…Riiiight, that clears up a lot??? The monumental complexity of the current financial system has thrust itself upon the country, delivering blow after blow as banks plummet into failure. So what are we to take from this, those of us who have no idea what the derivative market is, and don’t have millions invested?

So, simply put, a CDS is an insurance on (bad) investments – they pay in the event of a default on a debt or loan (credit event). This CDS market is not visible to the public, has no “real value”, and is largely untracked. The estimated value of all outstandnig CDS’s is to the tune of $60 trillion. Perhaps most important; they are not guaranteed. That means that every party trading CDS’s is essentially married to every other in an uncomprehensibly complicated web of trades.

American Investment Group’s (AIG) CDS portfolio is estimated at $400 billion – estimated because there is no clear market value. Also unclear is who exactly is tied to this portfolio; corporations, banks, hedge funds, even sovereign wealth funds, and many more. That is what they mean when they say, “shockwaves throughout the financial system”. When one of these players defaults big time, everyone is at risk.

What caused the meltdown? AIG basically has a credit rating. When their credit rating falls, they have to put up more money – kind of like a down payment on a loan. When AIG started going bad on some of its CDS’s, undoubtedly due to the “shockwaves” from the likes of Lehman Brothers, there credit rating dropped. This is where the $85 billion dollar credit line came from. AIG had to come up with around $80 billion to avoid going under – so, despite claimes to the contrary, the Fed provided the funds in an attempt to contain the meltdown.

Finally, what does this mean for you and me? Why does this matter at all? Shouldn’t these greedy companies be allowed to fail? Unfortunately, due to grossly unregulated financial markets, that would drag the rest of the system, indeed the whole country or world, into serious depression. Make no mistake, this is the worst state of the global economy since the 1930′s. In the near term, it means that lenders are less inclined to loan money, as the current climate necessarily means greater risk. Small business loans, car loans, school loans, everything.

Consider this; you got a loan for, say, $25 grand two months ago to rent shop space and renovate it to start a bakery. You’ve done all the decorating and preparing, now you need a business loan to buy all of the equipment and to start paying employees. No, you don’t have $15 grand to put down, no you don’t have great credit, or much credit at all – but 2 months ago the bank assured you it would be no problem. Now, given the economic climate, your loan just seems way to risky. So you are stuck with an empty shop space and $25 grand in debt. Now you default on that original loan, furthering the crisis.

So what is next? The government will be executing a massive, massive buyout to rescue the economy. I hate to say it, but it is a good thing. Well, it is the only thing really. The question remaining is whether or not they are going to do it well. $300 rebate checks just ain’t gonna cut it. Treasury, Fed, and politicians are working feverishly to find a solution – not very reassuring. My biggest hope is that this stimulus will reach the hands of the innocent. While it is imperative that banks stay afloat, the likes of AIG CEO Robert Willumstad – expected to receive a smooth $7 million payout for his 3 months at AIG, during which the company’s worth fell 97% – clearly deserve no tax dollars. My fear is that the massive buyout will be along the lines of the various and sundry (failed) attempts to save the economy, this time at a risk far to high to fail.

Among these facets is the very concept of identity. As the institutions upon which we rely for definition of self are compromised we react with varying, often monumental degrees of protest, reverting to smaller levels of identity or lashing out along the lines of that conceptual self. Unfortunately such action is perpetually marginalizing to involved groups rather than attacking the source of their fragmentation. The cycle commences, the sources of fragmentation divide, and let those divisions conquer themselves. Political behavior is increasingly being exercised along the lines of identity, to the detriment of disillusioned movements.

I have considerable difficulty reconciling my opposition to the homogenization of culture with my belief in the urgency to abandon movement, be it social, political, or otherwise, on the basis of difference in identity. But these views can be reconciled, and I seek to define their difference, realizing their relevance to the current nature of political thought. Culture may be the vital solution, transcending identity based upon difference. Culture is a unique identifier in the very absence of biological exclusivity. Culture may similarly be based on social constructs but defines itself on definable and livable lines, rather than wholly societal, and scientifically dis-proven ones. This concept is easily contested, but equally defendable. A likely argument lies on the foundation that culture be defined by its leaders; more specifically, by the physical or biological properties of its representatives and their power to assert them.

Cultures, and their respective value cores, are being absolutely compromised and endangered by the encroaching monolith of globalization. This places culture in an inimitable position – potentially catastrophic or opportune alike. Whether we base further movement on these lines will determine the fate. If we can respect these concentrations of centuries of experience, wisdom, and intellect as different but not necessarily in disagreement, if we can realize the cross-cutting reality of cultures existence and redefine our idea of self not as a single entity but a combination of loosely connected pieces, we might save it from the common fate of self-identifiers.

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We are always drawn to ponder circumstances that differ from our present situation.  It is somehow fundamental, in this historical moment, to imagine other existences, to wonder how the world–or one’s own life–might have been different, or might someday be.  Sometimes the thought even reveals its meta-imaginary character:  it comes as the blatant realization of a new a priori, that what is was never meant to be, it only just happens to be.  Only upon reflection does it appear that the universe has a “plan” for any of us; this idea is imposed on our perception of “the future” only after it has had its historical genesis in the minds of humans, not the other way around.  Freed of this basic constraint upon imagination–namely, the tendency to fail to imagine the world differently–we arrive at what philosophers call arbitrariness, which is at the heart of all fiction in that it allows the mind to identify, reduce and manipulate basic components of everyday-reality-as-perceived-by-human-beings.  Civilization itself, in all of its constituent dimensions–material, infrastructural, political, relational, mythological–is free to be designed from the ground up (or the top down, or both, or in some other possible manner of architecture).  Once mind has the building blocks of the world at its creative disposal, imagination comes to be defined by its pregnancy with other, possible, worlds.  This is why, for example, so much of (what I’d call) the truly exciting philosophical thinking of the twentieth century occurred in the primarily “literary” genre of science fiction.

But I digress…

Matthew describes the house well.  If there are two things we never lack at Sugar Grove, they are 1) places to sleep, and 2) messes to remind us of who has recently slept there.  The last six months can be mapped in reverse by noting the presence or absence and the relative location of certain objects:  blankets, pillows, futons, couches, clothing, dishes, chairs, tables, tools, sizable outdoor structures.  Our transience is writ quite large upon the whole scene, really.  The house is littered with other people’s stuff.

Random tokens continuously evoke their owner’s presence in a crowded sort of way.  Some people think of ghosts as a kind of memory, but a memory held by the material, physical reality of a certain space.  Our rooms are like that–containers of space-time within which the events that transpired between their walls still exist, playing out in subfolds of our universe, or in imperceptible dimensions, or in some such real yet distant place.  The past is always with you here because it was just like the present, and because the future will soon be the same way as the past is now, which is…there, but transient.  Present, but fleeting, but present.  In this house, everything seems to happen once–and again and again forever as a result.

It is true; the effect can be dizzying.

It is also true that this frenzied, madness-fueled existence is enormously appealing to me at this point in my life.  There are all sorts of reasons for this; it’s just so god-damned much fun, for one thing.  But it also seems befitting of this time and place, of these people.  I am in between so many things…so, so many things.  I would say this house is what I’m doing in the meantime, but the meantime is all I really have at the moment.  I am simply in the meantime.

The trouble is, the life I currently lead can be made to appear alternately heroic or tragic, bohemian or disappointing, poetic or pitiful.  It all depends on what your ethos happens to be on any given day. Are you in a fuck-all, nihilistic hedonism kind of mood?  What great souls, then, have you stumbled upon!  (The secret to the revolution was always sex, drugs, and rock n’ roll, anyway.)  If, on the other hand, you’re in a nose-to-the-grindstone, deep-focus, get shit done kind of mood, then I regret to inform you that no great plans are currently being hatched at headquarters; the would-be leaders are on an extended vacation.  Work will resume when the hangovers subside.

That should be about four months from now, when the Great Move to Asheville finally happens.  That is when I have chosen to resume trying hard at life.  In the meantime, I work, I read, I party, I lie around and do nothing.  This house does not inspire me to do otherwise; this house is a bass drum.  It is life, day in and day out.  Wake, eat, work, sleep.  Who comes and goes?  Many, many.  And they are all loved when they are here, just as they are loved when they are not.  But it is difficult for the old adage, “out of sight, out of mind” not to ring true in this context.

I think that’s perfectly fine.  I don’t often wonder about how things might have gone differently (if I’d chosen to leave Boone a year ago, for instance) because I have a good idea of what’s coming in the next phase of my life. I was talking with a friend the other day about commitment and I was reminded of these thoughts.  He asked if I saw myself as the kind of person who has a problem committing to things, or to people.  He said he thought that I was.  I can see that being both true and false.  It is absolutely true that I am not the kind of person who seeks exotic adventure for the sake of the thrill, and in that sense I am most at home simply being at home.  I like roots.  On the other hand, the things to which I’ve really, truly committed myself in the past–relationships, long-term projects or goals, ideas and ideals I’ve tried to embody or enact in the world around me–have received my full attention and all of my energy, when I’ve been in the position to knowingly, calculatingly devote myself to them.

I rationalize not engaging in the what-if game by telling myself that nothing I haven’t done yet is impossible for me to do later.  The corollary to that sentiment is this notion I have of waiting for the “right time” to do a certain thing.  This is a sad way to live, on one account, and I recognize the validity of the criticisms that friends have often made of it.  But I never sit around and do nothing; I have yet to travel outside of the country, for instance, but I have road-tripped my way around the U.S. many times and have had a hell of a time doing it, amassing a very respectable cache of experience(s) in the process.  When I have the resources and the window of opportunity, I’ll get the fuck out of here and see what I know I need to see elsewhere on the planet.  I’ll have a purpose in mind and I’ll make the most of it.  I don’t want to “just go,” much as I’ve been told–almost ordered, at times–to do so.

Even now, as I’m sitting around doing nothing, I am not sitting around doing nothing.  I am continuing to build relationships where my roots already lie.  I am making my peace with my time here and saying a long goodbye to this phase of my life.  It’s hard to describe how I feel about this place…there is no way to articulate the degree to which I love it here, no hope of communicating how important Boone has been in the development of the person I am right now.  I am allowing myself to settle by living to the steady beat of a bass drum.  Before they go into the studio to record a certain song, some drummers will sleep with a metronome clicking away in their ear in hopes that they will go into the next day’s session with the song’s tempo literally burned into their brain.  I’d like to think that what I’m doing right now, in my life, has something of the same degree of intentionality.

I would also like to say that we have responsibly embraced our transience here, and I think that’s true.  We have developed the capacity for meaningfulness and elasticity alike to characterize our relationships to significant others of every sort.  This has been a lesson in and of itself.  I should hope that it proves a fruitful endeavor in the long run.  I believe that it will.  But, like Matt says, the dust never settles, and only time will tell.

I’ll admit, it didn’t hit me right away; but by the time I got to the door, I was laughing so hard I had to hold on to the wall for support.  Fiction…1984…oh, Cosmo, you kill me!

At this point, I must offer a confession, and ask that the high priests of political philosophy and liberalism forgive me my transgression:  truth be told, I’ve never read 1984 cover-to-cover.  I started to read it for a U.S. History project in 11th grade, but the availability of information about the book overwhelmed whatever sense of duty I felt toward either my teacher or my education, and I Sparks-Note-d my way through an easy two page plot summary without much of a second thought.

I half-swore to myself to read the book later on, perhaps in college (where, I’d gathered, people would be talking about it).  As it’s turned out, the world has filled me in on most of the story and the concepts Orwell used to make it tick.  I know about Newspeak, thoughtcrime, doublethink, etc.  But I’ve yet to see them in action, in the book itself.

So, here’s my idea:  I’m going to read 1984 and blog my reactions as I go.  Since I’m also an election junkie, I’ll pay special attention to the ways in which the book can be used to make sense of how today’s campaigns alternately employ and attempt to counteract one another’s use of the political, ideological, and (dare I say?) epistemological tools that govern Orwell’s classic, dystopian vision of the world to come.

My sense is that this should be both valuable and a hell of a lot of fun.  Let’s see how it goes.

Some recent research, summarized here, calls into question the extent to which higher prices, reflecting “real” costs, alter the behavior of consumers. An often-missed aspect is the fact that a considerable amount of driving is to-and-from work. This does not change the fact that commuting tens of miles to work suggests the need to reassess your living / work location(s). Nor does it justify the number of SUV’s or other inefficient vehicles, especially in the US. But it does bring up a real obstacle in the way of reducing dependence on driving, and ultimately on fuel. There remain few alternatives for most Americans to driving to work.

And as the non-reaction to higher fuel costs in the study are in European locations, it is hard to extract trends applicable to the comparatively-dismal state of sustainable transportation in the US. That is, for example, places like England boast twice the average MPG than the US. Alternatives such as hybrids are widely used and “conventional” vehicles are often subjected to taxes in metropolitan areas. Therefore, the capacity to “react” to higher prices is relatively lower than that of the US.

But the fact remains, vast rural areas, non bike/pedestrian-friendly cities, little public transportation infrastructure, and the lack of a real alternative vehicle fleet make it more difficult for Americans to curb old habits. Unfortunately, this is inherently speculative in nature, as gas prices are being artifically lowered and the current political campaign is flooding media outlets with misinformation on the state of oil geopolitics. The available avenues – vehicle purchases, use of public transit, and other measures – are showing measurable changes, but full reaction to high fuel prices are yet to be realized, pending (unlikely) equilibration of gas prices.

If change didn’t occur, a flower would be but a seed in the ground waiting to bloom. Change is a new beginning…

I recently stayed in a condo at a monstrosity of a golfing community on the South end of NC’s coast. St. James plantation is its own town, incorporated in 1999. After passing the security gate I spotted the sign containing the message above. The irony struck me – as though changing 4,000 acres of woods and wetlands in this fashion enabled any seed to realize their flowering potential. Aside from that confusing message, the development doesn’t claim to shepherd the land in any noticeable way. Newly constructed homes of predictable style litter the landscape. Young pines shoot straight up like the long skinny needles they deposit on the ground – the pines are perhaps the sole floral beneficiaries of clear-cutting. The grass lawns are soaking wet, certainly not from rain; the drought remains treacherous. The water pumps up from underground irrigation systems, spewing out onto the driveways and roads. I was surprised by the absence of wildlife. The chemical-treated lawns undoubtedly detract the squirrels and birds, but the absence even of mosquitoes in the humid August air was a bit eerie. Golf courses are well-known to be some of the worst soil and water contaminants; I suppose if I golfed I’d have noticed its bug-zapping qualities previously. The geographical location of this development, directly along North Carolina’s intra-coastal waterway, is a bit worrisome.

Beyond the environmentally-devastating effects, the self-perpetuating social atmosphere is further troubling.  Some would applaud this bit – containing the super-conservative super-wealthy behind gates, limiting their interaction with the outside world. These golf-playing, Lexus-driving martini-sippers are free to discuss their $30,000 membership dues or $50,000 boat slips or…whatever… without bothering anyone. This view is held by many of my more-radical acquaintances, and I sometimes find myself agreeing. But upon further contemplation I have to disagree. It can’t be healthy for these people to think that their “quality” of life is normal. I imagine the children growing up there, attending schools exclusively populated by citizens of St. James. This flawless upbringing would undoubtedly give rise to proteges of the uber-rich, unaware of the realities of the other 99% of the world and thus unprepared to deal with it.

This troubles me greatly – what will these kids be like? What does this mean at the macro level? Will America become increasingly socioeconomically stratified to such an extent that each extreme is all but unaware of the other?

Just as the ridiculously affluent must be aware of the abjectly poor to understand the extent of their fortune - like the fact that their membership dues to the country club exceed the average annual income in this country. Similarly, the impoverished must be exposed to the rich to develop ambitions to overcome these injustices. Don’t mistake this for an argument that the “poor” are somehow at fault, or in need of aspiring to affluence. Rather,  the visibility and acknowledgement of economic disparity is a vital component to social change. The greatest and most incremental progressions in human history have resulted from the tendency of the oppressed to rise against (perceived) injustices. Neither extremes are acceptable at current levels, and nor should they be segregated in ghettos and gated communities, respectively.

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A place designed to inhabit the land without inhibiting its true nature, revealing its wonder gradually, intentionally.

So reads the motto on the site of Briar Chapel, located west of Carrboro, just across the Chatham county line. Similar to its coastal counterpart, this town of a development spans thousands of acres – now clear cut to accommodate quick and predictable construction.  Unlike St. James, Briar Chapel (pro)claims to be “green”. Employing “green” builders and heralding fashionably environmental propaganda, Briar Chapel is clearly catering to the liberal affluence of the Chapel Hill area.

Recalling St. James’ welcoming message, I am struck by the contradiction. How, exactly, is the clear-cutting of countless acres — drastically and as quickly as possible it seems, paving and building — not inhibiting its “true nature”. Perhaps its true nature is a development, to be gradually and intentionally revealed via a massive-scale spec home project…  At any rate, they are constructing parks, schools (as per legal necessity), and leaving about 1000 acres of “natural” space. They claim to have an environmentally astounding stormwater management plan in place, high density housing, and sundry other environmental best practices. While I congratulate these efforts, I am a bit appalled at the inference that such construction, “…not only respects the land but creates a healthier environment for residents”. How have we come to allow, and indeed believe these messages portraying new home construction as the way to reduce our degradation of the natural environment?

I won’t dive too deep into my philosophy on the appropriate manner in which to develop, but suffice it to say the following: The point at which the reconstruction, renovation, or recycling of existing structures and their footprint, or the materials thereof is bypassed, the boundaries of green building have been irrevocably crossed. There is nothing green about clearing land. In fact, the environmental effects of building create an exponentially worsened atmosphere for the natural outplay of events (blatantly). At best, green building is better than constructing the mcmansions found in St. James-esque developments, but both must be categorized as some of the most destructve projects in the modern world of home construction.

It is dismally unfortunate that these well-intentioned volvo-driving, birkenstock wearings liberals are dupped into self-congratulation by these projects. Green has become one of the most lucrative endeavors; one of the deepest emerging markets across industries.

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Members of such self-decribed progressive neighborhoods as Briar Chapel are quick to criticize developments like St. James for their lack of energy star compliance, green space, etc. To some extent they are correct, the comparative energy-savings are probably considerable. The amount of chemicals leaching into the groundwater in Briar Chapel is probably dwarfed by the golf courses of St. James, and the use of natural, local foods at their restaurants is a great step. But how have these two types of developments come to be considered two ends of a spectrum? In reality, they are quite similar.

The folks in Briar Chapel, while perhaps slightly less-wealthy than the St. Jamesers, are probably not too far from that top income bracket. And while they may not have affected as many as a more urban gentrification project, the displacement of the previosu occupants of the land (farmers, undoubtedly) is mitigated little by the construction of green buildings…

The fact remains that the relative footprint of these developments is very similar. In both cases we’ve created enclaves of affluence displacing farmland and woods while countless homes sit for sale, manufacturing a growing surplus in the midst of a housing crisis.  I try to adhere to the “to each their own” mantra, but at some point it becomes maddening – green has outsmarted itself. Further, the economic disparity has full fledgedly contaminated the physical realm.

As I drive through downtown Carrboro, NC – close to my place of residence – a giant crater of a grading operation envelops about a square block.  A massive skyscraping crane stretches across the horizon, casting a skeletal shadow along a town now well-accustomed to the concept and practice of gentrification. To emerge from this barren hole will be multi-use complex. A shiny sign along the fenced perimeter reads, “Greenbridge”…

(that one’s an inside joke among Boonies.  bet you can get it too, though…)

…and perhaps my favorite…

I am currently visiting the place I recently called home. A sensory overload of mixed emotions; some thankfully forgotten, others regretfully abandoned – has me irrevocably stuck in my own head. I realize with rare clarity the extent to which I’ve allowed my reverence for here/now to become a fault – to reverse itself into something of a situational lapse.  I cannot visit without wondering what life would be, could be if I hadn’t left. Or if I returned as though nothing had changed, foolishly forgetting the roots presently establishing themselves in that chosen “elsewhere”.

The vast majority of my friends and acquaintances have gathered in a house long-established as a landmark gathering point. Adjacent to a sawmill and cow pasture, altitudinally below a horse pasture and in the heart of breathtaking Appalachia, this house of wood and stone encompasses much of what I love and despise there. Housing brilliant minds, unbound excitement and yet untold adventure. But also dreams lost, the basement a physical manifestation of its transience, a reminder of friends once had, projects abandoned, the wreckage of more dramatic fallings out. Piles of garbage represent past roommates, respectively – containing snippets of once-integral members of the group, remaining as a reminder that integrality is but an illusion. Constituency consists of existing members, pushing on with little regard for those past.

Some new drama has materialized since last I visited. Some new members have filled the gaps left by those of us who’ve gone AWOL. But fundamentally, for better or worse, it remains. New relationships have emerged, adding little to the group save a dizzying timeline of intimate associations amongst its members.

There are two extremes, not dichotomous, but easily organized as such. At one extreme is the complete resignation of ones’ mental capacity to the infinite “what-ifs”. On the other sits the state of total forfeit of ties to time or place. The latter amounts to traveling in the time and space immediately before oneself, the smallest and simplest conceptual “now” – around 3 seconds. Between the two exists the spectrum that is life. Each tiny point representing a unique, hierarchical aggregation of “now” and “later”.

More often do we eternally look to the future, allowing a list of “to-do’s” to remain indefinitely. That plane ticket that needs to be bought, that garden planted, those books read. “But what if I move?” “What about my job?” “What else could I, should I be doing?”  This is what I have historically plagued myself with. But here, now, I am struck with throbbing nostalgia thrust upon me by my very presence – (should I have stayed?). I’ve shifted closer to the other end of that spectrum. Only upon reflection do I recall the circumstances within which I exist, outside of this weekend that is.

It is increasingly easy for me to drop recollection of the intricacies of daily life here in the mountains, the more tedious or quotidian of tasks receding in favor of tranquil, peaceful moments cherished. I can grudgingly recall the undesirables, at times lending themselves to a vehement unwillingness to consider moving back; this ability to forever rationalize itself becoming somethign of a schizophrenic internal discourse. I too can similarly consider my ordinary life now – my physical and mental separation forgetting what it is I love and hate. For this moment, home has become a muddled memory, falling lower on the hierarchy of prudent thoughts.

They way in which we (subconsciously) choose to approach and react to life certainly cannot be deciphered in full by the simple spectrum and hierarchy described. But in some way, they are helpful in realizing a hint of pattern in more emotional moments.

As the August sun falls beneath those Blue Ridge mountains, the crisp air makes it hard to rationalize ever leaving. But the dust never settles…

Environmental Leader Article

Consumption: First Half 2008 – these are Barrel Per Day (BPD) as compared to year-earlier levels

• Global: Up 500,000 BPD
• Non OECD: Up 1.3 million BPD
• USA: Down 800,000 BPD – largest drop in 28 years…

Prediction: Up 1 Million BPD in second half of 08 and up almost 1 Million BPD in 09

Interestingly, despite the relatively drastic decline in US demand, increased demand elsewhere overshadows.

Supply: BPD compared to year-earlier

Non-OPEC:

• First half of 08: Down 330,000 BPD
• second half 08: Up 510,000 BPD
• 09: Up 850,000 BPD

This growth mainly from  Azerbaijan, Brazil, USA

OPEC: set to peak in Quarter 3 of 2008

• Q3 08: 32.9 million BPD
• Q4 08: 32.4 million BPD
• 09: 31.6 million BPD

Now for some interesting USA stuff: note: lower 48 production increase is to more than offset Alaskan declines…

Production / Supply:

• 07: 5.10 million BPD Average
• 08: 5.15 million BPD Average
• 09 Prediction: 5.36 million BPD Average

Ethanol:

• 07: 430,000 BPD
• 08: 590,000 BPD
• 09 Projection: 650,000 BPD

Crude Oil Imports 2008: Down by 240,000 BPD

Petroleum Product Imports 2008: Down by 400,000

Crude Oil Prices:

• 07 Avg: $72
• 08 Projected Avg: $119
• 09 Projected Avg: $124

Gasoline Prices: 1 gallon of regular unleaded

• 07 Avg: $2.81
• 08 Projected Avg: $3.65
• 09 Projected Avg: $3.82

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So those are the numbers, and the predictions / projections take into consideration a number of potentially impacting factors.. CAUTION: OPINIONS EMBEDDED BELOW, END QUANTIFIED DATA ZONE…

There is plenty of debate right now on what would cause gas/oil prices to shift, as I posted before. Here is a more specific overview:

The price of oil would likely be less than aforementioned projected levels if:

• The economic downturn is more dismal than expected (demand would decrease)
• Higher commodity prices (including gas) (demand would decrease further)

The price would likely increase over projected levels  if:

• Negative events in volatile, oil rich regions: ex. Iraq, Iran, Venezuela, Nigeria, etc. (decreased supply)
• OPEC intentionally keeps supplies tight
• consumption exceeds current speculation
• oil expansion does not meet projected levels of productivity
• hurricanes

The short answer is: Yes, speculators are investing based on the assumption that oil prices will increase in coming years. Yes, global demand is growing quickly. Yes, net global supply is diminishing.

This information speaks to numerous debates, but the offshore drilling is the one that really gets me. Regardless of the fact that those extra barrels wouldn’t hit the market for years, what would the impact be? We produce so little of the worlds oil, and consume so much – the miniscule contribution of some offshore drills would be a drop in the bucket…

US: Crude Oil Production:

• 07: 5.10 million BPD
• 08: 5.15 million BPD (Projection)
• 09: 5.36 million BPD (Projection)

US Petroleum Consumption

• 07: 20.68 million BPD
• 08: 20.20 million BPD (Projection)
• 09: 20.8 million BPD (Projection)

Offshore drilling, by government estimates, is predicted to realize around 1 million BPD’s. That is, 1 million barrels of oil per day of the world’s 73 Billion BPD’s…  Those in favor of offshore drilling, as you know, suggest that it would provide short term, real relief to Americans at the pump. This despite government predictions that such a project would amount to a savings of about 2 or 3 cents – eventually. Unfortunately, McCain is gaining traction with this argument, and democrats are following that lead as Americans have overwhelmingly responded in favor of offshore drilling.

Supporters in the industry claim that estimates seem very conservative, arguing that actual amounts could be far and away greater than expected. I can’t argue with this as I have no idea.

Another argument is that any bit counts, even 1 million BPD’s – they follow with the whole new jobs, less foreign oil bit. Now they could easily create new jobs in renewables and reduce dependence on foreign blah blah.

I’ll agree with this – in 5 years, or ten years, or twenty years or whenever WE ARE GOING TO STILL BE DEPENDENT ON OIL… So I can almost agree with the stance taken by many, that is – let’s do everything including offshore drilling, alternatives, etc. But if we can do more of one thing because it will create greater measurable difference, than why would we do both?