cheap gas – The Burning Platform

Guest Post by Eric Peters

Expect gas prices to go up – a lot.

Soon.

Not because of dwindling supply. If anything, there is too much oil. From a certain perspective.

Whether oil is abiotic (produced by geothermal or other such processes rather than via the decay over time of organic matter) and so – heresy! – renewable or simply because it is now possible to get at oil located in places where it was formerly not accessible (or at least not economically accessible) the market is swimming in oil.

There are tankers full of it parked off the Texas coast, waiting to unload. The line is long because prices are low. And prices are low because supply is high.

Good, right?

Very bad.

Continue reading “Cheap Gas – Big Problem”

Guest Post by Eric Peters

Some happy news: Gas is officially cheaper than it’s ever been.

In my area – southwest Virginia – it is about $1.59 per gallon as of Feb. 7. Of this, about 60 cents (18.4 cents federal, 36 cents state) is taxes, so the actual gas costs about $1 right now. Back in 1967, the low water mark for cheap gas, it cost about 30 cents … in 1967 money.

That 30 cents – in 2016 money (inflation-adjusted) is $2.13. In other words, gas currently costs us about half what it cost back in ’67, almost 50 years ago.

It is the one necessity of life that – for now – costs less now than it used to.

But, it’s weird – like a 70 degree January afternoon up here in the hills of the Blue Ridge (we’ve had that, too).

Makes you wonder.

Is it a bad omen of not-so-happy things to come? Like the out-rushing tide, just before a tsunami arrives?

Continue reading “Cheap Gas… Big Problems”