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has been flat for 2 years. We may be on the peak plateau - once we slide off the plateau prices like this will seem low.
The Spoiled Brat Rebellion
By Dale Allen Pfeiffer
I truly do fear for this country, and for the world. Since the turn of the century, two countries have been invaded and ravaged in dubious or wholly illegal wars. Several other countries have been made to bleed or allowed to bleed because of business considerations, and the duly elected president of yet another country was nearly deposed by a fascist coup. A gulag has been established under US jurisdiction, where prisoners are detained indefinitely without trial, stripped of their rights, tortured and force-fed. Torture has been established as an accepted practice. The US constitution has been shredded, leaving US citizens under surveillance and subject to unlimited detention. Victims of one of the worst natural disasters in the history of this nation are further victimized by the very organizations that are supposed to help them through their tribulation. And the US, alone, is blocking any attempt to deal with environmental problems that threaten the future of life on this planet, while labeling environmental activists as eco-terrorists and persecuting them under harsh new anti-terrorism laws.
And does the public of this once free and still falsely proud nation stand up against these immoral and despicable acts? What do the benefactors of the American Revolution finally rise up and unite against? The rising price of gasoline. Force the US public to become cognizant of any of the truly evil things that are done daily on their behalf and they will feel uncomfortable and look away. But hit them in their pocketbooks and they will rise up in protest.
People all over the country who never raised their voices for any other cause are talking of boycotting gas stations in an effort to drive down gasoline prices. While some might think this is a good thing, a first dawning of awareness and activism, I am worried that it is the first whining of the spoiled brats that populate this once great land. How come they have not raised their voices over a thousand more worthy causes? Notice that this protest is solely about their immediate gratification.
If the boycott is successful, then the gas stations will lower their prices a little bit for the time being. And our political leaders will assume that this is a mandate in favor of intervention into oil rich lands and the importance of economics over the environment. The chance of long term success for this boycott is an impossibility because the boycott is based upon false premises.
Certainly, there is price gouging and profiteering in the oil business, but this is not why prices are surging so high. US demand for gasoline is taxing the ability of our refineries to supply us with gasoline. In April, the US had finished gasoline stocks at 11 to 11.5 days of supply. As Matthew Simmons has pointed out, compare this to 1979 when we had the longest gas lines since rationing in World War Two. In April of 1979, finished stocks had dropped to about 30 days of supply. We currently stand at almost a third of that.
This is why gasoline prices are going to continue climbing through the summer, no matter how much consumers howl or how many gas stations they ransack. And if any of our refineries are forces to idle production due to a breakdown or a natural catastrophe, prices will rise that much faster. Demand is on the verge of exceeding supply, and the two may never converge again. This is an effect of peak oil. Though there is still plenty of oil in the ground and plenty being pumped, production cannot keep up with demand.
So why don't the oil majors build new refineries or expand those already in existence? Because they know the investment will never be paid off. We will not see any expansion of refineries in this country until the US government foots the bill, or offers in some way to make the venture profitable.
How high can prices go? As high as they can until the economy tanks and demand is crushed. Prices might exceed four dollars per gallon before the summer is over, and may even approach five. To find out how high prices might possibly go, we would need to determine at what price a significant portion of the US public would no longer be able to afford the gasoline to go to work or do their grocery shopping. At what price will the US public begin abandoning their cars?
If we reach that point this year, it is doubtful that we will linger there for long. Eventually, as demand collapses and the summer driving season draws to a close, gasoline inventories should begin to build back up, and prices should drop. The operative word here is should. Nobody knows for sure. Anything could happen between now and the fall, such as the invasion of Iran and an oil embargo against the US. Or another bad season of hurricanes in the Gulf of Mexico.
Some do understand that a gasoline boycott is no more than an ineffectual consumer temper tantrum. Most of those who see beyond this say that we need hybrid cars and biofuels in the short term, and in the long term a return to the way we used to do things before the oil age. Yet this proposed solution also demonstrates a lack of understanding. Studies of many different models of cars show that for the entire life of the vehicle (including its construction) hybrids consistently rank as among the most energy hungry of vehicles — more so than many some SUVs. And biofuels will at best hasten environmental deterioration and drive up the price of food while doing little to control energy prices.
As for a return to the old ways. We built up this oil-based technological civilization over the course of a century. We cannot dismantle it overnight, certainly not as smoothly as it was built up. Most of the infrastructure of the old days has been eradicated. And in the US, our society has been built around the car culture. We are now sprawled over the countryside in a manner that would be virtually impossible without individual automotive transportation. Never mind that our population grown six-fold since the beginning of the oil age. What is more, while there is much that is commendable about the old ways, let us bear in mind that prior to the industrial revolution, all prosperous civilizations were run by slave labor. Before the age of oil, the fuel that ran the world was the sweat of enchained humans and draft animals. I doubt that any of us seriously want to return to those days.
No, the boycott of gas stations is the first sign of angry US consumers rearing their ugly heads. Gasoline prices are likely to decline again sometime within the year — if not completely back to the level they were at before this latest price surge began. Yet, in the not to distant future prices will begin to rise again as production diminishes. And this time there will be no letting up. They will rise to the point where consumers who are now whining will be squealing in pain as they can no longer afford to keep a roof over their heads and put food on the table.
At that point, US consumers will rise up and demand a solution. The spoiled brat rebellion will truly begin. Yet it will not be a rebellion for better social values and environmental sustainability, not if it is founded on entirely selfish desires. It will be a demand to bring down prices and return the market to normal at whatever cost.
The evils of the Bush regime were made possible by the tragic deaths of 9/11. Who will rise to power on the back of the spoiled brat rebellion, and what greater evils will they perpetrate? Will a spoiled brat rebellion give birth to a fascist debt slave empire out to rape what remains of the planet?
The only way to avoid this is to educate the public, while there is still time. The question is: can we educate the public without access to the mass media? Will the US public cease to be merely self-interested consumers and realize for once and for all that their well-being is intimately tied to the greater good of all fellow human beings and the planet?
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