Today’s Weekend Edition, Saturday show on National Public Radio has an interview with John Hoffmeister, former CEO of Shell Oil and founder of the non-profit group Citizens for Affordable Energy.
Show host Scott Simon asked Hoffmeister what’s driving up oil prices. He answered:
Hoffmeister goes on to mention the rise in Asian demand for oil and its potential to create fear among speculators about supply adequacy here in the states, especially in the West – and that includes Hawaii, which leads the nation in high gas prices.
“What we’re dealing with,” he continues, “is irrational fear, and that fear drives people who must have oil in the future to pay whatever price is being bid – six months, 12 months or longer from now – which always happens this way, it raises prices generally.” The economy’s recovery also has created more demand for oil, and that’s influencing the price as well, he says.
Eliminating the internal combustion engine will be a key step in reducing oil’s grip on the economy and family budgets, Hoffmeister says, but in the short term, supply must be increased to meet the demand in this decade and perhaps the next.
The interview is well worth the six minutes it takes to play on the NPR website.
Oil’s Highest Price
Today’s S-A story requires additional comment about its report on high gas prices in Honolulu and statewide, which reached record levels today, according to the AAA. The statewide average for regular is $4.532, and in Honolulu it’s $4.427.
What begs for comment is the story’s assertion that “In June 2008 the price of oil peaked at $134 per barrel.” Virtually all news sources on the subject peg the all-time high price for crude oil at $147/barrel. You can find this number cited in innumerable stories on the Internet; the July 12, 2008 story by The Guardian is but one.
Brent crude was trading just short of $124/barrel at the most recent posting. The $23 spread below the all-time high in today's rising market is enough to make us fear Hawaii will reach $5/gallon regular gas in the months ahead.