Oil is a fungible commodity. What this means is that oil from Venezuela is the same as oil from the Persian Gulf is the same as oil from Canada is the same as oil from Iran, etc. It also means that there is a set worldwide demand for it, so if we stop buying Iranian oil, for instance, Iran will not miss a tick, because they will just sell it elsewhere for the same price. So, it pretty much means one thing…
The GOVERNMENT has ZERO say in how much oil is going to cost. If we, for instance, put a price cap on oil so it would not go above, say, $60 per barrel, as soon as oil went above $60 per barrel, guess what happens?
That’s right, they just sell it elsewhere, to someone else, and we don’t get any oil. Cars wait in lines at service stations with no gasoline. Trucks sit on the side of the road without their refrigeration units running (since they’ve run out of fuel) and the goods inside spoil. Our economy comes to a screeching halt, and we enter a depression that makes the Great Depression of the 1930’s look like fun time at Ronald McDonalds funny Mcfun-house.
Still want the government to do something?
When in fact, the only thing the government really is doing is passing laws making it impossible to drill for oil in the gulf of Mexico, ANWR, and in other places, because of all the NIMBYs in America. Oh, and they are also not allowing any new refineries to be built, which is straining production so that whenever a hurricane blows through and shuts a refinery down, we don’t have enough excess refining capacity to keep us up and running, and so prices go up.
There are three things that can save us. Bio-fuels, synthetic fuels, and conservation. Just don’t drive as much to conserve. As soon as fuel starts hitting these record highs, like $4 a gallon, biofuels and synthetic fuels (like rendered coal petroleum oils) will become more viable and able to sustain themselves in the free market without government subsidies. As soon as that happens, we will see an explosion of biofuel production, which I think will be enough to reduce or eliminate our dependence on foreign oil, just as long as we can talk the greenies into letting us drill in ANWR and off the coast of Florida.
Hand-wringing and stressing out about it won’t do a lick of good. Besides, if there is anything Americans are good at, it is stepping up to come up with new ideas and plans to avert a crisis.