The Oil Drum: New York City

Helping New Yorkers understand, prepare and adapt to the implications of Peak Oil

Friday, August 12, 2005

What's driving gas prices higher?

I'm about to take off for the weekend to go camping. A little homework for everyone this weekend: Ask your friends, co-workers and relatives "what is driving gas prices higher?" Humor them as they talk about Bush, the Chinese, the war, the oil companies, etc.

Then mention these 3 facts:

1. No good information on oil exists inside of OPEC. There is no independently verified estimates of OPEC production rates or reserves. If we had a firm accounting of how much oil is really left and what fields are in decline then the markets might stabilize around a price that makes economic sense. Maybe mention Matt Simmons' book.

2. Add that OPEC has publicly stated that they cannot produce any more oil than current production rates and that non- OPEC producers have had a decline in production despite the high prices that should encourage more production. If price instead of geology drives supply then why hasn't this mechanism worked yet.

3. Tell them that we only have ourselves to blame for not using technology The average vehicle fuel efficiency has actually decreased since the the late 1980s and many of the new hybrids are being built for enhanced performance instead of fuel efficiency.

I'm interested in how these conversations go. Please post the results of your conversations in the comment section.


At 11:08 AM, Anonymous Anonymous said...

Good Job! :)

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