Oil is $130-something per barrel, and gasoline is over $4 per gallon. I am paying more for everything from milk to electricity to airline tickets. FedEx ( FDX) and UPS ( UPS) aren't delivering ... earnings. Retail stocks are getting hit because people aren't buying stuff with gas at $4. And Starbucks cannot sell a $4 latte for the same reason. This is what happens when the world's most ravenous (for oil) country has no clearly defined energy policy. These are just a few of the results of a lack of national awareness of the problem and the potential solutions. Barron's pointed out that the average U.S. consumer uses 25 barrels of oil per year. In China, that number is two barrels and in India it's less than a single barrel. The perception is that the growth in oil demand in those emerging countries will pick up and they will use more and more oil. True, we will need more oil. What's the problem?
The world has been running out of oil? The world has run out of "easy oil"? The world is going to run out of accessible oil? False, false and false. We have billions upon billions of barrels and gas equivalents of oil available to the world. In fact, we have billions upon billions available to us in the U.S. We have an estimated 18 billion barrels off the Outer Continental Shelf. Certain people in Congress would have us believe that those barrels are 10-plus years away from our refiners' cracking towers. That's just not true. I told you about the conversations I had with Transocean ( RIG) officers and their time frames for that oil in the last column. I have since confirmed that opinion with other big-time ocean drillers, and the picture remains as clear as it was last week.