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Oil prices, gas prices surging–who will be the next millionaire with alternative energy?

May 29, 2009
Modern wind energy plant in rural scenery.
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Oil and gas prices are surging again.  We went from $1.97/gallon to $2.50/gallon overnight here.  I know some of that stemmed from AAA’s report of more people traveling over the holiday weekend, but I think it also is a rather foolhardy move on the part of oil producers to try to retain some of their $147/barrel oil royalty.

I had predicted an oil bubble for a while, because Americans can’t, and apparently won’t pay $3.50/gallon for gas, even if it works that way in the UK.  But for oil and gas producers, I see another heavy fall coming.  Oil had topped out around $147/barrel and dropped to $35/barrel.  Now gas prices are going up just as 1 in 5 people around here are losing jobs and the auto industry is declaring bankruptcy.  I may not be an economist, but it doesn’t take that to ascertain that the demand for gas in the US won’t hit the same level that propelled wealth at $3-4 /gallon.

So, here’s my question:  With all this huge money going into energy, who will be the next millioniare?  All an energy producer would need to do would be to start tapping that market, because it’s a huge market.  How about solar panels?  I would manufacture those if I could.  (If any of you have good plans for that, let me know.)  I think that wind energy could be good, as long as it doesn’t kill migrating birds with the turbines.

But realistically, the oil baron days as we grew up with them may very well come to an end within the next 50 years.  Look at how Texas fared with oil and gas.  The boom and bust came too quickly for most of the crowd there.  Every single big industry has taken a tumble when it couldn’t diversify its markets:  whale oil, coal mining, steel industry, oil industry, real estate, automotive industry.  While I could go into all the reasons those companies failed, I can see ominous signs that the oil industry will go bust again here quickly.

In a global recession, it’s not a smart thing to do to raise the price of gas, because it just encourages the growth of competitive markets, especially when car dealerships are taking a hit.  (Car prices couldn’t have been sustained at that level with the crap that was coming out to the public anyway.  $50,000.00 for a vehicle that breaks down the next year would be laughable if so many people hadn’t lost their jobs on that crap shoot.)

Anyway, my Unasked Advice is:  OPEC beware–you are trying to push a recovery that isn’t here yet.  The US still has a long way to go….

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