I hear you about higher gas prices encouraging conservation. Unfortunately, it has been made quite clear that a huge chunk of the research dollars would go to developing e85 as a transportation fuel. This would be, IMO, worse than if we did nothing. We would find ourselves 10 years into the future, having wasted precious remaining time and resources, no better off and with no one to hold accountable for a failed energy plan. The final link in my original post summarizes my thoughts quite well on this subject.
Oil companies are not our friends, indeed. They are massive corporations that supply us with a perceived need, which we voluntarily purchase. All of us have the power to change our lifestyles and cosume less of their products, whose price we may find disagreeable.
Jay:
Yes, oil is a global commodity. But gasoline produced for the California market is not. There are many grades of crude; you only see the benchmark ‘West Texas Intermediate’ quoted in the mainstream media. The raw material for gasoline, crude oil, is only a part of the final price we pay at the pump. Further, rising prices don’t necessarily mean that production will increase. To quote Matt Simmons: “Oil is not a concept. It must be discovered and produced.” It is a matter of great controversy and debate these days about exactly how quickly the remaining oil can be produced. Currently no producer anywhere on the planet can regulate their production to affect prices. Hence the volatile (read: mainly rising) prices we have seen these last few years. California, and the United States as a whole, has only seen declining production for 35 years (Yes, environmental regulations and NIMBY issues may have affected production rates here in CA, but the cheap, high-flow stuff is gone).
As to exactly why gas prices will go up, start by reading this essay. Essentially, oil companies will pack up their E&P budgets and seek greener pastures in the face of a more hostile business climate. Specific CA crudes will become more expensive to produce. We must then acquire crude from elsewhere, refine it elsewhere, transport it greater distances, and combined with our more expensive local oil, the cost of the end product at the pump must go up.
