I had gas, sure. But it wasn't enough to get me where I was going. So, muttering to myself for my own shortsightedness, I motored on over to the nearest gas station, put four-and-a-half gallons in the tank, and boom, I was off.
At $2.39 a gallon, the ten bucks and seventy six cents I spent will last me a couple of weeks of commuting. Motorcycles tend to roll that way.
But we, as a society? We do not roll that way. Nor do we feel we have to. I mean, heck, gas is cheap. It's as cheap as it's always been. Cheaper, even, which has a significant impact on more than just personal transportation. Cheap fuel impacts our economy across the board, as the cost to both produce and move goods is held down. The ease of movement it creates also benefits the service industry, as the "transaction cost" of traveling to service locations is minimized. Fuel costs are exerting no upward pressure on inflation.
Ten years ago, that didn't look like it would be the case. Gas prices were soaring to record levels in constant dollar terms, reaching their highest point ever historically in 2008.
Ten years ago, that didn't look like it would be the case. Gas prices were soaring to record levels in constant dollar terms, reaching their highest point ever historically in 2008.
Then came the aggressive pursuit of hydraulic fracturing, or "fracking," which opened up shale oil reserves. And then came massive Saudi overproduction, designed to shut down new US exploration by making it economically unviable. And now? Now...thanks to fracking...America's accessible reserves have more than doubled, and our production of oil is going like gangbusters, even as the Saudis and the Russians cut back in an effort to hold prices up.
So now record-breaking American oil production is keeping gas prices low, which means we can livin' large and buying our big ol' utes and trucks like there's no tomorrow. And low gas prices keep interest rates low, which helps drive our roaring, superheated market.
But there will be a tomorrow.
The United States is currently producing 10 million barrels of oil a day, up more than 100% from ten years ago.
Current shale-inclusive industry projections of proven reserves under US control? 40 billion barrels.
Current shale-inclusive industry projections of proven reserves under US control? 40 billion barrels.
The math on that is pretty straightforward. At current production rates, we will have exhausted our known, economically-viable reserves in just over 10 years.
It can't continue. It's a finite resource. And we won't run at our current production rate for ten years. We can't. We'll have to throttle back, as we move to less accessible reserves.
When does eventually happen, that'll drive inflation up, because every single thing will cost more.
In an economy already superheated by debt, where even the whisper that inflation might be happening is enough to send Wall Street into a panic? And with the majority of the world's remaining proven reserves controlled by Russia, Saudi Arabia, and the new Venezuelan/Chinese partnership?
I just can't see how that ends well.
Shortsighted choices almost never do.
It can't continue. It's a finite resource. And we won't run at our current production rate for ten years. We can't. We'll have to throttle back, as we move to less accessible reserves.
When does eventually happen, that'll drive inflation up, because every single thing will cost more.
In an economy already superheated by debt, where even the whisper that inflation might be happening is enough to send Wall Street into a panic? And with the majority of the world's remaining proven reserves controlled by Russia, Saudi Arabia, and the new Venezuelan/Chinese partnership?
I just can't see how that ends well.
Shortsighted choices almost never do.
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