All great replies. Regarding what consumers can do…bob007 mentioned many alternatives already. These are the ‘fundamental lifestyle changes’ I am referring to. Yes, surging demand from developing countries promises to keep oil prices high for the indefinite future, especially in the face of limited supply. Personally, I drive less than 5000 miles per year, I live close to work, and commute by bicycle 2-3 days per week. I keep the thermostat at 68 degrees in the winter and raraly run the AC in the summer (since it is San Diego after all, and the weather is perfect so everyone wants to live here and therefore home prices will never decline har har har). Remember that slightly less than 1 billion of our planet’s 6+ billion people can even drive, so have some perspective when you question what ‘alternatives’ we consumers have.
OPEC does not actually set the price of crude oil. Rather, they attempt to control production to maintain a price band that is “fair” to both buyers and sellers. They raise production in the event of high prices and lower production in the event of lower prices. The official price band was $22-$28 per barrel, but of course prices have gone haywire in the last few years and no amount of heroic production increases have had an effect. Some people wonder whether OPEC should even exist anymore, as they and the rest of the world seem unable to increase production at this point (perhaps you are familar with the ‘peak oil’ debate, but that’s an entirely new thread).
Yes, oil companies do charge market rates for oil and many people find that unnerving. But what would happen doofrat tried to be realy nice and sell his refined gasoline at a lower price? I would step in and buy it, then immediately turn around and sell it for it’s true market value and retire a tremedously rich young man. This is why any act of charity on OPEC or the oil companies’ part would not work–people will always step in and arbitrage it for it’s true market value.
I better stop soon because I could go on for pages, but a final thought on alternative energies. Very few are scalable, and there are no silver bullets, but certianly some technologies will have a limited role in the future. We need to be smarter about how we use energy going forward, and we need to have rational and educated discourse on the subject instead of pointing fingers or praying for miracle technologies. After all, it’s a new paradigm (seriously, it is 🙂
