Rising energy cost

The Issue: The rising cost of fuel across the country, in the islands and the global community.

Our View: It’s useless barking up the wrong tree when we’re in no position to make a dent.

We can climb the tallest coconut tree on this island, pound our chest, and yell on top of our lungs, “oil prices are too high, please bring it down!” No one would hear our inaudible voices in that we don’t even factor at all in the global politics of oil prices that have been climbing, inexorably.

Lately, a barrel of crude oil is about $34.90, a level most countries, especially underdeveloped nations can’t afford. Global consumers are outraged and despite a quick agreement by the Organization of Petroleum Exporting Countries to raise oil production by 800,000 barrels a day, there’s little hope of price stability in the near term. Even with this, President Clinton had to dip into oil reserve, but it would be interesting to see if the benefits would descend on these isles.

For all the posturing that politicians may pose, the equation of this matter is quite simple: The demand for energy has outstripped supply. It should be understood too that despite global economic recovery, the price of crude have risen steadily. Despite strong growth in Asia, the US and Europe, there’s even talk of a “third oil shock” which started in March of last year.

It should also be further understood that OPEC is running very nearly full capacity. At the same time, more than double the amount of crude oil is needed to ease demand pressures. Indeed, rising prices have created political pressures all over the global village. Here at home, we’re barking up the wrong trees (Mobil and Shell). Neither company can dictate crude oil prices!

Yes, price stability is needed on a global basis. But absent sufficient income from producers and refiners, they will not keep facilities opened and supplies will simply go up and down. The need for price stability is obvious, but this very need will definitely require some measure of coordination between producers and consumers. There’s hardly any hopeful sign in the horizon however the quick response by OPEC to increase production even at near full capacity.

It is everybody’s responsibility to learn to live in difficult times and here in the islands, we often bluff dire situations like there’s no tomorrow. It’s useless picking a fight with Mobil and Shell in that it would be wasted energy too. Let’s hope something breaks for the better. Yuus Maase`!