In the past week we saw Crude Oil Futures hit an all time high and as of June 8th 2008 Gasoline prices have hit an all time national average high of $4.00 so what is happening to force prices up so high?

Lets take a look at some of the reasons the people in the industry are giving and see if there is any real cause an effect to the reasons they are giving.

The first reason and most often heard is supply and demand. Oil Producers and Petroleum Refiners have been telling us for the past 3 years that there has been an increase in demand however the number of vehicles on our streets and homes that use oil for heating has not increased proportionally to the rise in cost.

In other words to go from $1.35 a gallon in 2000 to $4 a gallon in 2008 we would have needed to add approximately 3 more cars for every car that was on the road in the year 2000. This just is not happening and as a matter of difference the first quarter of 2008 has seen a reduction in miles driven across the board.

Reason number two
Lack of new refineriesby gasoline producers is the reason for price increases. Again this is another false claim. The actual number of refineries the petroleum companies run in the United States has reduced over the past 30 years because of improvements and expansion at the current facilities.

So, Fuel Refiners have seen expansion at main hubs located mostly at port cities where imports are delivered. New equipmentandlarger facilities in key locations along with under ground pipe lines that deliver gasoline from Louisiana to Chicago, Philadelphia, San Francisco and other distant points of use has meant that local refineries are no longer needed as they once were.

Reason number three
Lack of in country production requires us to purchase more product overseas and increase the price at the pump. This is also not true based on the first reason of supply and demand. If there is not a huge increase in demand then there should not be a disproportionate increase in the need of supply no matter where the supply may come from.

Oil producers believe that they should be allowed to drill in the Alaskan reserves and say that a 1 million barrel a day supply may “MAY” be found in those areas. Decades of exploration drilling has never found this magical oil reserve however even if it exists isn’t it important that we keep portions of our oil on reserve for that final time when oil production in the middle east and other countries drops so low that we must rely only on in country oil to run our infrastructure. 

If we do have unfound oil it will be discovered in the madness once we are actually have wars that politicians fess up to and acknowledge they are purley about oil.

So, what is the real reason for High Gas Prices?

Well when we look at the big picture there are a few major influencing factors that are causing an increase in oil and gasoline costs.

The first and most important one because it is something we can actually address from within our own country is the waste of fuel by people that don’t understand or care to acknowledge the full cost of their waste. Yes we have to look at people making decisions over a 30 year period to buy larger vehicles and waste oil for heat in their homes.

When we decide to say as a society that driving a Cadilac Escalade, with a larger sound system, more dvd/tvs then the average home has…. alone to work 50 miles each way every day is attractive then we have lost control of our fuel consumption.

Economic Alternatives have shown up in the past 10 years to provide us with vehicles that get 30 to 50 and even higher miles per gallon but the fact is no one thinks they should take advantage of them in their own lives.

Second and one we do not have control over is development of outside economies leading to higher fuel demands overseas. China, India, the continent of Africa and Eastern Europe have seen large increases in their fuel needs. As each one of these locations has over 1 billion people each we can expect this need for fuel to double every 10 years as their population grows.

Once the world population reaches a limit there will be wars over fuel and food and land area.

The fact is in America we have been wasting time developing alternatives for this eventual future and wanting things faster bigger and at a cost that will hurt us all in the end.

Over the ground trucking should be replaced by slow moving electric train freight systems that can move non-perishable goods from north to south - east to west on high torque and low power consumption electric.

When today one windmill can power 1,000 homes and we are dropping hundreds of millions of dollars into local school systems not for education but for Sports Programs. Ten Million dollar Gyms and 750,000 dollar sports fields when less then 1% of 1% of children will see either college scholarships or eventual jobs in professional sports is a huge waste. Using that same money to buy Windmills and Solar electric, water and heating systems will reduce costs for the future and supply electric for most people found in suburban and semi rural communities which make up the largest number of homes in America.

If one windmill can power 1000 homes why would anyone complain about a series of windmills being installed along our major highways or developing wind and solar farms in unlivable desert areas of our country or on toxic wast dumps and other like places.

The fact is these things can be done today without any new technologies being developed and doing so means we will rely less on foreign oil when the time comes for war.

The truth is it has come time to not invest in multi billion dollar sports arenas in our major cities, to say goodbye to our SUV’sand Trucks if we never use them for work related reasons and to decide that shopping malls with 200 stores all containing the same garbage that no one ever seems to buy should be replaced by more economical decisions in distribution and demand.

We can do this but unless our neighbors join us it will never get done.

So if your neighbor is showing off their new SUV and its not getting over 30mpg call them an asshole and when your school or town votes to spend money on something that won’t serve all of us tell them you and your children would appreciate it more if they bought a few windmills instead of blowing a million dollars on a ball field.

And finally the last an most dangerous reason oil and gasoline prices are so high is because of economic terrorism. This is a silent war where huge interests control the production, distribution and refining of Oil and now have decided that the best way to cause havoc and economic catastrophe is to control oil prices and force them higher.

Unfortunately there is no solution to economic terrorism. America needs the oil and if we divest in oil futures to lower prices we will lose control over a portion of the market. To use less oil we would have to conserve at about a 50% reduction which is not possible in the short term.

The only posible thing we can do is plan and build out an alternative fuel source to replace our dependence on oil and we must do this before the tools neccessary to perform the task are gone and we are forced to adopt fuel sources like Nuclear Energy globaly on a scale so massive that would cause even more problems in the long run.

If this article sounds alarmist then you are starting to understand the depth of the problem. Solutions are there for us to pick and choose and as we progress in technology new standards can replace the old. But just like we moved from Coal heat in our homes and whale oil for lights we need to begin this challenge on a scale that makes oil and nuclear power sources so unattractive that we look at them the same way we would the slaughtering of whales in our front yard to produce heat for our homes.

The time is now and only individuals can make this happen. No government organization or company will be willing to go against the standard because there is too much money being exchanged. But you already know that. So, voice your opinion with your friends, neighbors and coworkers and lets all push this through no matter who tries to stop it.