3 Reasons the U.S. Should Want Higher Oil Prices

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The argument for lower oil prices is an easy one to make. Higher oil prices cost consumers and businesses more money, therefore lowering demand for other products. And since we import most of our oil, the money that isn't made by traders is just being sent abroad.

But a deeper look at the U.S. oil industry shows that maybe higher oil prices (within reason) aren't so bad after all.

1. Creating jobs here at home
One of the side effects of higher oil prices over the past decade has been increased production in the U.S. and Canada, lowering our dependence on oil from the Middle East.

That trend will continue if oil stays above $100/barrel, but when oil starts to drop, the economics change. Oil shale is economically viable when oil is between $70 and $95 per barrel, but wells are shut down if oil goes lower. The higher the price of oil, the more economical it is for companies including Kodiak Oil & Gas (NYSE: KOG  ) , Continental Resources (NYSE: CLR  ) , and Petroleum Development to expand oil shale production.

The same goes for offshore drilling. With oil being found in deeper and deeper water off the Gulf Coast, there's a threshold where deepwater rig owners like SeaDrill (NYSE: SDRL  ) , Transocean (NYSE: RIG  ) , and DryShips (Nasdaq: DRYS  ) start to see demand fall off.

Alaska would be an even harsher climate for oil drilling; it would require high oil prices to be profitable.

You can't just stick a straw in the ground in the U.S. and expect oil to come out, like Saudi Arabia or Iraq. It takes capital-intensive investment, which requires high oil prices to be profitable, but would have the effect of creating U.S. jobs.

2. Reducing our reliance on foreign oil
The expansion of oil shale and deepwater offshore exploration and production has also led to a lower reliance on foreign oil over the past six years.

Not many people realize that our net oil imports have fallen from 60.3% of total consumption in 2005 to 47% today. Rising oil prices have had a direct impact on this continued reliance on foreign oil. If oil prices go down, shale production shuts down, offshore drilling stops, and we import more oil.

3. It's good for our energy future
I hope by now that even the staunchest oil supporters have recognized that oil is no longer the future of energy. Renewable sources are. Solar, wind, and other renewable energy sources have rapidly fallen in cost over the past decade, driven in part by rising energy prices.

Nothing helps the renewable energy industry more than headlines of $120/barrel oil, or gas over $5 at the pump. Since oil shale and solar energy are two of the few areas in the economy that are actually creating jobs, we don't want that momentum to stop. Higher oil prices would help drive even more investment in these areas.

For as much publicity as Chinese solar gets, U.S.-based SunPower (Nasdaq: SPWRA  ) and First Solar (Nasdaq: FSLR  ) are the industry's leaders in efficiency and cost, respectively, and both have plants in the U.S. First Solar is even adding to capacity by building a new plant in Mexico.

As the cost of solar falls, shipping costs, which are related to oil prices, will rise, making domestic manufacturing more attractive. Who wants to build a solar panel for $0.50 per watt and then spend $0.20 per watt shipping it? Again, higher oil prices lead to more U.S. jobs.

Foolish bottom line
I'm not suggesting that oil prices above $100 would result in immediate economic growth. In the short term it would be a negative. But if we look at all the new jobs that could be created in oil shale, offshore drilling, and renewable energy, we should consider the positives of higher oil prices.

More jobs and a reduced reliance on foreign oil are things we all should agree would be good for the USA.

Which stocks do Motley Fool analysts think will win big in a world of $100 oil? Click here to get our free report titled "3 Stocks for $100 Oil" to find out.

Fool contributor Travis Hoium owns shares of First Solar and SunPower and has sold puts in SunPower. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Transocean. Motley Fool newsletter services have recommended buying shares of First Solar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On September 08, 2011, at 3:55 PM, wrenchbender57 wrote:

    Thanks for another perspective Travis. I have thought for a while now that every time oil prices go up that increase makes other forms of energy cheaper by comparison. Never took it to the degree that you did in this article though. We hear enough doom and gloom lately. It is nice to see the positive side of this issue for a change.

  • Report this Comment On September 08, 2011, at 4:18 PM, majorkq wrote:

    I echo the previous commenter's sentiments. Well placed arguments for a longer-term approach to higher oil. Nevertheless, any increase in oil volatility as we move towards that higher oil price is whats really going to screw over the economy as companies take a step back to evaluate the situation thereby putting a slow down on the well-run financial machine.

  • Report this Comment On September 08, 2011, at 4:40 PM, yankee1943 wrote:

    the oil company must be paying you big because the little people can,t stand any more

  • Report this Comment On September 08, 2011, at 5:37 PM, GrumpyOldGuy wrote:

    Isn't this similar to the "broken window" theory where a broken window isn't bad because it gives someone a job replacing it. The consumer is paying an extra 100-150 Billion a year for gas in 2011 compared to other years and this is money that could be going for things that could get our economy going again. Sorry, I'm not buying your theory.

  • Report this Comment On September 08, 2011, at 6:58 PM, tomcaop wrote:

    #3 is silly we do not need more energy especially from sources such as shale. we need to eliminate the products that use it such as the car. if hi oil prices lead to a depression i say good that wills help the environment.

  • Report this Comment On September 08, 2011, at 7:26 PM, CMFStan8331 wrote:

    Excellent analysis. If we focus too many resources on getting the economy going again right now, we will fail to make the sorely needed investments that can supercharge our long-term future. I'm not advocating a laissez-faire approach when people are suffering, but it's a fact that sub-$60 oil could do tremendous harm to the US economy if it persisted over even a moderately extended period of time. Refusing to accept any short-term pain is a large part of how we got into this mess in the first place.

    For those who think cheap oil is really cheap, try adding in the cost of the Iraq war to the equation. Then add in what would be the truly staggering cost of a war with Iran. The only way to avert the possibility of incredibly painful and expensive conflicts over threatened disruptions of the foreign oil supply is to gain our energy independence, and that simply CANNOT happen cheap oil.

    Diverting our resources into propping up cheap oil would be a truly self-defeating strategy for our economic well-being, much in the same way that propping up excessive housing prices led us into economic ruin.

  • Report this Comment On September 08, 2011, at 7:48 PM, buddylee59 wrote:


    I'm sorry. I just don't get it. I've read your article a dozen times, and I still don't understand it.

    Your discussion of the economics of $100 oil is bizarre. The ostensible 'benefits' are ridiculous. Please don't take this the wrong way. I'm sure you know a lot more about investing than me, but how can you say $100 oil might be good for the US because it will create more domestic oil jobs, speed the adoption of green energy, and reduce foreign oil dependency? We can accomplish all of those goals without oil going to $100. Here's how:

    1.End the moratoria which have been placed on drilling in the Gulf and Alaska. Neither environment is as geopolitically 'harsh' as the Straits of Hormuz; and stop driving costs ever higher with still more regulatory layers which serve no purpose except to employ bureaucrats who are oil industry lackeys anyway;

    2. Do everything we can to facilitate the transport of domestic oil via pipeline from Canada and Alaska; the costs/risks are less than collecting and transporting oil from Saudi Arabia;

    3. And finally, let the market decide when renewable energy's time has come. For years I've been hearing about the future dominance of renewable energy, and it all sounds great, but has yet to translate to reality. The current administration's Green Jobs canard will be remembered with the same disdain as Jimmy Carter's sweater and Gerald Ford's WIN buttons. Invest in green energy companies that are good businesses, not because the government is giving them 50 million dollar grants. Your statement that nothing helps the renewable energy industry more than headlines about $120 oil only underscores the fact that these businesses generally can't compete on their merits, either against US oil or Chinese solar companies.

    I thought the relative strength of the US currency might be a reason to discuss the possible benefits of higher oil prices, but that point is nowhere to be found in the article.

    Please accept my apology, Travis, if I've blown up a harmless what-if article with this rant, but I still don't understand the logic that would prompt you to speculate that higher oil prices might be good for us because these higher prices might lead us to more costly, less efficient energy behaviors. If you keep writing articles like this, I'll expect to see you running for office shortly.

    Best Regards,

    Buddy Lee

  • Report this Comment On September 08, 2011, at 8:11 PM, TMFFlushDraw wrote:

    Buddy Lee,

    1. There is no longer a moratorium on drilling, business is basically back to normal (although few want to admit that). There are currently 70 drilling rigs operating in the Gulf of Mexico, according to the Bureau of Ocean Energy Management. The problem is that most of the oil is in deep water and all of the deep water rigs are booked.

    2. The big point that you're missing is that if oil goes to $60 per barrel (for example), oil shale, drilling for oil in deep water (where the oil is), and the oil sands in Canada are economically unattractive. Therefore, oil prices closer to $100/barrel lead to investment in all three.

    We want oil to maintain at a level where investment in these three domestic (including Canada) sources will be invested in.

    3. The market has decided. The US is just behind the curve on green energy. Don't think Warren Buffett wouldn't be building wind turbines if it didn't make sense economically.

    Also, green energy isn't as expensive as the far right would like you to think. First Solar is building plants at around $0.17 per kW-hr, competitive with retail prices in high cost states, and costs are only falling. First Solar expects levelized cost of energy to be $0.10-$0.12 per kW-hr by 2014. This is something we don't want to kill in its tracks with ridiculously low oil prices. That's the point.

    As I said at the beginning of the article, I am pointing out the positives higher oil prices have in the economy. There is short-term pain, no doubt, but we should at least be aware of the positives.

    Travis Hoium

  • Report this Comment On September 08, 2011, at 8:18 PM, whereaminow wrote:

    ----->Isn't this similar to the "broken window" theory where a broken window isn't bad because it gives someone a job replacing it. <----

    Similar yes. This analysis only accounts for what is seen, but ignores what is not seen, i.e. the effects you pointed out.

    David in Qatar

  • Report this Comment On September 08, 2011, at 9:57 PM, mtr wrote:

    The fool must be terrorists for wish gas barrels above $100.

  • Report this Comment On September 08, 2011, at 10:43 PM, RenegadeIAm wrote:

    Oil should be market price.


    There is no "should be" price, except through artificial measures (such as taxes, over-regulation, corporate welfare, etc.).

    The price is the price. Stop trying to come up with excuses to artificially manipulate it.

  • Report this Comment On September 08, 2011, at 11:03 PM, MichaelDSimms wrote:

    The only reason I would want oil to go up is if I owned oil stocks, or worked for an oil producing company. Your other reasons don't hold water or oil.

  • Report this Comment On September 08, 2011, at 11:56 PM, buddylee59 wrote:


    The image of Warren Buffett building a wind turbine has made my day.

    Regarding the lifting Of Moratorium:

    Gulf- How many permits have been issued? I think if you check you'll find not many.

    Alaska- it may be cold, but the oil is just as easy to get as in Arabia- it's just a question of political will.

    Regarding the cost of obtaining domestic oil via fracking etc: There is a strategic benefit that your cost analysis omitted. We are the ones who determine whether it is worth it or not, and it wouldn't be the first time we spent more money because we determined it was in our strategic interest to do so.

    And, finally, I am sure the far right would have me think a lot of things, but having said that it is certainly true that the Chinese have destroyed the price points of our much-ballyhooed solar industry, including the firm which has laid off hundreds of its employees and is requesting tens of millions more government dollars just to survive. ( I won't name it because a major political contributor is on its board, and questions have already been asked about its ability to obtain federal funding, considering its board member's affiliations.) Torture the numbers any way you want, but when you have to scale your argument by saying it holds water in the states where utility costs are already too high, you've made my point for me. It's all a matter of scale, and when it comes to energy/utilities, the government's finger is firmly on that scale, disrupting the very balance you propose to champion. Remember cap and trade?

    Once again, thanks for that image of Buffett building the wind turbine.


  • Report this Comment On September 09, 2011, at 12:36 AM, CCharing wrote:

    1. There is no longer a moratorium on drilling, business is basically back to normal (although few want to admit that). There are currently 70 drilling rigs operating in the Gulf of Mexico, according to the Bureau of Ocean Energy Management. The problem is that most of the oil is in deep water and all of the deep water rigs are booked.

    Perhaps not "in name" but the permit process is now very long and arduous... Time value of money and all - the process is more expensive now than it use to be.

    That process also contributes to uncertainty which tends to dissuade further investments (in rigs, which as you mentioned are booked) - it's not as simple as saying "oh the moratorium is over," not entirely...

  • Report this Comment On September 09, 2011, at 1:31 AM, CaptainWidget wrote:

    You suggest we help the economy of US oil production by HURTING the economy of US oil consumption.

    hmm.....that couldn't possibly balance out or even turn negative, could it?

  • Report this Comment On September 09, 2011, at 10:12 AM, Eerkes wrote:

    Travis, while your article has some merits, your comments are silly,

    1)lifting of moratorium in fact means nothing if the moratorium in practice still exists.

    Also your 3) point I still can't understand, seeing as how you have the word "not" imbedded in a sentence 3 times. I just reread and I'm not sure what you are trying to say.

    Still, I do agree with the premise of your article.

  • Report this Comment On September 09, 2011, at 11:21 AM, GigemAgs2009 wrote:


    Interesting article. Before I comment, I need to disclose some information; I am an engineer in the oil and gas industry. I am currently responsible for drilling, completing (i.e. fracturing), and producing oil and gas wells.

    I agree with your first two points. The oil and gas industry is one of the few remaining industries where the American Dream that our parents came to know and love. An individual with an 8th grade level education can start working on a rig at $8/hr and eventually work up to company rep making $300k+ year. 90% of the money that I see spent goes to small/medium business that live, work, employ, and spend in the good ol' USA.

    As commodity prices and their outlooks change, I see the budgeted capital being moved around like the wind. Currently, oil is the hot one. Everyone wants to produce it at the current prices. And when prices go down, all activity more or less comes to halt. Granted, the world continues to move on, but it becomes very difficult to persuade management to fund a multi-million dollar progect for a POTENTIAL rate of return of 5%. After all, GASP!, the well could be a dry hole.

    Thus, higher commodity prices = more spending = more oil and gas production = less foreign dependence on oil = more domestic jobs.

    The only challenge I offer is to your third point. I know, I know - here's the big oil guy coming down on renewables. I agree, it is a conflict of interest. Regardless, I want to make an argument that anyone is free to debate...

    Can we really put up enough solar panels and/or wind turbines to adequately energize the country? Everything that I have read suggests that renewables are definitely in the picture for the future. But I have seen no case made suggesting that they can adequately power our nation's cars and homes. I am no renewable expert, but I have heard that turbines use more energy than they capture. And how big of a solar panel do I need on my house? Heaven forbid I get a week of cloudy weather? I do know that more energy goes into making ethanol/biodiesel than the product holds.

    Those are my two cents. Thanks for reading and Fool on!

  • Report this Comment On September 09, 2011, at 11:57 AM, TMFFlushDraw wrote:


    With SunPower panels we could power 265% of the U.S. electricity needs from the Mojave Desert alone. So I think the answer to your question is, yes. See an article I wrote on the topic below.

    There are absolutely challenges to overcome for solar (storage, transmission, costs), but fracturing wasn't economical a decade ago either. A little engineering magic can go a long ways.

    Travis Hoium

  • Report this Comment On September 09, 2011, at 12:42 PM, hbofbyu wrote:

    The cleanest, cheapest, most efficient power source is hydro. We need more dams even if it is at the expense of an endangered fish or turtle.

    Wind has been given huge govt incentives and shows precious little sign of being other than an expensive mistake.

    Back in the 70's there was an energy crisis because "the world was running out of oil" Even the rock group Tower of Power had a song on the radio "There is Only so Much Oil in the Ground".

    40 years later and we still have at least 300 years of oil at current consumption rates. If solar or wind or any new technology arises to seriously compete, the price of oil will drop and make them unprofitable. Technology will advance to allow cleaner extraction and burning; and more efficient consumption.

    One more thing. A nation of electric cars is not feasible from a standpoint of logistics, resources, efficiency and cost, Electric Car is basically another form of a coal burning car but with added inefficiencies to convert the coal energy to battery storage. And then there's the scarce elements such as neodymium and lithium carbonate required that could not supply our population of cars.

  • Report this Comment On September 09, 2011, at 12:47 PM, jargonific wrote:

    Americans are unable to pay for health care and can't support basic cost of living increases annually. Their jobs are fragile. Their kids schools are falling apart. And you think we should hope for higher oil prices? It's absolutely ludicrous. These corporations have far too much influence over global policy makers wish to let them run roughshod over the truth (oil reserves are not falling, not low, but getting richer) ---and raise prices? That would be stupid. We have to get the markets off of the drug of rising oil prices, and stabilize them again without these huge demands for growth...lest they fail altogether. Sun Power was bought by TOTAL oil, by the way. Their stock has gone down ever since, so I guess they are not being helped by that acquisition. It makes sense that oil companies would buy up alternative energy companies, and then not fund them into solvency right?

    It use to be OK for a company to do well year after year, now they must do SENSATIONALLY well, lest they lose stock value due to an analysts' predictive skills...ha. We have to get off the rising oil prices drug, off the growth drug, and hope for stabilization...or we will never again see the kind of American economy we have grown use to over the decades since WWII. Oh, and get off of the defense industry drug... again a real trap.

  • Report this Comment On September 09, 2011, at 1:05 PM, Brettze wrote:

    If you are a green power investor, you are stupid for thinking or believing that high oil prices will help you with your green power investments.. Uncanny investors always predict things to come.. that is why they make mistakes.. but if they are right about predictions, they get rich.. Investors dont get rich making sure that time is perfect to do it.. they do well before the time comes.. sometimes years before!! As for green power versus fossil fuel power, it is already a non brainer for anyone to simply reduce their holdings in "ultraconservative" fossil fuel assets and move to green power.. While it is true that photovoltaics is falling in price as more compaines are getting bankrupt... , but PV prices can go up again as ol prices head up.. The last remaining PV companies that survived will not be giving away PV modules at bottom prices again.. It is a merciless world out there.. But if oil prices go up, our ecoomy is so certain to collapse... Look at millons of commuters snaking down the highways in the ween hours of the day as well as the dusk hours of the days consuming millons of barrels of oil everyday... They wll suddenly thin out overnight.. Oil prices may come down hard or not is not as important to think about.. Either way, you wil be better off if you just unload a portion of your oil investments by at least 25%.. This can drag down the DJIA stock average major time.. but our eocnomy will gain a signiicant breath . We got to cut down on our oil consumption .. Whether you want to increase green power or not is your option not mine... Oil has no future no matter how hard oil compaines is doing with destruction of our Earth.. through fracking techniques a really crazy idea of cracking or pressuring crack our crust... deep down.. This is really crazy!! and insane... You as an oil investor is a crazy person already!1

  • Report this Comment On September 09, 2011, at 1:11 PM, Brettze wrote:

    Also , this is the major reason for Bernanke's helicopter bombing missions over our heads.. Banks collapsed because of higher oil prices as borrowers are less able to keep up with payments.. Oil prices was around $40 when we had the famed real estate craze and the Greenspan refinanicing spree from 2000 to 2006. Once oil prices start to climb, boom, our economy fell apart... The hidden reason for higher oil prices is to take apart government ... Why is it that we call government big but not calling Oil BIGGEST AND BADDEST!???

  • Report this Comment On September 09, 2011, at 1:17 PM, CaptainWidget wrote:

    Wasn't oil $130 a barrel a few months ago? With those high prices and all the extra spending, surely unemployment must have dropped...oh wait....

    I'm astounded by how stupid smart people can be.

  • Report this Comment On September 09, 2011, at 1:19 PM, Brettze wrote:

    The original reason for higher oil prices was to get us get hot about green power after watching Inconventient Truth fling... What we dont understand is that we can do more with green power if oil prices is lower... We need the "savings" from lower oil prices to invest in green power... If oil prices is higher, we will be forced to borrow more from banks who would not lend at all .. Banks are collapsing and falling apart from higher oil prices but we still blame banks for our economic collapse.. What an whitewash???? Suppose that oil prices hadnot gone up to $150 in case you forgot already, our economy would be in much better shape... Oil prices zoomed to $150 from $40 in a matter of years... This is way too much!! We already took out huge mortgages on high real estate values and maxed out on our credit cards when oil prices hit.. Now we are trying to climb out of the stinking hole and you say it is good to see higher oil prices.. The only good thing about higher oil prices is that we are "forced" to choose fuel efficient models or car makers are forced to make them... We have no discipline at all.. We knew better than to lavish too much money on oil products... We act irresponsbily and we pay higher oil prices for our irrational decisoins on energy consumption.. Americans consumes five times as much energy as next door guys ... Five times!!!!!!! Higher oil prices are already here and you say more higher oil prices... You make a decent income and your sense oif reality is up in the cloud.. not most of us... Nobody ever encourage carpooling for example... It is not easy to pin blames around let alone seeking out asses!!1

  • Report this Comment On September 09, 2011, at 1:21 PM, Brettze wrote:

    Travis, you probably earn around $100K annually or more and it is very easy and convenient for you to say higher oil prices is good as long as you are still able to afford to fill er up every week... You still have your job... Higher oil prices destroy jobs because banks are not gonna lend money ... We have to find other sources of energy that will not keep going toward the Moon or even Pluto!!

  • Report this Comment On September 09, 2011, at 1:24 PM, Brettze wrote:

    Solar energy is the most plentiful energy resource becaue we can put them out in the outer space and have it tethered to Earth.. It is limitless.. Why are we still drilling , baby, drilling and fracking??

    I rather see higher aluminium prices from increased consumption .. Alumiunium can reflect sunlight and point it toward power generation targets in greater concentration that is very powerful. You just dont want higher aluminim prices but you want higher oil production... You jerk!!

  • Report this Comment On September 09, 2011, at 1:25 PM, Melaschasm wrote:

    GrumpyOldGuy basically got it right.

    High oil prices benefits oil producing states at the expense of oil consuming states.

    High energy prices benefits the energy industry at the expense of all other industries.

    The 80's and 90's had very low oil prices. The late 70's and the past few years had very high oil prices. Which economy would you rather have?

  • Report this Comment On September 09, 2011, at 1:26 PM, johnnyg1200 wrote:

    I seem to remember candidate Obama saying he wanted higher gas prices. He wanted this to reduce American demand for foreign oil and to spur green energy advances. At the time of his election to the office of president gas in St. Louis was down to about 1.34 and that includes the Illinois side of the city that runs about $0.15 to $0.20 higher than on the Missouri side. So in reality we were at about $1.25. Now Three years later we are at $3.50 give or take depending on the day and sometimes even the time of day. Unemployment is close to 9% and holding. Tree solar panel manufacturers went out of business in one month. Chevy announced that sales of its flagship hybrid the Volt have been dismal. If that isn’t bad enough the prices of basic food stuffs have started to skyrocket almost as fast as the gas prices. The thing that most of the college educated morons don’t understand is that the American economy is dependent on cheap energy. Everything in this country depends on it. The consumer needs it because ever dollar put into the gas tank is not spent on consumer goods. Manufactures and retailers need low energy costs so they can afford to ship their goods on the truck, train and plains. Industry needs it to run its smelters, furnaces, fuel the heavy equipment, heat the building and turn on the lights. Every dollar sucked up in high energy cost during this process results in lost jobs and a failing economy. Remember before the unemployment rate jumped 2009 and before the housing market crises in 2008 one other thing happened. In 2006 gas prices climbed from under $2.00 to around $4.00 a gallon by 2008. In the five years since gas prices doubled we have not fixed any of the thing that high gas prices where suppose to fix. Why should we think it will in the next five?

  • Report this Comment On September 09, 2011, at 1:31 PM, Brettze wrote:

    Travis , just wait until you are fired our kicked out of your stupid desk job.. You will see what higher oil prices can do to your stupid desk job!!

    you are not immune1!

  • Report this Comment On September 09, 2011, at 1:35 PM, Brettze wrote:

    Low oil prices is as important as enegy conservation.. The only way we can keep oil prices down is through energy conservation EVERYDAY NON STOP... never going back to V8 engines, etcetra... Big OIl is not going to encourage us to conserve oil and natural gas... Big Oil is trying hard as hell to find more oil and natural gas that we will never have enough of to waste with... or lavish more money on. We are ADDICTED TO OIL AND NATURAL GAS , and Big Oil knew that... Big Oil is in a very sweet spot of our stinking economy!! Big Oil keep telling that they cannot drill for more oil as long as it is not economical to do so... so we threw wallets and purses at Big Oil like we did to TV evangelists! Remy Tammy and Jim Bakker??/ Crazy TV religious couple!!

    Same thing!! We are dumb Americans!!

    and proud yet!!

  • Report this Comment On September 09, 2011, at 4:43 PM, bpshand wrote:

    With all the hoopla about renewables replacing oil don't forget that you can't fly an airplane across the country (or anywhere for that matter) on solar or wind power. Same with trucks, trains and ships. And please don't tell me about sail boats.

  • Report this Comment On September 09, 2011, at 8:40 PM, addikt06 wrote:

    This article makes no sense and does away with basic economics :)

  • Report this Comment On September 09, 2011, at 11:27 PM, johnnyg1200 wrote:

    Energy conservation will not affect fuel prices one bit. The oil industry has realized what the consumer will pay. If we use less they provide less and the price stays the same. The only way to bring energy cost down is to find economical and plentiful competitor for oil. I did not say replacement because if oil is replaced by one energy source we will be in the same position we are in now. The new supplier will demand the same kind of payment we make now because we will pay what we can afford to whoever supplies it. The idea of replacing oil with one replacement that will be cheap is a lie. It will be taxed and regulated by governments and used as a profit source by the supplier. Unless we have eight or ten different suppliers all competing energy continue will be expensive. That is why we need to use coal, oil, natural gas, hydroelectric and nuclear to the maxim possible extent now and we must peruse geothermal, solar, methane hydrate, hydrogen fuel cell, and bio fuels such as biodiesel producing algae. Converting food crops into biofuel is not efficient. Although I am a fan of the trading policy of a bushel of food for a barrel of crude. OPEC thinks we don’t pay enough for oil and I think they don’t pay enough for food. I left wind out because wind is not sustainable or dependable. Every watt of electricity produced by wind needs a watt of back up for the windless days.

  • Report this Comment On September 10, 2011, at 10:13 AM, wrenchbender57 wrote:

    Renegade, Who mentioned anything about manipulating prices? I don't see that anywhere in the article or the comments. Did I miss something?

  • Report this Comment On September 11, 2011, at 2:47 PM, Chippy55 wrote:

    Don't forget the 4th reason: Russia is a net exporter so THEY LIKE HIGHER PRICES, duh, that's the exact opposite of what happens here in America, the Saudis LOVE higher oil prices so they can continue to fund people like bin Laden, the Libyans love it, the Irani's love it, so in a nutshell if you are the enemy of America, you love higher oil prices. Oil is the lifeblood of America.

    I saw a 5 watt (five) solar panel at Lowes the other day for $47 dollars. To run 1 (one) 100 watt bulb would cost almost $1,000. Pie-in-the-sky people.

    Those windfarms in California are killing thousands of birds each week, their carcasses litter the ground, why don't they show that on the Liberal media ?? Because that doesn't fit their pie-in-the-sky narrative.

  • Report this Comment On September 11, 2011, at 2:53 PM, Chippy55 wrote:

    And another thing: pharmaceutical need oil to produce medicines; engines need oil for lubrication; Air Force One needs oil to drag the President around the Country as he searches for the next cheeseburger to shove in his pie-hole; we need oil for the other jets that the First Lady takes when she decides to take a separate plane from his highness when she goes on vacation to Martha's Vineyard, or to spain where she rents out all 500 rooms, or to South Africa; we need oil for the Navy, for tanks, and to fight in America's 6 (sic) current wars, that's what it's called when you bomb another Country. What is the ideology behind leaving almost 2 trillion barrels of oil under the ground in America, in order to ship it 8,000 miles away from Countries who daily chant "Death to America, Death to Israel"?

  • Report this Comment On September 12, 2011, at 1:01 AM, ETfirst wrote:

    An interesting convrsation for the most part. I agree with an earlier contributor who said that the market, not the government, should set prices, not only for energy, but for all commodities. I never did agree with Musollini's dogma that only the central government bureaucracy was knowledgeable to make decisions for the people.

    On the subject of alternate energy sources: Europe has had wind turbines producing electricity for over 3 decades. There is now millions of MW of rated capacity in place. Several years ago, the EU Energy Commission issued a report based on their experience.

    The turbine production average 30 to 35% of rated capacity.

    Because wind is not reliable and turbine operation is limited to narrow range of wind speed, the grid to which turbines are connected must have an alternate energy supply available to seamlessly pick up the load when the turbines must be shut down because of too little or too much wind.

    Economically, turbine power requires premium rates and direct subsidy from the taxpayer.

    This past winter or spring, the Economist reported that the German taxpayer had paid the turbine industry a direct subsidy of 12 billion Euros in the previous fiscal year. This was over and above the rate premium. That's about 130 Euros for every individual in the country.

    Electricity can only be stored in batteries. There is a company reporting development of a lead/acid array capable of storing up to 5MW. I think there are environmental and technical problems with actual operational status. Lithium, which performs better in batteries, has, in additional to its own enviromental problems, an availability problem. According to the USGS, 99+% of the world's knowm Li reserves lie outside US jurisdiction. Fifty percent is in Bolivia, 30% is divided between Chile (current leading exporter) and Argentina, 15% is divided among Russia, China, and Australia. The remaining 5% is scattered around the world. All of the less than 1% in the US is owned by a single privately held company.

    As for solar power, the sun doesn't shine at night which brings up the storage question or a dual system, one for daytime and one for night time.

    As nice as the alternatives sound,it appears that fossil fuels, nuclear, and hydro will remain the primary sources for energy production.

    If I may digress and refer to the comment about Pres. Obama's mention of gasoline prices: he said that he thought $5/g was a good starting point for increasing the price. I think he had in mind that the price rise would result from increased taxes. In January, 2008, he told the SF Chronicle that his energy policies would necessarily cause energy prices to "skyrocket", and people would just have to live with less energy.

  • Report this Comment On September 14, 2011, at 10:44 AM, Safcraker wrote:

    I must not have my facts straight so if someone could help me straighten myself out, I would appreciate it. So far, the only complaint I have seen about converting our transportation system over to natural gas is fracking. Let's set that aside for a minute and look at the benefits the way I see it, please correct me if I'm wrong.If fracking is a problem that could be overcome.

    1.) We have an abundant supply of natural gas. Enough to carry us over until technology comes up with something as appealing.

    2.) It's considerably less than regular gas, so much less in fact, that it could be taxed more to pay for our much needed infrastructure overall and it would still be a lot cheaper than regular gas.

    3.) We spend a billion dollars a day, give or take a few million here and there, on foreign oil, seems to me, this money would be better spent on our own natural resources that we have here.

    4.) It would put a huge dent in our trade deficit.

    5.) It would create millions of GOOD PAYING jobs here in the U.S.

    6.) We wouldn't need to send our soldiers off to foreign countries to protect our future oil needs.

    7.) It's a lot cleaner to burn than regular gas.

    8.) Those that have natural gas piped to their homes and with the right "kit" could fill their vehicles at home.

    We're talking a billion a day 365 days a year, roughly a trillion dollars over the course of three years, lot of dough, wouldn't you say. Why does this seem like a no brainer to me, but our president apparently doesn't see it this way or he would have said something about it in his jobs plan. Someone please explain why this is not on the front page of every paper every day of the year until it's accomplished.

  • Report this Comment On September 15, 2011, at 10:47 PM, Oldfool103 wrote:

    Every dollar over $60 or so brings the reality of a major pipeline spill from the Keystone closer. (14 last year, alone, on the original Keystone line.) Not to even mention that every barrel of tar sands oil triples the amount of CO2 going into the atmosphere. Yes, my Canadian bank has me infested with Alberta Tar and Transcanada Pipe, neither of which are making me rich and both of which could tank with a few more protests like those that went on in front of the White House. We need renewables (and more gasoline savings) yesterday in order to keep oil demand down to the point where we can keep the Alberta tar on the ground.

  • Report this Comment On September 16, 2011, at 6:37 PM, Marcotoll wrote:

    The USA controls almost 70% of the worlds known coal reserves. Coal to fuel is an inexpensive means to produce domestic energy. For 70yrs countries have been doing this. The USA has only two facilities that do this and one is 100% devoted to providing the US military with fuel. I service parts to the coal industry and have seen how the DofE and EPA are not renewing mining permits. Sistimaticly removing a cheap fuel for domestic use. So this article is lacking all the facts. New facilities can not be built but only expanded. They produce a profit at $40 a barrel. The lies and lies that are pumped out so consumers to buy the illusion that cheap domestic energy is not possible. The Germans used the process in WWII. Government and oil companies have kept the amazing resource from you. So your article is not up to par.

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