No one can have failed to notice the precipitous drop in gasoline prices. I keep complete records and try to always utilize the same pump at the same gas station for every fill up in an attempt to eliminate one possible variable from the data I gather. On June 17, 2008 I paid $4.959 per gallon for fuel. My most recent fill up was at $2.139 on December 3, and the price at that station has declined since then.
But oil prices have dropped from about $147/bbl to $40.81 currently. This is quite remarkable, and so I started doing a little research. A wonderful source for all things related to fossil fuel consumption in the United States is Energy Information Association web site. The link is for a summary page, going deep into the links can provide nearly any statistics one could want.
One revealing table concerns U.S. Crude Oil and Petroleum Products Product Supplied (Thousand Barrels per Day). This statistic stands at 17,796,000 bbl/day in September of 2008. In August of 2007, it was 21,434,000 bbl/day. This is a decline of 17%. Until recently, the question of whether the U.S. was in the midst of a recession was a matter of debate. While that debate seems to have been settled in the affirmative, such a drop in what is the life blood of, literally, every sector of the economy puts an exclamation point on this fact. And, in fact, this reduction in the U.S. amounts to about 4.5% of world wide fossil fuel consumption. Considering how exquisitely balanced supply and demand are, it is small wonder that the contracting economy and the consequent demand destruction for fossil fuel has resulted in a dramatic reduction in prices for forward contracts of crude oil.
What is to be made of this? In my opinion and as I first stated in a previous post, it is, in one sense, a huge opportunity. It gives us a chance (albeit a brief one) to start the process of retooling our economy (and our lives) for a time when cheap and easy energy is a thing of the past. How to do it?
As much as I chafe at his strident language and reject much of his finger pointing, some of the ideas of Jim Kunstler provide a constructive start. He recommends, among other things, rebuilding our intercity rail system and our local farming and manufacturing capabilities. I would add utilizing the (temporary) ability to purchase energy at bargain basement prices to utilize those manufacturing capabilities to invest in our energy infrastructure and localized energy production (bad word - energy is never produced but you know what I mean) and distribution.
But in a nation of Walmart consumers, self-satisfied and self-indulgent baby boomers, MTV, Fox TV, and Lil' Wayne watchers, Obama voters who think "now I don't have to worry about filling my car or paying my mortage" because the government will take care of them, so-called sports fans who brag that "if they (opposing fans) come into our house, they'll get a beer in their grill," what chance is there? I can only hope that Obama (as a point of information, I voted for Bob Barr) is able to parlay his wave of popularity into motivating his constituency (and those who aren't part of that group) to engage in the hard work of rebuilding our economy and our society.