As mentioned a week ago in the entry Been living under a Popsicle stick?, "...we are terribly vulnerable economically as we continue to import over 60% of our daily oil." For natural gas, in 2006 we imported 19% up from 16% in 2002.
We learned from Hurricane Katrina how a disruption in oil supply and gasoline refining caused gasoline prices to increase; reserves are low, there's little leeway. From an FTC Statement to the U.S. Senate in September 2005 - Market Forces, Competitive Dynamics, and Gasoline Prices -
"In the recent weeks since Hurricane Katrina, gasoline prices rose sharply to $3.00 per gallon or more in most markets. In part because of the soaring prices associated with Katrina, gasoline demand has decreased somewhat. National gasoline inventories remain at the lower end of the average range."
Weather-related disruptions are one of many occurrences that can send energy prices higher. Others include:
- political issues and turmoil - wars - terrorism - natural disasters - labor disputes
We need to reduce our non-renewable energy consumption via a phased-in, federal tax shift. This will provide the needed financial incentive for conservation and development/installation of renewable energy systems.
Without an increase in non-renewable energy prices, we could "run" to U.S. coal reserves. Coal can be converted to liquid fuels but at tremendous environmental cost - primarily increased greenhouse gases. The Air Force is beginning to invest in this.
