Oil Price plunge 2nd day in a row. Are Happy days here again?

Oil prices dropped for the second straight day. The stock market is rising except oil stocks which are falling. Somewhere a Chevy showroom is dusting off a Tahoe in the hopes they'll finally be able to sell the incredible hulk. Are happy days here again.

Probably not.

According to the NY Times: Chip Johnson, the president and chief executive officer of Carrizo Oil and Gas,
a Houston-based company, said he was “confused” by “such wild swings.”
But he added: “I can’t see oil getting cheap again ever. It’s just too
hard to find, and too many people want to use it.”

Right now, in San Carlos, CA it is 96 F outside, by my count, the 12th day of 2008 tht has topped 90. Last I heard, our Forest fires were less than 300, down from 1300 about a week ago.

These dots connect, or so it seems to me. There are two compelling reasons to get away from fossil fuels as fast as possible. The first is the compelling case that it is getting warmer, most years and will continue to do so. The second is the sheer economics of the situation. Even if fossil fuel was clean-burning we simply cannot use it as much to heat our homes and power our transporation. Actually, there's a third reason: Most of the countries that have the stuff don't like us very much.

Gotta go fill up my Acura. Heard a rumor premium is down to $4.75 at the Olympus station.

Comments

[Mark Harrison]

I agree with your analysis that, long-term, reducing reliance on fossil fuels is, well, the only option!

However, I'm a bit concerned by the idea that the CEO of an Oil Company wouldn't be aware that commodity prices are notoriously volatile!

Most people I talk to in the industry are expecting prices to:

- Go up over the next 5-10 years
- Come down (a bit) over the next 1-2 years
- Have NO IDEA what they'll do next week

[Mike Crowl]

I came across a billionarie by the name of Pickens talking about options in a video yesterday (see the link attached). There are still some people trying to think their way out of this mess.
(By the way, just reading Naked Conversations - lots of good stuff there, even for non-business people.)
http://www.webitz.net/running-outbut-not-of-wind/

[Craig McClure]

The pink elephant dancing in the middle of the room is the internal combustion engine. Hybrids, diesels, mopeds, etc. are just bandaids on a sucking chest wound. Internal combustion engines are woefully inefficient machines by their design.

Too much of the energy created by burning fuel is lost out the exhaust, like smoke up a fireplace chimney. Then we have to use up energy to pump coolant thru the thing to keep it from getting too hot.

Electric motors don't have that problem, but the electricity is generated by burning fossil fuels. The only way to stop the merry-go-round is with true alternative energy: photo-voltaic, wind, or nuclear reaction. And we haven't bothered to explore these avenues thoroughly thanks to the cheap and available short-term fossil fuel thing.

So high gas prices could be what saves the world.