The Crude Cognoscenti speak…

If you’ve run out of things to worry about for 1999, here’s something to ponder for next year: oil.

Oil greases our economic skids, and the specter of rising prices is a bummer (unless you strike oil in your backyard…which I doubt you’ll do).

Gas is about two bucks a gallon at the pump–yikes. Electricity here, which is generated by diesel burning engines, is about twice the cost of what it is in the states. And the airplanes that fly our tourists in and out, well, they essentially burn kerosene, yet another petroleum product.

Like it or not, there’s no way to reduce our reliance on oil.

A well meaning environmentalist once lectured me on the Tremendous Potential for wind energy here. I asked this guy if he refrained from turning on the light switch at home and unplugged the fridge unless there was 12 knots of wind blowing outside–12 knots being the rough minimum to generate even remotely commercially viable quantities of power.

I didn’t get an answer.

I wouldn’t want to be on an operating table at CHC and have the surgeon mutter, “oh, darn, the wind died…and so will you.”

And wind energy takes a lot of one thing: Land. A modern wind turbine generator has a rotor- span of about 140 feet. It takes a lot of square miles of dedicated soil to get any respectable quantities of electricity. Land–flat enough to permit access roads to be cut to each generator–is in short supply here in Saipan, and the visual blight of massive generators wouldn’t exactly be a boon to tourism.

Solar power? It generally costs about 50 cents a kilowatt hour (at least at U.S. latitudes), which would put us all in the poor house.

If I could snap my fingers and develop a clean, reliable, and cheap source of power, then I’d do it…and so would everybody else.

Cazart, there’s just no way around this petroleum gig, eh? Indeed, like the rest of the world, we’re stuck with an utter reliance on black gold–oil. Oil, oil, oil…the price of which has soared about 130 percent over the past year.

A lot of analysts think the price will stay firm, or even climb higher.

The good news is that–if the analysts are right–you can put some of this black gold in your pocket and ride the expected tide of higher stock prices for certain oil stocks (Occidental Petroleum, for example, is cited as a promising play by some of the Crude Cognoscenti).

The crude reality for the Commonwealth, however, isn’t a happy proposition.

Of course, nobody can predict the price of oil in the future. But the specter of firming prices points to the fact that the CNMI economy is vulnerable to these types of “outside” (the fancy economic word for this is “exogenous”) forces. Unless the CNMI gets its economic house in order, we face yet another bummer of a financial factor that is going to further trip up our weak- kneed business sector.