Rebel forces are battling the Qaddafi regime for control of Brega, a key oil installation. The Libyan dictator vows to “fight until the last man and woman.” Worldwide oil prices are shooting up, causing the markets to become jittery. An American energy industry which has been profoundly sabotaged by the current Administration is not ready to make up for any shortfalls.
Writing at the Politico, Steve Forbes adds up the damage:
“The Interior Department’s six-month moratorium on offshore oil production has cost 8,169 jobs, according to a study by one Louisiana State University professor, along with more than $487 million in wages and nearly $98 million in forfeited state tax revenues in the Gulf states alone…
“After the [Obama’s offshore drilling moratorium] was nominally lifted last fall, the blow dealt by Interior’s subsequent permit freeze has been devastating. Not a single deepwater drilling permit has been issued since last year’s tragic oil spill. Unfortunately, there’s no relief in sight, given Salazar’s recent admission that he has no intention of issuing any drilling leases this year.”
Rising oil and gas prices are one of the great under-reported stories of the Obama years, for obvious reasons. Liberal reporters are not interested in camping out at gas pumps and collecting angry sound bites, as they did under President George Bush. The official media Narrative is of a wise and sophisticated President leading a slowly awakening people to the promised land of “green energy,” not an incompetent ideologue destroying the economy.
High prices at the pump are only the beginning of what lies in store for us. People have been so conditioned to hate fossil fuels, and the companies which provide them, that they don’t grasp the true significance of relatively inexpensive energy. Time is money, and oil is time.
Until an equally powerful and convenient energy source is perfected, decades from now, oil represents the freedom to move quickly over long distances, on very short notice. This has obvious implications for the shipment of goods, especially those which are perishable. If you’re gritting your teeth at the thought of four-dollar gas, just wait until you’re paying for seven-dollar milk.
The economic damage will go far beyond a spike in the price of virtually everything that requires energy to produce or ship. Within a relatively narrow range, getting “gouged at the pump” is an annoyance. Gas is a necessary expense, which no one is eager to purchase. You desperately need it, but purchasing it doesn’t strike most people as a fun shopping excursion. Somewhat like health care expenses, it’s a burden you want to get out of the way, without dwelling on it.
When gas prices increase dramatically, they will begin changing the way people live and work. (The hard Left has always known this, which is why leftist ideologues – most definitely including Barack Obama – have previously seen high gas prices as a desirable virtue, to rein in our independent, planet-destroying ways.) Here’s one of the first things that will happen: people will stop driving around to find the best prices on things they want to purchase. The closest store will become the preferred store. This will cause significant damage to the business model of retailers that thrive on the willingness of customers to go a little further for a bargain. Much of this effect will be psychological – it might still make sense to drive five extra miles for a big discount, but customers won’t do it.
Entertainment vendors, including movies and restaurants, will also be hit hard. They rely on a large population of casual customers who want to get out of the house, and enjoy spending some disposable income. When the psychology of travel enters the “Is This Trip Really Necessary?” stage seen during the gas rationing of World War II, they will become far less willing to make these pleasure excursions, especially on a whim.
Limited mobility will eventually affect work habits, too. Unemployment is bad enough as it is, and we have the most mobile workforce in human history.
Wealth is a function of choice. Easy, convenient travel provides us with more choices for spending our money, which increases our wealth. As the price of oil begins to approach the value of time saved by convenient rapid transportation, our choices will become more limited. The economic value of a day is far greater for us than it was for our great-grandparents, because we can move around much more quickly than they could, at very modest cost. That advantage diminishes when it costs twice as much to fill your pump, or you’ve got to spend hours charging an electric car before you can slowly drive anywhere.
When gasoline is no longer affordable, people on the lower end of the income ladder will begin paying with their time instead, and become poorer for it.
Sign up to the Human Events newsletter