Drilling In Alaska

Is This The Answer to High Gas Prices?

The short answer is no. Peak oil is real and it is here now. From now on the amount of crude oil available will decline.

The experts estimate that there are 10 billion barrels of oil in Alaska. Sounds like the answer to our prayers doesn’t it? It turns out that those 10 billion barrels of oil could meet the world’s demand for oil for about 60 days. That’s it. Then what?

Higher gas prices, that’s what. Look at current prices in Europe. $5.07 per gallon in France, $5.36 in Germany, $5.59 in Britain, and $7.00 per gallon in Amsterdam.

Now the good news is that with continual increases in the cost of gas, we will eventually start seeing alternatives to fossil fuels. That is if the government stays out of the mix. You see, currently we see ethanol being added to our gas and the price of this type of gas is cheaper at the pump than regular gas. The reason it is cheaper is because the government subsidizes the production of ethanol. The truth is, it takes more energy to produce ethanol than it produces as energy in our cars. Thus the name “energy sink.”

This is one of several tipping points that could send the U.S. economy into recession in 2006.

We will be looking at various possible tipping points over the next several days, as the New Year gets under way.