Cheap Equals Bad

This will come as no surprise to regular readers, I am not ecstatic that gas and oil prices are dropping (see previous post here). But today I read something that only backed up my feelings of dread on this subject. Here are a few snippets from Michael Klare's article that appeared on Salon explaining the problems with cheap oil:

1. The Price of Oil Will Remain Low Until It Begins to Rise Again. I know, I know: This sounds totally inane. It's just that there's no other way to put it. The price of oil has essentially dropped through the floor because, in the past four months, demand collapsed due to the onset of a staggering global recession. It is not likely to approach the record levels of spring and summer 2008 again until demand picks up and/or the global oil supply is curbed dramatically. At this point, unfortunately, no crystal ball can predict just when either of those events will occur.
   
2. When Prices Do Rise Again, They Will Rise Sharply. At present, the world enjoys the (relatively) unfamiliar prospect of a global oil-production surplus, but there's a problematic aspect to this. As long as prices remain low, oil companies have no incentive to invest in costly new production ventures, which means no new capacity is being added to global inventories, while available capacity continues to be drained. Simply put, what this means is that, when demand begins to surge again, global output is likely to prove inadequate. As Ed Crooks of the Financial Times has suggested, "The plunging oil price is like a dangerously addictive painkiller: short-term relief is being provided at a cost of serious long-term harm."
   
3. Low Oil Prices Like High Ones Will Have Significant Worldwide Political Implications. The steady run-up in oil prices between 2003 and 2008 was the result of a sharp increase in global demand as well as a perception that the international energy industry was having difficulty bringing sufficient new sources of supply online. Many analysts spoke of the imminent arrival of "peak oil," the moment at which global output would commence an irreversible decline. All this fueled fierce efforts by major consuming nations to secure control over as many foreign sources of petroleum as they could, including frenzied attempts by U.S., European, and Chinese firms to gobble up oil concessions in Africa and the Caspian Sea basin.
   

Wrong Direction

Seeing as how my gas gauge was dipping into the negative territory (I don't know what it is, but I loathe getting gas, not because of having to pay for it, but because I hate to actually get out of the car, pump it and pay. Back when I had my BP card it was somewhat better because at least I could pay at the pump. But since BP is dead to me, those days are over.) I thought it might be time to stop and fill up.

The spouse, who always seems to have cash on hand, proffered $20 since I am currently between currency and off I went. And dang if that $20 didn't practically fill up my wee car.

Unless you have been visiting a sister planet, we all know that gas flirted for awhile with the $4 mark, but today I purchased my plus unleaded for the bargain basement price of $1.77 a gallon.

You would think this would make me happy, but au contraire, gentle reader. Gas prices going down sends the entirely wrong message to the American consumer. Listen I get that things are not so shiny, happy out there. I hear the news, but gas prices going down is not the answer, it is like giving a heroin addict, meth. Sure they aren't on smack anymore, but they haven't exactly gotten clean. We need gas prices to stay up so industry and the consumers are more motivated to find alternatives. I say this not only so we can stop destroying our planet, yes I crunch like that, but also so we no longer have to kowtow to the countries with the oil. Becoming energy independent, developing the necessary technology to make that happen, is one of the few (if not only ways) the U.S. is going to retain our superpower status.