Archives: oil

I’m not one to get on my soapbox to blog politics or the like, but I heard something today that really made me sit back and think about the state of this great nation, and how far down the tubes its been sent in the past 8 years.

What got me was an interview on the APM/NPR show Marketplace about the price of oil/gas and what could be done to deflate the oil bubble. Now I’m not one to believe everything I hear and/or read, but in this interview, Michael Greenberger from the University of Maryland Law School, basically stated that we’re still paying for Enron and commodity speculators:

Kai Ryssdal: You’re not really telling me that seven years on, we’re still paying the price for Enron, are you?

Michael Greenberger: Well, this has been called the “Enron Loophole” and there are many legislators working very hard to close that loophole. There is tremendous concern about this on Capitol Hill and on a bipartisan basis, people are drafting legislation to try and get a handle on this and not eliminate speculation, but bring the speculation under the kind of time-tested controls that were used until Enron had its way and amended the law to escape traditional tested regulation on speculative activities.

Greenberger went on to say that he thought that we were in a “bubble” situation with the oil market because of these speculators driving up prices. And with every bubble, there is a POP. So the next question is inevitable:

Ryssdal: How long is it going to take then if we are, as you say, in a bubble, for it to work its way through and us to get back to something more realistic for the price of a barrel of oil, whether its 50 bucks or 80 bucks?

Greenberger: From my own experience as a commodity regulator, I believe that if the Bush Administration were serious about its regulation, we could begin seeing prices drop within a month. If we don’t get the kind of regulation that has been done for decades and the market proceeds along the pace its proceeding, we will have to go through a very, very serious recession. The question is do you want to deflate the bubble by that kind of suffering or do you want to deflate the bubble by applying tight U.S. regulatory controls?

A month…it would take a flippin’ month to bring this back to some level of relative sanity. Do I fully buy that estimate? Not really. But the point is that if the administration had a clue, they could do what is needed quickly to bring prices back to some level of normalcy in fairly short order and turn this around before things get in really serious, serious trouble. If anything, the silver lining is that the country is now being forced to think about alternate energy sources.

Is it November yet?

I step off my soapbox and will get back to more entertaining posts.