Prognostication via memory

A few predictions…

Gasoline prices will drop after August. By the middle of September they should be down 25 to 50 cents and by the middle of February of next year it will have dropped another 25 to 35 cents per gallon. Here in East Texas I am looking for it to be in the $3.75 range then falling back to about $3.50 or maybe a little less next year.

A lot of what we are seeing right now I have been predicting for 3 years. ANYTIME you have an incumbent Republican President, you can expect a recession in the year of the election. The Democrats and the liberal media will see to it. If you will just keep telling everyone over and over that we are having a recession, they will get nervous and stop spending money. If all you see or hear on the TV and Radio is doom and gloom you will eventually be overcome by it.

The price of gas right now is an artificial situation and has nothing to do with the supply or really totally with the demand. When a government tells the world that we are too good to soil our hands with nasty ole oil wells, you can bet that the nations that produce the oil in our place will stick it to us. This isn’t the first time we have done this and we are so stupid that it will most likely not be the last. Jimmy Carter ran his campaign on a “The sky is falling and there won’t be a drop of oil left by 2000!!!” platform in 1977. The price of gas soared and we even had rationing. I worked in the oil industry at the time and by 1982 you couldn’t give oil away. Oil prices dropped to almost nothing and nearly every place that I had ever worked went out of business because of the oil GLUT that followed. The year 2000 came and there is still plenty of oil…IF we will get off our butts and drill for it! Once the elections are past things will go back to a more normal business as usual sort of status.

If we reduce our usage, as we are doing… If we let it be known that we are going back into production and start tapping the near limitless resources that are in our offshore reserves and in Alaska… If we start seriously looking into alternative fuels…The Arabs will panic and cut their prices to keep this from happening. You have to understand, oil is ALL they have. If the demand falls they will go back to starving to death. What we need to do is NOT do as we did in 1982. We NEED desperately to find alternatives for burning oil and we need to become more self sufficient in fuels. I hope, but don't expect, that this time we will continue to pursue alternatives even after OPEC drops the prices.

Another thing that is going to bring down the prices in the short term is that right now China is buying oil at an unprecedented rate. First the earthquake disaster has increased their demand for diesel by almost 20%. Trucks and bulldozers are guzzlers and they are rebuilding and cleaning up as fast as they can. They are doing this in part so everything will be perfect for the Olympics. They have also increased their reserves by 25% to insure that there will be no shortages during the Olympics. Once the Olympics are going and then done their demand will fall drastically.

I was raised in an oil patch. We had oil wells on the school grounds and in the subdivisions and my Deer Lease was an oil field. Everybody’s Dad worked in the oil industry when I was growing up and nearly every job that I had until 1982 was oil related. A refinery has only one speed…on or off!!! When you needed to work on a unit you went into “shutdown” and everyone worked 12/7 until it was up and running again. While it was down every valve and every heat exchanger, every pipe and tube was checked and rebuilt if it wasn’t in near perfect shape because you can’t just shut a unit down for a “quick” fix. You can’t run a cracking unit at half speed. You can’t leave a unit down for long. Oil comes in one end and the various products come out the other and go into storage tanks until it is sold. When the storage tanks get full you either sell it or burn it!!! This summer people didn’t travel like they normally do and the tanks are still pretty full. Winter is coming…Where do they put the home heating fuel that they are going to need to make if the tanks are full of gasoline?? In 1977 the problem where I live wasn't that there wasn't any oil, it was WHERE TO STORE IT ALL. They parked tankers in port, FULL OF OIL, just because there wasn't any place to put if if it came ashore!!!! The domes were bulging in the tank farms and I know of one place where they were actually pumping oil back into the ground.

All this adds up to almost EXACTLY the same situation that we were lied to about in 1977. Ford was the incumbent Republican President then. Once again the Democratic cry is the same…THE SKY IS FALLING!!!!!!!