A gaze into the (energy) future

As I write this post, in advance, on Christmas Eve, for publication on the day after Christmas, it will be interesting to see if anything has changed to negate the timeliness of the comments I am making about what I am thinking.

I wrote a blog some time ago about the dropping gasoline prices, and how the factors causing them to drop might not be ones that we should cheer about. Weak economic conditions in Europe, and the need of OPEC nations for cash continuing to pump gas when the actual strategy of the cartel should be to decrease the supply.

Since that time prices have continued to drop. Down slowly, up a few quickly, down further, back up a bit. And then it turned into a complete route — down with no ups — including a 20-cent drop in one day.

Since my original blog I have read other stories that suggested more positive possibilities for the drop. Amazingly, the US actually produces and exports more energy now that it imports. Rising prices made exploration for energy more profitable, profitable enough to explore for despite governmental regulations and roadblocks.  Free enterprise, the markets themselves sought and found a way around the blockages. It takes serious regulation and interference by government, true central planning (read sabotage) to stop the markets from doing what they intend.

By this scenario OPEC is now in a catch 22. The only way to compete against this new energy is to lower prices. Lower prices make that energy unprofitable, and turn people back to their production. Raise prices and they encourage more competition. Lower prices and they fail to raise the cash they need to keep their tyrannical regimes in power.

As I write this, before Christmas, the price of gas in $1.94 here in Kansas City.  How much further down will it go? How much further down can we take it before this “positive” sign creates other unanticipated consequences? Or by the time this comes out will there have been a serious rebound that wipes all this musing out?

One thing is for certain: definitive prognostication is a false confidence. Anything said in a fatalistic attitude, either positive or negative, is a resignation of our ability to choose and act. Dependence on government or dependence upon fate are the same fatal flaw.

If anything, the series of events that led to gas prices tumbling show that all the models in the world cannot stand up to the deliberate actions of millions of individuals. We can try to group people into classes to make them easier to understand, but the outliers will always and ultimately lay waste to the best-researched models. Those same outliers are also the ones who forge the future — the future we could never have imagined because we have never seen its brightness before.


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