When you watch the revolution unfolding in the Middle East, keep in mind that your money has helped tyrants suppress it. That’s right: the money you pay at the gas pump is helping the dictators resist the revolution:

http://www.cnbc.com/id/42005048

As the article notes:

“But Colonel Qaddafi probably began hoarding liquid assets far earlier, officials said. He has built up Libya’s cash reserves in the years since the West began lifting economic sanctions on his government in 2004, following his decision to renounce unconventional weapons and cooperate with the United States in the fight against Al Qaeda. That led to a flood of Western investment in the Libyan oil and natural gas industries, and access to international oil and financial markets.”

Let’s end welfare for dictators in the Middle East. Let’s promote domestic renewable energy.

Today we continue our series on what high gas prices mean. And we focus on what they mean for the other parts of the economy:

http://communitypress.cincinnati.com/article/AB/20110303/BIZ01/303030081/1148/rss1020/High-diesel-costs-may-push-other-prices-up?odyssey=nav|head

In many ways, gasoline is the lifeblood of our entire economy. Energy is what drives our cars and fuels our homes and offices. So when gas prices go up, there is a ripple effect on everything.  Think about it: there is almost nothing in your life that is not impacted by gas. As this article notes, this is especially true for diesel which is what fuels the trucks that transport so many products to the marketplace:

“The typical big rig gets about 6 miles to the gallon and can carry anywhere from 150 to 300 gallons of fuel. That means a fillup can cost $1,098 today compared to $849 a year ago. In the longer run…higher fuel costs will be passed on to consumers in the form of higher prices for the goods delivered by trucks.”

This is the real danger: you and I will not only pay higher prices at the gas pump, but also at the store for everyday products we buy.

This is another reason why we need renewable energy here at home.

Today we continue our series on the impact of rising gas prices.

We all know what the cause this: uncertainty in the Middle East is creating much higher gas prices than even just a few weeks ago. But we often don’t stop to think about how this is the ultimate family pocketbook issue:

http://www.ehow.com/ehow-tax-time/

Many families don’t plan for gas expenses in their family budget. And those that do don’t plan for huge spikes in prices. Gasoline at $3.50 a gallon is enough to hurt many families. And this impacts every part of their lives: how they get to work, how they take their kids to school, how they go shop for groceries. Gasoline prices directly impact all of that.

This is yet another reason why we need to get off of foreign oil and start producing more domestic sources of energy.

Have you filled up your car in the last few days? If so, you know that the price of gas is going up fast.

What do rising gas prices mean for you? Our economy? Our country?

These are important questions that deserve important answers. This week on the blog, we’ll try to provide them.

Summer time is fast approaching. That means it’s time to hold onto your wallets as gas prices will soon be rising:

http://www.chron.com/disp/story.mpl/ap/tx/6992974.html

This is a good time for our blog to return to the subject of energy policy in this country. As I’ve often said, every time we fill up at the pump, we are putting money into the pockets of dictators in the Middle East. Can’t we do better than that?

We can and we’ll talk about it this week on the blog!

So gas prices are heading back up. That’s expected as we approach the summer and the driving months. But it’s also a good time to re-examine why gas prices are so out of whack and why we need to re-focus our efforts on renewable energy.

That’s what we’ll be talking about this week on the blog. Join us each day!

This week we are continuing our series on “what’s in the news” and we begin with oil prices:

http://online.wsj.com/article/SB126110607887196613.html

As the article notes:

“Oil prices have risen nearly 60% this year, thanks in part to OPEC production cuts. But the cartel faces problems heading into 2010. Some members, such as Iraq and Venezuela, are increasing output even as OPEC tries to purge a huge buildup of oil. And waning stimulus efforts could pinch consumer demand for oil in industrialized nations.”

In other words, even though we are experiencing a recession, oil prices are going up because OPEC has restricted production. So the question is: how long will we Americans allow OPEC to hold a gun to our heads?

The time has come for the US to quit importing its energy and start producing it right here and right now.

Today we wrap up our series on rising oil prices with a solution.

Instead of leaving ourselves vulnerable to so many variables–foreign imports, speculation, value of the dollar–why not develop new sources of domestic energy? It’s a proven fact that the energy market is not a truly free market. And our use of foreign oil only empowers those in the Middle East who are not our friends.

What if we invested in renewable energy sources like biomass, solar and wind? These sources can be re-produced. And even better, they can all be produced right here in the United States.

Ronald Reagan said that America is the “country of tomorrow.” Let’s prove it by finding tomorrow’s energy sources today. That’s the real solution to high gas prices.

Today we are continuing our series on the rise in gas prices. Another major factor is the declining value of the dollar:

http://www.google.com/hostednews/ap/article/ALeqM5i4_q7DtiEHvUTVNlJoaJ9ufkd1kgD9BJMHB80

As the article notes:

“…prices are on the rise and it is the crumbling U.S. dollar that is sending them there. The dollar has lost more than 15 percent of its value since March. Because crude is bought and sold with dollars, investors who hold euros or other currencies that have strengthened against the dollar can essentially buy more crude with less.”

So to fight high gas prices, Washington needs to strengthen the dollar. And that means lowering taxes, lowering spending and getting the economy moving again.

But since Washington isn’t doing much of that, the dollar is likely to continue to be weak…and gas prices will continue to be high.

This week the blog is focused on the rising cost of oil. What can explain this since peak drive season is gone, demand is down and inventories are up? In a word: speculation.

http://www.investmentu.com/IUEL/2009/October/oil-prices-heading-higher.html

As the article notes:

“With the perception that the U.S. economy is finally moving out of the doldrums, all the hedge fund and speculative money that has sat on the sidelines for months is finding a home in the oil market. Depending on which report you read, world demand for oil is expected to pick back up, and this is adding fuel to the fire.”

In other words, speculators are guessing that the economy is coming back and therefore are pushing prices up. That’s crazy. Why should we pay more at the pump just because some speculators think the economy may or may not be improving? Shouldn’t the price of gas be based on facts, not forecasts?

When it comes to oil, the facts often don’t matter.

This week we learn that the price of oil has begun to slip:

http://apnews.myway.com/article/20090602/D98IG75O0.html

As I’ve previously written on this blog, I think oil is overpriced and will eventually come down.  This is a small example.  What’s interesting is why the price is down: investors fear that inflation is on the horizon.  And they may be right.  The projected Obama budget during the next few years is expected to add more to the national debt than all the other presidents combined from Washington to Bush.  Now, I’m not a mathematician.  But that sounds like a lot of money.

Inflation is another good reason why we need to invest in renewable energy.  Energy sources like biomass are affordable and effective…and can help get us off our oil addiction.

Check out my website for more information on how our new Advanced Trailer for Biomass is changing the energy industry.

Longtime readers of this blog will know that I have long believed the price of oil could eventually reach $20 a barrel.  This week brings more evidence that it just might happen:

http://economictimes..indiatimes.com/News/Economy/Sliding_demand_pushes_oil_price_below_35/articleshow/4146420.cms

Right now, the price of oil has dropped to $35 a barrel.  Last summer the price reached $147 a barrel.  What explains this drop?  Now that we are in winter, less driving goes on and that creates lower demand.  Plus, the recession is impacting everyone’s willingness to buy.  So with demand down, the price has gone down, too.

Then why haven’t prices at the pump gone down?  You may have read a recent article about this very topic:

http://www.reporternews.com/news/2009/feb/15/crude-oil-is-getting-cheaper-but-gas-is-not/

The article confusingly claims that:

“A severe economic downturn has left U.S. storage facilities brimming with it, sending prices for the premium crude to five-year lows….So prices at the pump will probably keep going up no matter what happens to the benchmark price of crude oil.”

Huh?  The fact is the worldwide recession is impacting demand everywhere, not just here.  So eventually, the price of foreign oil will also come down, and with it, prices at the pump.

It’s the law of supply and demand.  And I still believe we are heading toward even an even lower price of oil.

-Randy Hill

I believe free market enterprise is the best economic system in the world.

In fact, I believe it’s the only system.  But to work effectively, the free market depends on rational people making rational decisions and rational conclusions.  Being humans, we sometimes manage to mess with the effectiveness of the market by thinking and reacting emotionally rather than rationally.

I’ve previously written about the salmonella scare in the peanut industry.  The fact is more than 99% of all peanut products are perfectly safe. But some people continue to think emotionally.  Yesterday I was told of a man in Allendale, South Carolina, who went in a local convenience store to pick up a quick snack. When he presented his handful of items, which included a package of peanut butter crackers, the cashier immediately seemed alarmed and told the man “don’t eat that, it’s got peanuts in it.”  This is a perfect example of the public perception being influenced by emotions. I am not saying every small town convenience store in the country has cleared its shelves of products that could be on the list; I am saying 99% of all the products in all of the convenience stores across America containing peanut butter is safe.

Another example is the oil industry.  As I’ve been predicting, the price of oil continues to go down:
http://www.theaustralian.news.com.au/story/0,25197,25043297-12377,00.html

Today, a barrel of oil costs $35.  Yet gas prices at the pump have risen to about $1.80 This violates the law of supply and demand.  With inventories high and demand low, the price of gas should better reflect the price of oil.  What explains this discrepancy?  Emotional thinking.  Daily I have people comment that they think a barrel of oil will soon be back over $100 and many say they think it will happen this summer. What is the basis or economic indicator for these conclusions? Nothing! It’s all emotions and right now with all that’s going on in America: we’re letting our emotions get the best of us.

I encourage each one of you to go out today to your local Wal-Mart and buy some peanut butter. As you are driving look at the prices of gas and think back a year ago and realize that our country and economy will survive and we still may see gas prices below $1.00. And I think its going to stay cheap for a long time.

The free market system works best when rational people make rational decisions.  Come to think of it, the whole world works better that way, too.

-Randy Hill

After a brief increase, the price of oil has again fallen, this time to less than $39 a barrel.
http://apnews.myway.com/article/20090112/D95LIUJ00.html

Traditionally, economists would expect the price of oil to be up at a time like this: tension in the Middle East, talk of OPEC cutting production and the dispute between Russia and Ukraine. These factors often create market pressure that causes the price to rise. So what explains the continuing decline in price?

It’s common sense, really. Higher gas prices last summer reduced demand. People began to find other ways to get to work, maybe by car-pooling or taking the train. And lower demand lowered prices. It’s that simple. Meanwhile, economic uncertainty is effecting what economists call “market psychology” and keeping prices low.

I still believe we could see $20 a barrel before too long. And I repeat my plea: now is the time to think about alternative energy. Why wait until there is an oil crisis to begin thinking about other options?

Today is the time to start building tomorrow.

-Randy Hill

Last week I predicted we would eventually reach $20 a barrel for oil.  Yesterday, we got more proof that we are well on our way:
http://apnews.myway.com/article/20081221/D957BHRG0.html

Gas prices fell nine cents nationwide in the last two weeks.  Crude prices are down also from a record high of $147 a barrel in July to $41.07 a barrel today. The result?  We now have the lowest gas prices in five years. What explains this dramatic drop from where we were last summer?

For starters, less driving is driving it.  In other words, people don’t drive as much in the winter as they do in the summer (when families traditionally load up for vacations or other long distance trips).  Since demand has gone down, so has the price.  Also, the troubles of the domestic car inudstry are impacting demand.  Fewer people are buying fewer cars and that’s helping put downward pressure on gas prices.  All of this leads me to continue believing that we are heading to $20 a barrel.

But let’s not lose sight of the big picture.  Low gas prices give us time to think about our future energy needs.  We need to work today to create tomorrow’e energy.  Our country, our economy and our future demand on it.

-Randy Hill