Exploding Overseas Demand Ends Era of Cheap Oil
Sunday, May 1, 2005
When it comes to discussing gasoline prices, President Bush is a lot like the doctor who refuses to give a terminally ill patient the bad news. To wit: "The end is here."
Instead, like his reluctant counterpart in the medical profession, the president prefers speaking in euphemisms, offering palliatives, extending hope that the inevitable is somehow not so inevitable after all. The president did a lot of that Thursday night in his nationally televised address on his administration's Social Security and energy policies.
Inasmuch as I expect to be working until the day I die, I'll simply ignore, for the moment, anything the president or anyone else has to say about Social Security. But I care greatly about how my wages will be spent, especially in acquisition of fuel needed to do the work I love. And that is what bothers me about President Bush and numerous other politicians, Republicans and Democrats, on the matter of rising gasoline prices.
They just don't get it; or if they do get it, they are not at all willing to have a frank discussion of their understanding with the American people.
So, here's the deal, America: Your days of living with the developed world's cheapest gasoline prices are over. They probably never will return. The rest of the world is developing; and it needs fuel, too.
You want examples? By 2014, according to global auto industry estimates, North America will be the second-largest growing car market behind China. Europe will be a very distant also-ran. An estimated 57 percent of the global automotive market's growth will occur in the Asia-Pacific region alone between now and 2014, according to industry estimates.
That means people in China, Malaysia, India and Korea are beginning to drive; and that means they are driving from somewhere to somewhere -- to new housing developments and shopping centers in Shanghai, to new middle-class communities in India; and that all means new roads, buildings, more energy to build roads, buildings and transit systems. It means new industries in new factories producing more products for the new middle class to buy at new shopping centers with new parking lots.
Are you getting any of this?
"Even we know that the oil isn't going to last forever," said Bakur A. Azher, publisher and editor-in-chief of Azher Information Technology Group Ltd., a magazine and print holding company in the United Arab Emirates.
"We're preparing our economy for the day when oil will not be our main source of revenue," Azher said in a recent Shanghai discussion. "Look around you. Demand for oil is growing exponentially. It's not going to last forever," he said.
How does that square with President Bush's Thursday night pledge that his administration "is doing everything we can to make gasoline more affordable"? Exactly how does the president intend to do that? By holding hands with the crown prince of Saudi Arabia on the presidential ranch in Crawford, Tex.? By wringing his hands over suspect allegations that petroleum companies are gouging consumers at the pump?
"Here at home, we'll protect consumers," the president said. "There will be no price gouging at gas pumps in America." But, he said, "we must address the root causes that are driving up gas prices." That's interesting, inasmuch as the roots are global and are growing rapidly. You want another example?
Globally, there is a critical shortage of heavy-duty truck tires -- the kind that go on dump trucks and bulldozers -- because construction companies putting up skyscrapers and other buildings in China have overwhelmed the market with demand for those vehicles. Companies such as Volvo and Caterpillar, as a result, temporarily are delivering those trucks without tires, and then shipping the tires to customers as more tires become available.
It takes lots of petroleum to make those tires, each of which can weigh hundreds of pounds, and it takes lots of fuel to ship them and run the machines that use them.
The bottom line is that we are looking at a future of less oil and higher oil prices. That means more pain at the pump for everybody. It also means the federal government needs to get serious about exploring and developing alternative fuel sources; and it means some very spoiled Americans are going to have to grow up, shape up, and accept the reality that we can't use all of the gasoline we want without paying more for it -- one way or another.
And, no, Mr. President, it does not mean we are going to be able to drill our way to energy self-sufficiency by plundering the Arctic National Wildlife Refuge in America. That's the equivalent of offering an aspirin as a cure for cancer. It's "root causes" we are supposed to be concerned about, remember? Perhaps it's time to consider using another resource, and using it more wisely than the one we're about to exhaust.