I think there are a few things we need to do to slow demand and help the cause.
First, we should immediately drop the ethanol mandate. Even if the price of a barrel stays high, there is no reason to threaten our food supply by pushing us from food abundance to food shortage over ethanol- a fuel that requires massive amounts of our farmland to produce.
The end result is a product that contains so much water that it cannot be transported in a pipeline. It must be trucked or railed (burning diesel, coal and creating greenhouse gases) before it lands in a car. That car then runs on a fuel blend that has a lower octane (fewer mpgs) and is as corrosive to your engine as it is to the pipelines.
Second, we should open up ANWR and the OCS. We have access to 20-30 billion barrels of reserves if we do.
We should also drop the national speed limit back to 55 mph again. It was 55 the last time we had an energy crisis, and it saved millions of barrels of demand and tens of thousands of lives at the same time.
When the flows of money reverse out of the oil play, there will be blood in the street for those still in the energy trade. There will also be opportunities to capitalize by following the flow from oil to the next big trade. I will outline that in my next column. For now, sit tight and watch this thing play out. Oil needs to find its next move but taking a position now is crazy.