The market determines what companies produce to meet the demand of consumers. This rule applies from video games to illegal narcotics. If there is enough demand someone will probably attempt to supply it. For future generations $100 oil may be exactly what we need.

Develop renewable energy

Until the recent high oil prices alternate energy sources and their development were considered financially unfeasible. Now we are seeing renewed interest in alternates such as wind and solar. For example in an earlier post I recommended purchasing First Solar. First Solar is a profitable maker of solar panels and is

We are seeing green campaigns and a renewed interest in recycling. We are also seeing some of the very big automakers that oppose changes now embracing hybrids. Toyota has gone through several generations of their hybrid platform, improving it with each revision. It takes time and with high oil prices companies can get the time to develop and REFINE their products. Sometimes it takes time and $100 oil maybe the right time for these companies and technologies to flourish.

Encourage energy efficiency

In addition high-oil prices make people change their behavior. Most people need a push before they change their consumption habits. This is perhaps equally important as developing other energy sources. The U.S. SUV infatuation is starting to wane as fuel prices take up larger portions of the household income. It is estimated that if vehicles in the U.S. were as efficient as those in Europe, oil consumption would fall by as much as 3 million barrels a day (roughly 4% of world demand).

Eliminate Wasteful Symbols of Excess

The super oil profits have manifested itself in the form of an unprecedented building boom in the Middle East. From artificial islands to crazy skyscrapers, symbols of petrodollar wealth is going up left and right in the Middle East. This is not the most efficient use of resources.

Stop Killing the Earth, and Me

Polluting the air, changing the environment, and killing people. These are the externalities of big oil. It is no coincidence that the occurrence of cancer is high in areas where there are oil refineries. That is why one of the most reknown Cancer Centers – M.D. Anderson is based out of Houston, TX, a big oil city.

The Petrodollars make for bad public policy

The unfortunate problem with oil is how profitable it is. In the near term, politicians get lobbied by oil interests such as refiners, oil drillers, oil services, and even the car companies keeping fuel efficiency standards down for cars and pushing generally bad energy policy. Take a look at our CAFE requirements set by the U.S. Government. Though auto and materials technology has improved, our CAFE standards have barely budged.

I recently came across a campaign to get 35mpg by 2020. In other words an improvement of about 5mpg over 13yrs. That’s just ridiculous. My next car will get 37mpg mixed and it is not even a hybrid. Why can’t the U.S. up their requirements sooner?

Petro Dollars. When you got em, you love em. When you don’t? Well just suck my exhaust sucker.

Update [12-2-2007] :  Looks like Congress has come to an agreement 35mpg by 2020 is what it will be.  Weak, but like I said I think the auto industry knows it is very easy to do and so they just fight it so Congress feels they did something substantial.   Pathetic.

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Yet another reason Iran is evil – They pay only 33cents/gallon at the pump. I guess Toyota won’t be selling many Priuses there.

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Yeah they have to pay. We should send some aircraft carriers and oil tankers there right away.

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“French government has finally confirmed that in exchange for a sum said to be $800 million to $1 billion, it will rent the name, art treasures and expertise of the Louvre to a new museum to be built in Abu Dhabi, the capital of the United Arab Emirates.”

Wow… Petro dollars at work.

Full article here.

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Wondering where your petro dollars go. Take a look.

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