The Oil Drum

This is a guest post by John Robb. John is an author, an entrepreneur, a blogger at Global Guerrillas, and a former USAF pilot in special operations. His book, Brave New War was published in April 2007 by Wiley, which can be purchased here. The book apparently is influential, since Robb was named one of the "Best and Brightest" by Esquire Magazine and invited to speak at a plethora of venues (the DoD, CIA, NSA, NIC, Highlands Forum, Center for Biosecurity, and many more). The book is also being used in universities from the Naval Post Graduate School to Johns Hopkins.

The run-up in oil prices over the last four years is usually framed, likely correctly, as a combination of torrential demand from developing countries (China and India), speculation, and peak supply. Other analysis indicates that production is also being damaged due to NOC mismanagement, political instability, and rapid increases in domestic consumption within oil exporting countries.

However, the rapidity and volatility of current oil prices may be due to a more narrow set of factors surrounding the production of light sweet crude: the comparative quality and scarcity of light sweet crude, world demand, and guerrilla systems disruption.

In mayor Bloomberg's weekly radio address last week, he made a plea for conservation to reduce peak demand during the heat wave that hit New York last week and came very close to causing a blackout in parts of the city where feeder cables had failed. While the press only picked up on the more sensational charge he made, that oil imports from the Middle East fund terrorism, he actually made some very good points about energy consumption in general:

We have to make a decision in our society, given that we are never going to have enough energy in this country as we would like, at any price range: What do we want to spend our energy on? You can't for instance, spend it on air conditioning the outside. It would just cost an infinite amount of money.

Here's a summary piece on the USAToday/CNN/Gallup oil/energy poll that has some interesting, and shall we say somewhat contradictory results...

WASHINGTON (CNN) -- Although Americans don't believe the country faces an imminent energy crisis, most believe there are "major problems" --- from potential oil shortages to possible terrorist attacks -- and they are harshly critical of the leadership on the issue from the White House, according to a new CNN/USA Today/Gallup poll.

From the BBC:

Saudi security forces have foiled an apparent suicide car bomb attack on a major oil production facility in the eastern town of Abqaiq.

Update [2006-2-25 9:38:6 by Admin]: James Kunstler emails to clarify a point brought up in the comments:

In my book, "The Long Emergency," I said it would only take a camel and a few pounds of Semtex to bring down a pipeline, not an oil refinery. I don't think that's too fine a distinction.

Update [2006-2-24 15:2:0 by Admin]: We've been having some technical difficulties this afternoon. Hopefully the site is now up for good.

We've had many good discussions here at TOD about the efficacy of various measures to better curb our nation's consumption of oil products, in particular gasoline. But we know that most people in the US think gas prices are already unfair. In particular, we've talked a lot about raising CAFE standards versus increasing gas taxes, which are now at 18.4 cents a gallon. And many of the economists over at Environmental Economics have agreed that if you want to truly create a good incentive to consume less, gas taxes are probably the best way to do it.

Now, the NY Times has written a strong editorial endorsement of the idea that keeping gas prices higher through taxes would be good because: