Saturday, May 06, 2006

The whining begins in earnest

Is anyone besides me tired of all this bitching about the price of gasoline? Am I the only person on the planet that thinks that gasoline is a ridiculous bargain at 3.00/gallon? Consider the following:

Name another substance that can propel a 1 ton piece of steel down the highway at the speed of 60 mph for a mile for as little as $.06. I can guarantee you the $0.06 worth of food won’t move one person a mile down the road, much less a ton of people.

Or here is another analogy [stolen from The Oil Drum]. How much would you be willing to pay for a year’s worth of hard manual labor from 1 adult male in good shape? On one hand, the current market place suggests that in the US you would be unlikely to be able to buy this labor for less than $10,000 (assuming you were exploiting illegal immigrants) and probably not less than $25,000. However, if we remember our physics, we can estimate how much work can be done from the energy in a barrel of crude oil. Moreover, we can calculate that the energy in 1 barrel of oil has the capacity to be roughly translated into the equivalent of one year of hard manual labor. So since we know how much our society values a barrel of oil ($65 - $75), we now know that we have been drastically overpaying for a year of manual labor - either that or we have been drastically undervaluing crude oil.

The problem isn’t the price of oil. The problem is that we have built our whole society around the unsustainable premise of having ridiculously cheap oil forever. Up until now the price of oil has been based upon the cost to find it, get it out of the ground, and deliver it to consumers. However, it’s no longer a buyer’s market. The watch phrase now is “what the market will bear”. And we know that “addicts” will bear quite a burden to satisfy their craving.

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