Guys, guys, guys. You got me all wrong. Yes, I am cheering for more expensive oil. But not because I think it’s going to bring doom and gloom. Quite the opposite in fact.
First, I believe there is a tremendous amount of efficiency that can be squeezed out of American society. We built our society on the premise of cheap oil and have essentially been wasting it and polluting our environment for years. Now that oil is getting more expensive, we’ll see much less wasting of it. For example, teenagers may have to stop cruising on Friday nights (the horror!). Americans may have to buy smaller vehicles. People will fly less. Homes will get smaller. This is all great for our environment and global warming.
Second, in addition to demand destruction, alternative energy sources are now starting to become feasible. Americans will start buying 232-mpg Teslas and with more Teslas sold, the price will start to come down. This is the way it always works — more volume brings lower prices. Airlines will start to switch to biolfuels. Virgin Airways said they plan to use 80% algae-produced biofuel in the next one-to-two years. Solar power plants will start to come on line.
Expensive fossil fuel means that cleaner, sustainable energy sources are now cost effective.
So yes I am cheering for higher oil prices. But unlike youse guys, I don’t think it’s going to lead to a worse quality of life for Americans. I think it will lead to a better life in the near future and much better things in the distant future.
