Friday, 23 October 2015 16:14

Petroleum and Prices

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Petroleum and Prices

Harry Neuwirth

Harry Neuwirth writes from Salem, OR.

Exxon and the petroleum industry had been feeling the heat as the price of gas at the pump last summer had gone over $3.00 per gallon. Little noticed by the public, gold soared to $600 per ounce while speculators made fortunes in real estate as prices responded to the dictum that ". . . they aren't making any more": Gold, land, petroleum!

While scarcity has driven up prices, dependably high prices have brought the expensive-to-extract oil sands of Alberta and oil shales of the American west into competition with traditional cheap-oil-in-a-barrel.

As far back as the 1940s, scarcity inspired Nazi scientists to develop a formula for converting coal into gasoline that almost helped them achieve world domination. But when petroleum became readily available again after the war, coal-into-gasoline lost its appeal, though it could certainly help 21st century America through the transition period from fossil fuel to whatever science can--and will--provide in its place over the next fifty years.

It's time to concede that the era of cheap energy from fossil fuels is over; that it might be prudent to put corn back into cereal boxes and dust off the German coal formula instead. For over thirty years we've agonized over our need to import more and more petroleum from remote and fundamentally hostile nations. But we did nothing, while emerging nations with huge populations began adding to the demand for oil creating ever-greater scarcity.

Continuing high petroleum prices will be uncomfortable, but they will provide the inspiration for innovators to invest of themselves and their resources in the development of entirely new sources of energy: the sun, the sea, the molten core. Gasoline from subsidized corn squeezings isn't even a good short-term substitute. We need to get serious! *

"Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom." --Fredrich August von Hayek

Read 1702 times Last modified on Friday, 23 October 2015 21:14
The St. Croix Review

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