Monday, April 28, 2008

As For Those Gas Prices

Am I being too hard on McCain and Clinton over gas prices? If anything, I'm being too easy on them - and on Obama who, although not joining in "gas tax holiday" silliness, also hasn't articulated an energy policy that will take us off our present course.

What course is that, you ask? Well, as much as one can predict the future, it appears to be this one:
As oil prices soared to record levels in recent years, basic economics suggested that consumption would fall and supply would rise as producers opened the taps to pump more.

But as prices flirt with $120 a barrel, many energy specialists are becoming worried that neither seems to be happening. Higher prices have done little to attract new production or to suppress global demand, and the resulting mismatch has sent oil prices spiraling upward.

* * *

Oil prices might reach more than $200 by 2012, [CIBC World Markets analyst Jeff Rubin] said, a level that would probably mean $7-a-gallon gasoline in the United States.
And if oil prices don't reach $200/bbl in 2012, how many more years do you suppose it will take?

A three month "gas tax holiday", which McCain suggests will increase consumption? How much farther can you get from facing the realities of the situation?

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