Originally posted by: 0marTheZealot
The problem with reducing demand is the following:
As demand gets lower (let's assume it gets lower worldwide, more likely our demand reduction would be gobbled up by other countries), there will be excess supply. Let's suppose that we shave off 3 million barrels of oil a day for demand. This will probably relieve much of the jitters in the markets and bring the price of crude down to the mid-20s. Because reducing demand causes "hardship" (oh noes i have to carpool or make 1 big trip!), people are loathe to continue demand reduction in the face of cheap prices. Demand simply creeps back up again and we have this entire cycle again.
The more likely scenario is that our demand reduction will lower the price of oil worldwide, causing a surge in oil consumption from other countries like China and India and Europe. We are right back where we started. Or even worse, because the development of alternatives is that much more postponed (no one will think about alternatives even now, very few projects are profitable even with crude at all time highs).
So long as we ascribe to a culture of infinite growth, demand reduction can not be a permnament goal.
Not neccessarily - the reason our prices are as high as they are now is due much more to the lack of refinery capacity to process the crude oil, not the availability of the crude oil itself. The price per barrel of oil is only a small factor in the price of gas (for the CURRENT situation). Two years ago, when Bush released oil from the Strategic Petroleum Reserve, the price per barrel dropped to the 20's per barrel. Gas dropped below $1.00/gallon. Last year, crude oil was around $45/barrel (double from the previous year) and gas was around $1.49 per gallon. At $60/barrel gas jumped to $1.99/gallon. From that point, the fluctuations we have seen (according to the petroleum companies themselves) have been directly related to the demand for processed (ie: refined) oil, which we do not thave the facilities to produce. There is no lack of crude oil itself, and OPEC is completely overjoyed that we greedy Americans are willing to pay so much for what they still have plenty of.
The whole concept of "If we don't use it, other countries will" is ludicrous. China does not have the refinery capacity either - why do you think they were trying to buy Unocal? to help the US? No, they needed Unocal's refineries to supply China with
processed oil, which would have REALLY driven up prices here! Most of Europe is highly dependant on mass-transporation and high-efficiency autos (see
Here) that get between 44 to 64 MPG (and that's for the sports-roadster models). How many cars are available here in the US that get more than 35MPG??? Very Few!!