Oil. Our world revolves around it and nearly everything our society does is dependent on it. Most of us couldn’t get to work or the store and groceries and other supplies couldn’t be delivered around the country or around the world without it. This is a relatively new dependence in our world today, but when we get addicted to something we do it in a big way.
It’s been said that one gallon of gasoline has the equivalent of three weeks of human work. (source.) Three weeks! It’s no wonder the internal combustion engine has allowed the clever human race to advance to where we are today. But there’s one little caveat here…
Our economy is driven by oil. When oil prices go up so does the price of our food. It’s all interconnected with our economy and when you have a system that dependent on something you’ve got the potential for big trouble. Enter Iran and potential big trouble.
It’s well known that Iran doesn’t care for the United States and when their country is the fourth largest oil exporter in the world (source) it can cause some tension. I won’t go into the politics of the issue at this point more than to say that Iran is now threatening to close the Strait of Hormuz, through which runs 20% of the worlds oil. With the way the markets react to news today I’m surprised oil hasn’t already gone above $150 a barrel. If this sabre rattling keeps up I wouldn’t be surprised to see gas prices go well over $4 at the pump in the next few months.
Could Iran really block the strait if the rest of the world decided they wanted it open? Probably not, but all it would take is a couple of anti-ship missiles hitting an oil carrier and it wouldn’t really matter. I suspect ship owners and captains wouldn’t want to run their expensive tankers and cargo through the strait until things had settled down a little. Maybe not enough to put a big dent in the oil supply, but certainly enough to drive up gas prices and put a strong economic headwind on the “recovery” that’s being touted in the United States.
Arguably we have passed the point of peak oil and to me it seems unlikely that oil prices are ever going to go back to where they were before. When there’s a shortage of something what happens to it? I’ve rarely seen prices go down on something that was in high demand.
This post isn’t about sounding the trump of doom, but it is a good idea to keep your eye on situations that could potentially cause problems in important areas such as transportation, food prices, heating oil prices and yes, even an economic crash due to high energy prices.
Check out some oil and energy predictions and thoughts here. And for those of you interested in military action here’s a threat assessment for the Iranian military threat.
Are you ready for high gas prices? What have you done to prep for it?
-Jarhead Survivor
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{ 37 comments }
This is the one thing l worry the most about. I think the 4 a gallon assessment is a little low personally. With 2 of us working in a restaurant and 1 at a grocery store, l think this will definitely affect us here at home.
When gas goes up, people can’t afford to go out to eat so we lose money, hours, tips what have you. If they had to dole out gas because of shortages because of the supply being lowered, the grocery stores will get food before restaurants do.
So because of this l am growing everything l can even in these colder temperatures. My house looks like a small jungle, but hey l’ll have tomatoes and green peppers when no one else will. :)
One word: Telecommuting.
I’m working to move in a month and a half to a place rather remote from work (an hour commute), but this wouldn’t be possible without telecommuting. Initially, I can work from home 3 days a week, which suits me fine (the other two days I go in), but if need be I can telecommute full-time except for travel (in which case I just head for the airport).
This alone will chop the fuel budgeting down to practically nothing if it comes to that.
Now if we could only hijack oil via cyberspace …
My vocation & advancement is exponentially improved with face to face interactions so I’ll pay the extra at the pump – it’s just a cost of doing business.
Well, you can (hijack) in a way, if you know the IP addy of the local petroleum distributor’s servers, can break in quietly, and find the dispatching software… ;)
In all seriousness though, I know what you mean about being glad to pay the extra. In your particular field, it makes sense. In my own, it doesn’t – most of the servers and people I deal with are all done remotely anyway (with the occasional site visits to oversee an initial installation, or to go solve something that’s gone truly hairy). My project teams are often in different time zones, so getting together over the phone, WebEx, or IM is natural to us. I can just as easily do my work from a cubicle desk, as I can in a bedroom overlooking a wooded field. It gives me a bit of freedom in a lot of respects, and I’ve come to treasure it a lot.
saudi arabia has promised to make up any shortfall from iran at no cost increase. they want us to smack iran that badly. the cost of fuel SHOULDN’T go up, but the oil criminals will use it as an excuse to scare the sheeple into paying thru the nose for it. we get 15% of our oil from iran(why?). consumer demand has dropped more than that since 2008, more reason for it to NOT go up. i have enough stored to get thru the short-lived price gouging……. i hope:) stack it high!
Thank goodness I have a few barrels of oil stashed away in my pantry.
“Our economy is driven by oil” is the convenient illusion. Our economy is driven by leaders of self-interest, nothing more. It is all a big money game & dependent upon skillfully squeezing as much out of the pockets of us serfs.
Iranian oil is about as much of a factor as Monica Lewinsky.
Jason…..I believe you nailed it.
We have enough oil in various parts of the US that we could cut out Iran and the middle east entirely once it was all up and running. The problem is no one wants to upset the environmentalists. But the Gulf of Mexico, and ANWR should both be opened.
The price of oil is going to skyrocket. Remember last year when they predicted $5 a gallon gas. I can see that coming this year, though I do think that the Administration will do what it can to keep it low until after the election.
You know what I find amusing is the oil production remains constant while the prices at the pump rise & drop like a brides nightie.
Who’s kidding who?
The funny part is, our biggest foreign oil source is, err, Canada.
I doubt much comes of this. The saber rattling serves both the Iranians and the Obama Admin well. But, an actual cutting off of Iranian oil would serve neither of them. We need cheap oil and the Iranian’s need the cash from the sale of oil.
There are pipelines in the middle east that can route some oil around the Strait Of Hormuz, our strategic oil reserve is full, and so is the EU’s oil reserve. We can make up at least a good chunk of the oil that any stoppage would cause. Plus, $200 oil would cause demand destruction and you’d see the price of oil come back down in a hurry.
I live within easy walking or biking distance of work and almost everything I need and the rest of it is just a short hop in the car away at 28MPG. I can make my 14 gallon gas tank last quite a while. I’m really not worried about this.
If this was going on durning hurricane season and we had a Cat 4 storm brewing in the Gulf Of Mexico, I’d be a little more worried. I figure we can deal with any one thing just fine. We can handle any two things OK. But, if you get three things going at once, say a blockage of the Strait Of Hormuz, a Cat 4 storm in the Gulf of Mexico, and another big finical blow up and we’re pretty much screwed.
I live just a little over 7 miles away from where I work. I drive a 4×4 pickup, so the savings are substantial, I get maybe 15 – 17 miles per gallon.
If gas goes over $5 a gallon, I think riding my bicycle would be worth the effort, less than 30 minutes one way (I’ve it during the weekend, just for kicks). Even have a dedicated ‘Bike Lane’ for most of it, way cool.
j.r. guerra in s. texas,
Alternatively, in case you’re lazy and out of shape (like I am), you could go with this:
http://powersports.honda.com/2011/ruckus.aspx
114 MPG for $2,500.
I’m actually giving serious thought to this thing as a back-up, in case of S H-ing TF.
Actually riding it assumes, of course, that you’re not overly concerned with appearances … which I’m usually not … within reason ……..
Then again, maybe I should just take horseback riding lessons.
What an odd coincidence – I just saw one of those Honda Scooters on the road in front of me. I was surprised how much get up and go it had from a dead stop.
Only in America do people worry about appearances. In Vietnam, China, India, Thailand & many other countries they ride things in public that make this Honda Scooter look like a Rolls Royce – and they could care less, it gets them from A to B cheaply.
Actually, I was joking about the “appearances” thing. I really am considering getting one of these to get to and fro.
Inasmuch as appearances matter (admittedly, not much), I linked that particular model because I preferred the simple “mini-bike” look to the more “vespa-like” ones.
But, I agree, at 115 MPG looks are hardly important.
I had previously considered getting an electric tricycle, so, clearly my main concern was not looking “cool” — (google “electric tricycle” and you’ll see what I mean). It’s about half the price, but you’d still need to recharge the batteries, so I scrapped the idea when I saw the gas scooter.
Dualsport motorcycle here. Good MPG, capable on/off road, carries a passenger and more gear, and can be brought along with the primary BOV if we need to bug-out.
That is one thing about the city – on a daily basis, gas is not a necessity for individual drivers. And they all have those teensy cars. Get one of those before a scooter or bike – no good in rain/snow. And you can’t carry supplies, plus you can’t take cover in it.
If you must have a two-wheeled transport, get an off-road bike if you want something motorized, or a 10-speeed bicycle to be in shape before Armageddon.
Just take it away from them . Our government is determined to stay in the middle east anyway militarily . The recent pull out of Iraq is more an election stunt than anything else .
Also , as a nation , we dont have an oil dependency problem ……we have an infrastructure problem . If our passenger rail was at least up to the equivalent level it was during WW2 , and our freight rail was triple what it is now , we would be in much better shape . The WW2 fuel rationing forced people to live smarter .
Agree – and the U.S. should also have at least one modern TRUE “high-speed rail” line across the country. Third-world countries have literally left us in the dust on this!
Its called corruption . After WW2 the big 3 automakers and firestone tire company got together to get rid of passenger rail and inner city rail to sell more product …….. politicians got a good bribe ( funding ) to allow it . Hows it workin for us now ? Now we would have the automakers and airline lobbyists squashing it . That is one of the only good things about having a constitutionally declared war ………. you can order things done that are in the best interest of the nation as part of the war effort .
Now that oil is being harvested in the Dakota’s that would be just the ticket to make an even bigger profit for the skanks and the minions.
Don’t forget that shutting down the Strait of Hormuz shuts off more then just Iran’s oil. Any shutdown will cause the price of oil to skyrocket. But for me the bigger concern is our navy and the safety of our military. It would be possible for Iran to use the anti-ship missiles they bought from China to take out an aircraft carrier and other ships as well. This is a very real risk and the risk goes well beyond the immediate issue of hitting our ships. An act like this would force a shooting war with Iran with little chance of ending until Iran’s forces are destroyed. It is difficult to know how all that would play out and what other hot spots in the middle East would explode. This is a dangerous situation made worse by our election years politics. It is an old ploy to start a war to distract the voters and rally people behind the incumbent.
I wonder what the moral is with Irans troops ? That country is again on the verge of another revolution , they may have stamed it out now but like all dictatorships , it just spreads discontent and fans the anti government flames . I woud guess Irans government would get a very rude surprise when their own people and military turn against it , especially when they know that #1 they cant win no matter what they do #2 any rebellion would be backed up and supplied by coalition forces = current Iranian government gone . The guy is also like any other dictator in history …….. out of touch with reality with dreams of grandure that cant be achieved . Hitler cut his wrists by backstabbing the Soviet Union instead of knocking England out of the war early , Napoleon by going into Russia , Japan by attacking us . Sadam going into Kuwait , etc . This guy may do it it but the people and military know the consequences and backlash . I dont even think China would sit idly by and let them close off the straight , it affects them as well . China is still a communist nation BUT things have changed , they are less concerned with ideology and more concerned with business and economy .
Gone With The Wisdom,
Don’t worry about our Navy, there is an extremely low, nearly zero probability that Iran will sink one of our ships because they understand the repercussions of such an act would end in a complete leveling of Tehran. Also, closing the Straights of Hormuz affects more than the US & don’t think China, England & the rest of the world will sit by idly & allow this to take place. The world will NOT revolve around an Iranian act of aggression – it would NEVER happen.
Do you remember the mighty & fearless Republican Guard of Iraq who we demoralized? They folded like a cheap tent while being live on CNN & think the Iranian military knows that they would be up against a foe that would send them into oblivion rather quickly. Don’t forget in 1988 when an Iranian mine damaged one of our ships – they paid dearly for that one.
Iran ranked #12 vs US ranked #1 in military power, hmmmm I think know they are severely out matched. Then there is the added bonus economic sanctions they’d suffer ….
As you said , We are ranked #1 , then you combine that with the other nations joining the effort that it would piss off = snowball in hell would stand better odds .
Remember, remember— it’s not just the cost of YOUR driving that goes up. The cost of everything in the WORLD goes up.
Exactly correct Templar. Everyone who is unconcerned because they live within walking distance of everything they need should think again. They live within walking distance of where trucks on very tight budgets bring stuff.
Agree – we feel it in food & merch more than at the pump (cost of transport + profits + a “temporary increase” which never seems to get to the people paying for the truck gas)
I’m trying to stock up on long-term (years) products when on sale – shampoo, soap, toothpaste, tp, etc – as well. These items go up without people noticing, and they last a long time.
Another thing that drives up food costs that is rarely talked about is all the BS specialty food made for fussy eaters . I’m talking about low sodium , low fat , low carb , organic , sugar free , low sugar , etc.etc. , ……… its BS that it even exists . All that branched off production costs YOU money . Learn to eat real food , exercise instead of dumbing out in front of a TV , stop buying pre packaged food and actually learn how to cook . Variety in our diet is one thing that made this country great , the other stuff is what makes it stupid ( and expensive )
“UK: Europe Will Adopt Sanctions on Iranian Oil”
http://abcnews.go.com/International/wireStory/uk-europe-adopt-sanctions-iranian-oil-15364805#.TxOExRz5MxQ
Looks like we might have just passed the usual saber rattling mark with Iran and with the threats of shutting down oil production in Nigeria that might mean we’re dealing with two big worries.
I’ll be double checking the supplies in the pantry and topping off my cars gas tank in the morning.
One of the main threads of the book of Ecclesiastes is – there is nothing new under the sun.
This stuff has been going on for decades & centuries. This is solely a function of profit, nothing more and modern profits can only be realized by NOT squeezing us serfs out. It is a very straightforward mathematical process to understand the maximum amount that can be gained from a given sector of the population.
Ever wonder why gas prices differ from region to region? The price of regular gas in L.A. today is $3.55/gallon while in Enid Oklahoma it is nearly 20% cheaper & Caracas Venezuela it is a mere 12 cents/gallon, why? It’s as much as they can get.
Putting faith in mankind has never proved out to be beneficial for mankind.
Worry about only that which you can control … and that’s very little.
“Worry about only that which you can control”
Totally. I can make sure my car’s gas tank is full and that I’ve got plenty of oatmeal and brown sugar, beyond that not so much.
Good, now be happy & enjoy the show!
I have been reading Goldstein, a book about a future dystopic America. One of the plot lines is controlling people’s movement by restricting access to gasoline. With electric cars, people cannot move far away from the cities and the charging stations.
http://goldsteinrepublic.com/about-the-book
If they had their way , we would need papers to travel in our own country , pretty much like the Soviet Union .Dont worry tho, I’m sure they are working on doing just that . Stalin would be proud to see how many civil liberties that have been stripped in the guise of protection from terrorists .