomic waste.
Science is currently working on dynamic potential energy sources that could develop to become the alternative to the current alternative sources. There is an enormous number of exotic energy sources in the world, but we are still on the drawing board in terms of efficiently and safe access to them.
The reasons oil production and pricing are so important is because EVERYTHING we do depends on oil. If the use of oil were to end today, the world would be pushed back to the Neanderthal period. Name anything you have … anything you want … anything you wish to do … and it will go back to the use of oil and oil derivatives.
Some folks take pride over “being off the grid.” In the extreme, they claim to be “energy independent.” That is not true if they like to eat and buy things – virtually anything.
We pay attention to the pump price for gasoline because it stares in our face. We see it every time we “fill ‘er up.” I am up approximately $7 per tank full since the recent inflationary increases.
But gasoline is not the only impact oil has on our budgets. Think about all those trucks delivering the goods to every store – or directly to our home. They arrive by boat, plane, train and truck – all of which travel on oil. When that price per barrel increases, the cost flows through the entire commercial market like a gusher.
It is not only goods, but also services. When you pay your doctors, you are paying the impact oil has on their rent, utilities and the cost of all those wonderful medical supplies and very expensive diagnostic machines.
Of course, when we consider oil – or wind, solar or nuclear – we are looking at sources to supply … electricity. That is the energy we observe most in our daily lives. It seems to power damn near everything. But it is oil that is the primary producer of electricity.
There is a lot of movement toward electric cars, but to have an adequate source of energy to produce them, we need massive amounts of fossil fuel – and we will for the foreseeable future.
While the world runs on oil, it is also a commodity that has great competition in the global marketplace. So, when we consider the reliance on oil energy, we must consider the situation in America. We need to protect our national interests in the Great Oil War – figuratively speaking.
Approximately one year ago, the United States was oil independent. We were such a significant producer that we were actually an oil exporting nation. Thanks to the Biden administration’s so-called green energy policy, we are no long independent – and longer exporting.
Biden has put America in the unfortunate position of having to buy oil on the international market – and beg other nations – friendly and some adversarial, such as Russia, China, Venezuela and the international oil cabal, OPEC – to increase production to stave off the Biden-launched inflation. The reason we are going hat-in-hand to the world oil producers is because Biden has declared a war on American oil – reducing supply and creating uncertainty that disrupts future planning.
Biden policy has also diminished America’s international leverage. The White House has given the Russia/German pipeline a seal of approval – greatly helping the Russian economy. We lost the opportunity to use American oil resources to sell to Germany as an alternative to Putin’s Pipeline.
While it is not the only thing, oil prices are fueling the inflation. The reduction in oil supply has been met with increasing demand. That is why Biden is operating from a position of weakness – his own self-inflicted weakness.
Ironically, Biden & Co. may have engineered their own downfall. There is less than one year before the 2022 midterm elections. Biden’s foreign diplomacy failures – Afghanistan, China, Russia, Iran, North Korea, Venezuela – are not likely to reverse or even improve in 11 months. In fact, we are more likely than not to see Russian and Chinese aggressiveness increase.
The Covid may slowly dissipate, but it is not likely that all the fearmongering policies will be gone.
And in terms of the economy, I believe inflation will be a problem.
The only chance Democrats have in 2022 – and it requires desperate tactics – is to engage in meaningless symbolic action … blame the failures on “messaging” … and try to convince the American public that every Republican is evil in every regard – and poses a threat to the future of the Republic. That is a lot of bull stuff for we the people to swallow, however.
And in the final analysis, it may be oil that lubricates the political slippery slope upon which Biden has trodded.
So, there ‘tis.