I have been blogging on gas prices for some time and I think that I understand it. I have already stated for the record that, "gas prices are not going to come down". If that is the case, what is all the debate about? That is what I want to know. The problem is that the debate that we seem to be having is not about what we can rally do about it. Since gas prices are not going down, the only thing that we can do is to figure out how we are going to pay for the gas we need. If we can pay for the gas, then the price of gas is not a problem. Did you That was because at the time the Washington Monument was build, Aluminum cost more than Gold. Now it is the other way around because we figured out how to process Aluminum cheaper. The value of different things change over time and oil is just one of those, but in the case of oil, it is going to get more expensive. Now what about the debate over gas prices and who controls the debate. We it is not you and me.
Here is the experiment that I ran on a few of my good friends who are above average in education. I asked them about the affect of approving the Keystone Pipe Line project and then let them free range with their answers. Here is what I got. I timed their answers to see how much time they used on each point. What I found is that over 90% of their time was spent on the price of gas and various ways that the Keystone Pipe Line would lower the price of gas. Most admitted that it would not have much affect on the price of gas, but it would have some and they felt that was important. After some guidance, some stated that it would create jobs and that it would make us more able to "pay" the higher gas prices. My point is that they one talked about this last point less than 5% of their allotted time. When most people listen to a debate, they judge positions by the amount of time spent on the different positions vs the content of the discussion. Most people would conclude by the amount of time spent on debating the price of gas that the price was by far the most important consideration. It is a little like discussing the weather that you can not do anything about. You never hear people talking about fixing the leak in the roof or building a dam. It seems to be the same with the price of gas.
Given that the price of gas is not going down, what do you think we should be debating? I think that we should be discussing how we can deal with higher gas prices. Based on the Gold, the price of oil is about the same today as it was back in 1975. You can buy about the same amount of oil for an ounce of Gold now as you could back then. How about a day's work back in 1975, how much gas could you buy? Based on making about $25,000/yr back then, you could buy about 125 gallons of gas. How about now making $125,000/yr? It is still 125 gallons. What has changed? The problem is that with world wide competition our growth in earnings is not going to be as strong as it had been in the past. Further, the price of oil is going to keep going up and refining efficiencies have just about played out.
Look at it this way. The world's population doubles every 33 years. Us humans around the world would all like a better quality of life and that means using more energy. The world wide average use of energy is now far below that of the USA. If we use more and others in the world also use more to gain a better quality of life, my estimate is that the energy use per person could easily double in the next 33 years too. If that is the case, we will need 4 times as much energy as we now use. I think that I showed in past blogs that us humans are going to have to climb higher on the tree to get food and energy and that food and energy will mean we will have to be at least 4 times more productive and efficient. I just don't see those kinds of changes being possible. That means that some people are going to starve or have a lower standard of living than they do now. In many cases, I don't see how they could go lower and still remain alive. Are you starting to see the problem and the short list of things that we can do about it? Note that lower gas prices is "not" one of them.
Obama and the media keeps talking about gas prices and us tax payers fall right into line and debate the same dead end question. I know that most people go along to get a long and like talking about the weather, talking about the price of gas is easy. Is anyone smart enough to get beyond the price of gas to the things that we need to do to maintain our quality of life? Can we save our way out of this? Can we find the magic car that gets 100+ miles per gallon? Can we raise food using less energy?
Can we stop the growth of world wide population? Can we get people to be more productive? Because most of our population are uneducated in science, many feel that we will "discover" some new energy or some kind of free lunch. My advice is to not hold your breath. It is not going to happen.
It is upto us to switch the debate from how to bring down gas prices to how are we going to be more productive enough to afford the higher priced gas. That sounds like we are going to have to work harder not less. Who wants that? We want magic!!!
