Demand, in one of the worst economic periods of history, has not dropped the price of oil that much. Sure it’s down from the $140/barrel nosebleed level of the 2007 market, but, it’s likely heading back there as a stopping point higher.

The reason being that once-upon-a-time, America entering an economic downturn would have dropped the price into almost single digits. America accounted for that much useage. Not anymore. Now, America while certainly still the primary consumer, has significant competition.

Thus, the price of oil is going far higher, until, pretty much extinction. What energy source can replace oil? Warren Buffett has bet on coal via the railroads. Check out the rail infrastructure around the West Coast, the major import ports from Asia.

What else is there that can replace oil? The obvious candidate is Natural Gas. Cleaner than Coal, the infra-structure already largely exists, and I believe it produces as much, or more energy than coal. The US has ample reserves, as it does of coal. Thus industrial [electricity] supply should be ok [just as well, nuclear, is not really a solution now due to timeframes]

Transport for the general population however remains a major problem. The electric car really needs to progress to the point where it can be mass produced, the battery issue resolved, and the price to fall significantly to generally affordable levels.

What’s government actually doing? Oh, pretty much the absolute opposite. It is seriously time to get rid of these clowns.