It's because we have a dumb president, a big corp vice president, hawkish administration and finally....drum roll pls...5 generations of Americans addicted to OIL - the (used to) cheapest energy. Imagine all the money spent in Iraq & Afghan for the last 5 years - no less than 2 trillion are used to build alternative energy like solar, wind farm, hydro and etc. We can cut all the oil import from middle east probably in 2007. The solution is so simple and obvious but we miss it and now, the window is closed and lets brace for the train wreck...
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Why We Can’t Stop $100 Oil
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But demand is booming elsewhere, especially in the Middle East. The nations that have grown rich on petrodollars aren't just spending money on champagne and lavish hotels on the French Riviera. They're plowing cash into diversifying economies, building things that use lots of energy—condominium towers in Dubai, an indoor ski resort in Bahrain and petrochemical plants in Kuwait and Saudi Arabia. In the past, OPEC could calm oil markets by increasing supply. But OPEC members are now eating a lot more of what they grow. Between 1997 and 2007, notes Yergin, six Mideast OPEC members—Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates—boosted production by 2.5 million barrels per day. But they increased consumption by 1.9 million barrels per day. In effect, three quarters of the production increase stayed in the region.
The trends that boosted demand in 2007 are still intact. OPEC projects that in 2008, world oil demand for crude will rise by 1.3 million barrels per day, but that non-OECD countries will account for 1.1 million barrels per day, or 80 percent of the total. China alone is expected to boost consumption by 400,000 barrels per day. Lehman Brothers analysts project that this year OPEC countries will increase their use of oil by 350,000 barrels per day, or 4 percent.
It's beyond our control. Using less gas, running factories at fewer shifts and redoubling efforts to conserve and find alternatives may save us some money. But it won't result in lower prices at the pump.
© 2008
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