I know this is a bit off topic for this blog, but did you see the article in the New York Times this weekend called American Energy Policy, Asleep at the Spigot? There were several quotes that made me splurt my coffee onto the paper. Here's two of the gems.
Amazing Quote One: Regarding the current state of oil prices ($145 a barrel today), Chevron CEO David O'Reilly had the following to say:
"We can see how you can get to $100. At $140, I just don’t know how to explain it. We’re surprised."How's that? The CEO of second largest US-based oil producer doesn't have a clue why his product is trading almost $50 over where he thinks it should be?
I'm going to go out on the limb and figure that Mr. O'Reilly has his finger on most of the market forces that are causing the huge run up in prices: limited refining capacity, increased foreign demand, etc. So when he says that the 50% premium that oil is getting over his expectations strikes me as just a little, uh, peculiar?
It's leading me to think that speculation is playing an ever larger role in the recent price jumps. More people are shoving money into oil to turn a quick dollar through commodity investment. Maybe it's wishful thinking on my part, hoping gas will get cheaper when the oil bubble finnaly bursts...
Amazing Quote Two: From Pete Domenici, ranking Republican member of the Senate Energy and Natural Resources Committee and a 36-year veteran of the Senate:
"Much of what we’re seeing today could have been prevented or ameliorated had we chosen to act differently. It was a bipartisan failure to act."Pick me up off the floor, a member of the United States Senate showing insight and laying blame at his own feet!
If you want villans in government, then look no further than legendary pols Carl Levin and John Dingell of Michigan. So short sighted are these two charlatans, they actually believed they were helping the US auto industry by preventing changes to CAFE standards when every indicator and measusurement proved that $1.50 per gallon oil was unsustainable. Their collective lack of vision is what's costing their state jobs and tax revenue.
