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This is my effort to share my thoughts with readers about concerns facing our country today.  I believe there is a good chance my grandchildren may be the first generation in the history of this great country not to have a better standard of living than their parents. If so, our generation is to blame. The clock is running out for damage control. .

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Saturday
May242008

Crude Oil Pricing for Dummies

The price of oil is high. It is going up. Why?

Every day the world produces 85 million barrels of crude oil. Every day the world uses 86.5 million barrels of crude. End of story.

Next year the world will produce 84 million barrels of crude a day. Next year the world will use 87.5 million barrels of crude a day.

The following year the world will produce 83 million barrels of crude a day. The world will use 88.5 million barrels a day.

In those years the demand reduction in the USA will be more than offset by the demand growth in China and India. The supply reduction is not OPEC related but simply less production from existing fields not offset by new fields coming on stream. 

T. Boone Pickens says a fool with a plan will outsmart a genius without one. Our country is getting outsmarted and will dig a bigger and bigger hole.

Our elected officials have no plan. Nor do any of the three candidates for president. Nor does my congressman, nor do either of my senators. Nor my governor. Nor do my neighbors.

Some do have plans. All, without fail, will make our enonomic future darker. Those plans are: windfall profits taxes, carbon caps and trades, some yet to be discovered renewable energy, ethanol mandates, begging the king of Saudi Arabia, asking big oil to voluntarily cut crude prices below market value, asking big oil CEO's their salaries, making supreme sacrifices for global warming, stop filling the straticgic reserve, sue OPEC, investigating crude oil traders, letting the military use coal gasification but not private industy, having the UN beg countries to reduce carbon dioxide emissions, and last, but not least, debate. Boy can we debate.

There is a reason why most succesfull corporations have never had an attorney for a CEO. By education and training, attorneys stop things from happening or find reasons to slow them down. All successful corporations have had to rein in the law department. Their role is to assess risk for the movers and shakers and get out of the way. Somehow, this country decided to let them run the country. You reap what you sow. Most of the attorneys who read this blog will not understand the first two paragraphs or want to debate them. Remember, they are beavers who dam up the streams of progress.

Every day I grow more and more pessimistic that this great country in going into the sunset years. The lack of an energy plan that can work and will sustain our economy and let us grow as a nation will do us in. It will continue to get worse as we send money to those who hate us in exchange for their oil. When they have enough of our money, and we are running out of money, they will stop sending the oil. When they stop sending the oil, we will have an economic collapse. One that will make the depression my parents lived through look like child's play. 

Global warming will be the least of our worries. Survival will be the concern of the day.  

Reader Comments (4)

Based on your figures, inventories should be dropping at a rate of 1.5 mb/d. It is not too hard to figure out that prices will continue to rise and we will soon run out of oil. However, I don’t see us running out of oil, because as the price continues to rise, consumption and demand will have to drop because people will not be able to afford it. Sooner or later, demand will balance out, but unfortunately, world growth will be curtailed and the Change that Obama has been promoting will become reality.

Life as we know it today will no longer exist and the world will be a very different place to live. A time which will return us back to a simpler life, one which most of us have never seen or experienced nor can imagine.

Talk about Change!!!! No Thanks

May 25, 2008 | Unregistered CommenterKen Dozier

China keeps the retail gas price at $2 per gallon. As long as they can continue to do that their demand will pick up the rest of the world's slack. a

May 25, 2008 | Unregistered CommenterBill Robertson

You hit the nail on the head in terms of overall oil S&D data, but where are the solution suggestions? I've always been taught, and believed, in business don't bring me a problem without offering your idea for a solution, otherwise, you're just complaining. I tend to agree with most of your comments here, regarding energy, lawyer, politicians, lawyers, lawyers, politicians, lawyers, etc....I got your site from "AmericanSolutions.com", think you might get more feedback and a better cross section of ideas from that site with a bigger following.

June 2, 2008 | Unregistered CommenterDarrin Boster

Thanks Darrin:
I am offering solutions as I go along. If you scroll back you will see I forecast this problem as early as February. I am a believer of take a brick out put a brick back and I won't just point out problems. My congrssman has all of my blog entries, I dropped them at his house last Saturday.
My approach is to point out problems, them offer solutions. Thanks for your comments.
Bill

June 3, 2008 | Registered CommenterBill Robertson

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