Tuesday, April 18, 2006

Seventy-One Dollar Oil (And a Hot April)

Oil passed $71 per barrel today--$71.60, to be exact--a record high. Chalk it up, if you wish, to problems with various suppliers: Nigeria, Iran, Iraq. And blame it on increased demand by the usual suspects, namely China. But don't overlook the fundamental scarcity which is the intractable context in which all these factors operate.

And speaking of records, we've been setting them here in Kansas this month. After an unusually warm fall and an unusually mild winter and--nationally--the warmest January on record, southeast Kansas has decided to skip spring and head straight to summer. April has been hot and dry, with temperatures in the upper 80s to low 90s. Today we hit 94. I don't know if that's a record but it sure as hell is hot. Or sure is hot as hell. Or something like that.

How, you ask, is a hot April related to expensive oil? The connection is straightforward. Oil is scarce and therefore expensive because all that oil we used to have, but don't any longer, has been pumped and burned. The pumping and burning--particularly the burning--has released into the atmosphere millions of tons of carbon dioxide. Carbon dioxide is a "greenhouse gas" which traps solar radiation and warms the planet. All that pumping and burning and warming will ensure that we will continue to enjoy hot Aprils long after the exploitation for energy of fossil oil is a distant memory in the history of planet Earth.

You may want to read my previous posts on the upward march of oil prices, starting with this one. I have also written that high energy prices, though painful, are essential.

Copyright (C) 2006 James Michael Brennan, All Rights Reserved


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