I'm depressed.
Today’s paper said that oil could exceed $100 per barrel. On a personal level, this is a mixed bag. I’ll elaborate on that below.
http://www.tulsaworld.com/BusinessStory.asp?ID=050424_Bu_E1_100oi54618
$100 oil more than fantasy
By RUSSELL RAY World Staff Writer
4/24/2005
When Goldman Sachs suggested in a recent report that oil could spike to as high as $105 a barrel, crude prices surged and Goldman was denounced for steering the market to improve its trading positions.
But the prospect of oil spiking above $100 a barrel is not a far-out notion found only in fantasy.
…So, if one major supply disruption can push oil prices to triple digits, imagine the levels prices would rise to amid two major disruptions. What's more, think of the price you'd pay at the pump if
oil rose above $100.
I can see people pushing their SUVs off cliffs, leaving them on the side of the road to rust or using them as backyard forts for the kids.
Some aren't waiting for prices to rise that high.
…Bill Sherman, the Tulsa World's religion writer, recently began pedaling to work. Twice a week, Bill leaves home on his 10-speed bike and pedals five miles to our downtown office.
He does it for the fresh air, the exercise and, of course, the savings in fuel costs.
"I like doing it," Sherman said. "It saves me about $2 a day."
…Ironically, $80 to $100 oil may be the only way to bring prices back down to more affordable levels. Barring a large new source of oil, only a sharp sustained increase in oil prices will reduce the world's thirst for crude, Goldman said in its report.
I remember the ominous forecast former ExxonMobil geoscientist Arthur Green delivered to a group of Tulsa geologists last October.
He said the oil industry is on the verge of entering its most challenging phase -- a period when the production of oil peaks and oil prices rise to new heights.
"The world is going to shudder," Green said.
Rising oil prices will cause an increase in alternative transportation modes like cycling, walking and public transportation. I believe this is a good thing, not because I hate automobiles or their drivers, but because I believe it’s a responsible environmental choice. Simply drilling more wells is an irresponsible choice. But I’ll refrain from another rant about the Bush administration’s energy policy, for now.
Like nearly everyone else in this country, I depend on truck deliveries for food and other essentials. When fuel prices rise, the prices of those delivered goods rises too. That money comes directly out of the family budget, so if we spend more for food, there’s less to spend somewhere else. This basic principle seems to be lost on our political class.
But that’s a minor consideration compared to this: My job depends on oil prices to some extent. I work for a major airline. I won’t go into the logic, or more likely, the LACK of logic of having bankrupt carriers set the fare structure. I won’t write about the competitive advantage that bankruptcy brings. No, my concerns are much more visceral, much more personal. I could lose my job, and believe me, that’s a gnawing worry centered in my gut, the kind of worry that brings me wide-awake at 3 AM.
I’ve already had to make a fresh start twice. When the bike shop went under, I left Pittsburgh with less than $100 to my name. If it weren’t for some friend’s generosity, I would have been living on the street. Years later, Mary and I packed up our few belongings and moved to Tulsa. We had a baby on the way, and I needed a job. Both times were difficult and a little scary, but neither compares to the prospect I face now.
I’m fifty-three years old. My kids are teenagers and one will be graduating from high school next year. She wants to go to college. Will the money be there? Will we be able to afford it? I have no idea, but I do know that if my job goes down the tubes, her opportunity will most likely go with it.
I’ll be eligible for early retirement in two years. That’s an especially cruel joke. I can’t afford to retire yet, but when I do, will any kind of retirement be available? The airlines got many employees to retire in the 90s and just after 9/11. Now the companies seem determined to dump their retirement plans onto the taxpayers, effectively pulling the rug out from under their retirees. Add that to those gnawing 3 AM worries.
But for now, I’ll make a stack of pancakes for our breakfast. There’s nothing quite like comfort food to take care of gnawing worries.
http://www.tulsaworld.com/BusinessStory.asp?ID=050424_Bu_E1_100oi54618
$100 oil more than fantasy
By RUSSELL RAY World Staff Writer
4/24/2005
When Goldman Sachs suggested in a recent report that oil could spike to as high as $105 a barrel, crude prices surged and Goldman was denounced for steering the market to improve its trading positions.
But the prospect of oil spiking above $100 a barrel is not a far-out notion found only in fantasy.
…So, if one major supply disruption can push oil prices to triple digits, imagine the levels prices would rise to amid two major disruptions. What's more, think of the price you'd pay at the pump if
oil rose above $100.
I can see people pushing their SUVs off cliffs, leaving them on the side of the road to rust or using them as backyard forts for the kids.
Some aren't waiting for prices to rise that high.
…Bill Sherman, the Tulsa World's religion writer, recently began pedaling to work. Twice a week, Bill leaves home on his 10-speed bike and pedals five miles to our downtown office.
He does it for the fresh air, the exercise and, of course, the savings in fuel costs.
"I like doing it," Sherman said. "It saves me about $2 a day."
…Ironically, $80 to $100 oil may be the only way to bring prices back down to more affordable levels. Barring a large new source of oil, only a sharp sustained increase in oil prices will reduce the world's thirst for crude, Goldman said in its report.
I remember the ominous forecast former ExxonMobil geoscientist Arthur Green delivered to a group of Tulsa geologists last October.
He said the oil industry is on the verge of entering its most challenging phase -- a period when the production of oil peaks and oil prices rise to new heights.
"The world is going to shudder," Green said.
Rising oil prices will cause an increase in alternative transportation modes like cycling, walking and public transportation. I believe this is a good thing, not because I hate automobiles or their drivers, but because I believe it’s a responsible environmental choice. Simply drilling more wells is an irresponsible choice. But I’ll refrain from another rant about the Bush administration’s energy policy, for now.
Like nearly everyone else in this country, I depend on truck deliveries for food and other essentials. When fuel prices rise, the prices of those delivered goods rises too. That money comes directly out of the family budget, so if we spend more for food, there’s less to spend somewhere else. This basic principle seems to be lost on our political class.
But that’s a minor consideration compared to this: My job depends on oil prices to some extent. I work for a major airline. I won’t go into the logic, or more likely, the LACK of logic of having bankrupt carriers set the fare structure. I won’t write about the competitive advantage that bankruptcy brings. No, my concerns are much more visceral, much more personal. I could lose my job, and believe me, that’s a gnawing worry centered in my gut, the kind of worry that brings me wide-awake at 3 AM.
I’ve already had to make a fresh start twice. When the bike shop went under, I left Pittsburgh with less than $100 to my name. If it weren’t for some friend’s generosity, I would have been living on the street. Years later, Mary and I packed up our few belongings and moved to Tulsa. We had a baby on the way, and I needed a job. Both times were difficult and a little scary, but neither compares to the prospect I face now.
I’m fifty-three years old. My kids are teenagers and one will be graduating from high school next year. She wants to go to college. Will the money be there? Will we be able to afford it? I have no idea, but I do know that if my job goes down the tubes, her opportunity will most likely go with it.
I’ll be eligible for early retirement in two years. That’s an especially cruel joke. I can’t afford to retire yet, but when I do, will any kind of retirement be available? The airlines got many employees to retire in the 90s and just after 9/11. Now the companies seem determined to dump their retirement plans onto the taxpayers, effectively pulling the rug out from under their retirees. Add that to those gnawing 3 AM worries.
But for now, I’ll make a stack of pancakes for our breakfast. There’s nothing quite like comfort food to take care of gnawing worries.
posted by Ed W at 10:06 AM
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