The presidential candidates, hustling for their parties' presidential nominations, tell us that they are going to make us "energy independent." At the same time they also tell us that $3.00-a-gallon gasoline at the pump is highway robbery. Some announce that they are going to investigate the oil companies. This is political schizophrenia. We cannot approach energy independence and maintain cheap oil prices simultaneously...., Emerging Super-Powers, R. Emmett Tyrrell, Jr., The New York Sun, 6/8/2007
It should not surprise anyone to learn that $3.00 for a gallon of gasoline, if expressed in terms of 1970 dollars, corresponds to a 1970 price of thirty-nine cents a gallon, exactly a nickel more than the average price of gasoline in 1970. Highway robbery? In 1970, major oil companies owned the oil they sold. Now they have to buy it from someone else, the Russians or the Iranians, for example. In 1970, Americans drove about half as much as we do now. In 1970, the Chinese "economy" was largely an illusion. It's still modest in comparison to the EU or the US, but it's a hundred times bigger than it was then. Oil demand has doubled since 1970. Production has peaked at 85 billion barrels a year. Demand. Price. Simple economics. Reality. Why is it that gadflies have to point out the obvious?
Read Tyrrell's fine piece in the Sun. You shouldn't be surprised. There is a price for being stupid.
Luther
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