If you live in the San Francisco Bay area and prefer premium, then you’re practically there right now. The rest of us may have to wait until summer, when oil-industry experts say gas prices will spike just in time for the family-vacation driving season.
There’s not much Americans can do to stop this from happening–the problem is already in the pipeline, so to speak. But we may be able to blunt the impact in the future if we do a little long-range thinking today. In short, we should quit importing so much fuel from abroad and start growing more of it here in our cornfields.
Relying so heavily on Saudi Arabia and the other members of the OPEC cartel just doesn’t make economic sense (to say nothing of the national-security questions involved). If these oil-producing nations were companies operating inside the United States, they’d all be guilty of collusion and price gouging. Nothing seems to regulate their behavior except greed.
Even though we’re currently experiencing the highest sustained level of oil prices in more than two decades, OPEC recently announced that it will cut production in April. As the supply shrinks, prices will rise–and Americans will pay the tab, which the oil sheikhs will then use to finance their luxurious palaces, air-conditioned limousines, and whatever else oil sheikhs spend their money on. (They certainly don’t invest the proceeds from their natural resources into their own people: About half of all Saudi women are illiterate.)
Analysts predict that oil prices will dip slightly in April and May and then surge in June. Right now, the national average for a gallon of regular unleaded gas is about $1.71, which is two cents shy of the all-time high, set last year. Odds are good that we’re going to break this record soon.
And there’s also a good chance that we’ll keep on breaking it in the years ahead. The New York Times recently reported that Saudi Arabia expects to pump about 10 million barrels of oil per day in the year 2011. That’s an increase over the current level of about 8 million barrels a day, but also considerably less than the 14 million barrels the U.S. Department of Energy says Saudi Arabia will need to produce by then in order to meet the anticipated world demand.
The problem isn’t that Saudi Arabia is running out of oil–it still has 250 billion barrels of proven reserves. It’s that the remaining oil requires more expensive extraction techniques.
Add it up and we’re looking at a situation in which gas prices remain permanently high. Things could go even worse, even faster than expected, if ongoing political turbulence in Venezuela–a chief source of American oil–continues to affect production there.
One possible solution is to grow fuel right here in the United States. At the moment, something like a billion bushels of corn–roughly 10 percent of U.S. corn production–goes into the ethanol. This meets only about 1 percent of American fuel needs, but with a concerted effort from private industry and the public, we can increase this level and reduce our dependence on the whims of foreigners who don’t care how much Americans pay at the pump.
Scientists are already at work on conventional and biotech solutions. They are breeding and ‘biotechnologically enhancing’ strains of corn that are better adapted to ethanol production. This means that we’ll be able to produce more of this clean-burning fuel at lower costs. All of this also means more jobs for Americans.
President Bush seems to understand both the challenge and the opportunity. “Renewable fuels, such as ethanol and biodiesel, play an important role in a comprehensive energy plan that promotes conservation and reduces dependence on foreign sources of energy,” he said in a message to the National Ethanol Conference last month. “Ethanol and biodiesel are also an important part of our rural economy and a great example of the success of value-added agriculture.”
The alternative is to watch our own hard-earned money continue to fly out of our pockets and into the Swiss bank accounts of modern-day robber barons. And that’s something that makes me even angrier than paying three bucks a gallon.