The price of oil has doubled in the past year. And everyone is blaming everyone else for high crude oil prices.

Congress, says The New York Times, “feels pressure for action.” Politicians want to ‘do something’ about high gas prices.

No wonder. There’s a strong waft of hysteria from Big Media. Consumers are “angry and frightened,” says the Times. It goes on to tell readers: “Senator Bob Casey, Democrat of Pennsylvania, heard it even closer to home, from his own teenager. ‘My daughter said, ‘Dad, what are you going to do about gas prices?’”

Even teenagers are concerned, for God’s sake! Even teenage girls!

Congress want to be seen to be ‘taking on the speculators,’ who they say are artificially keeping oil prices high.

Never mind that it’s entirely possible that most speculators are short on oil right now and removing them from the market with higher margin requirements may actually push up oil prices, as Dave Gonigman pointed out in Desidooru Saloon.

Here’s more from energy expert Byron King. Byron says speculators are just investors protecting the value of their money. They look ahead and they see oil no reason for oil to come down in price…

Speculators are speculating because there is something about which to speculate. (Let me thank my sixth-grade English instructor for teaching me how to compose that sentence.)

Remember when oil ran up back in 1979 and 1980, when the entire Iranian oil industry collapsed in the wake of Ayatollah Khomeini’s Islamic Revolution? About five million barrels of oil per day simply left the world marketplace. It was gone — poof! Not there. No tankers.

~~~~~~~~~~~~~~~Special~~~~~~~~~~~~~~~

The Next Oil Crisis

Oil is still surging past historic levels, yet the real oil crisis is still looming on the horizon.

Soon, new information will be released detailing the actual state of the world’s oil supplies. When this day comes, we’ll see the actual energy crisis hit and the U.S. economy buckle.

Find out the truth before the news comes out here…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Even though five million barrels went away, people could still look to places like the North Sea, Alaska, Angola and elsewhere. And they could feel certain that sooner or later, there would be future oil supplies flowing down the pipelines.

But that’s not the case today. When people look ahead now, they don’t see from where the oil of the future will come. Most of the world’s current large oil fields are in decline.

As for the so-called oil speculators, they are just defending the value of their money. They are looking forward a few years. What do they see? All of the current energy development projects will just barely replace the oil that will NOT be coming from declining oil fields. So peering ahead, there’s no net increase in future oil output. We’re looking at a plateau in output, if not the backside of the Peak Oil curve.

But we are looking at growing energy demand, as well as demand for other resources. So investors have placed hundreds of billions of dollars into energy and other commodity funds during the past two years. They are both hedging against dollar inflation and anticipating future supply shortfalls.

Long term, this is great news for one of my Outstanding Investments recommendations, a Canadian tar sands company. This company is facing higher capital costs, as well as higher costs for inputs like natural gas. And it suffers from a raw political bias (suicidal, in my view) against synthetic crude oil because of the carbon dioxide emissions.

Along those lines, some politicians in the U.S. want to renegotiate the North American Free Trade Agreement (NAFTA) that includes Canada. Word to the wise: Don’t go there!

Really, if the U.S. renegotiates NAFTA with the Canadians, our friends to the north will have some surprises in store. The U.S. will rue the day that it tore up NAFTA with the Canadians, because that will just plain shut off many of the valves on a lot of pipelines.

Seriously, the Canadians have eager buyers for their energy resources, and they don’t need us Yankees. Just keep in mind that downstream, people will demand oil, and companies that have it will make money.

Getting back speculation, those “speculators” are not the problem. Speculators are sending a message that policymakers had better heed. American politicians better get serious about finding pathways through the “energy issue.”

Although I do have political opinions, I try to keep them private, especially careful not to hurt the feelings of any of my readers.

~~~~~~~~~~~~~~~Special~~~~~~~~~~~~~~~

Be Prepared for the Stock Market Apocalypse

You could still make major gains in the coming stock market bust…

Even after billions more in bank losses…even as foreclosures continue to soar…even as stocks on Wall Street fall apart. In fact, in spite of those things…with a lot less risk. And plenty of confidence that you’re doing the right thing.

All you have to do is follow seven steps. Click here to learn how to protect your wealth (and turn a very nice profit) in the stock market meltdown…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

But that does not mean that I don’t have opinions within areas of my own expertise. If you are reading this, you must know that oil prices have doubled in the past year. There are profound supply issues looking forward. (I’ve been writing about Peak Oil and related issues for Agora Financial for four years.) And world demand is still rising, despite the very slight pullback in U.S. oil usage in the first half of 2008.

Whoever wins the race had better be ready to think in terms of energy. And I mean from day one.

Energy is not just “another issue.” It’s not as if a politician could “do energy” and then move onto other important items on the agenda — like appointing your friends federal judges and handing your political donors prestigious ambassadorships.

Energy will be the defining issue of the next president’s term of office. This is already baked into the cake. Nothing will change it, short of a major war. And even fighting a major war will be controlled by the energy issue (as was World War II, by the way — another long story). The U.S. won’t go to war over most things. But we’ll fight over energy. Or where have you been?

Every U.S. president has had something associated with his term of office. It might be good. It might be bad. But it’s the shorthand way in which we remember the guy. When I think of Lyndon Johnson, I think of the Vietnam War. When I think of Richard Nixon, I think of Watergate. When I think of Ronald Reagan, I think of him meeting with Gorbachev and winding down the Cold War.

The next president’s big issue is already on the table. It’s energy. It has been decided. The gods and fates have so dictated. Everything else is window dressing. Everything else is just the White House Easter egg hunt. Nothing else will control the outcome of the next president’s term of office. Energy, that’s it.

Energy. Take it or leave it. Except you can’t leave it. The nation needs to get energy right. We can have energy supplies for the economy. Or we can just decide to wind down the 232-year-old experiment called the United States of America. We can hop, skip and jump into James Howard Kunstler’s The Long Emergency. It’s that stark.

Here is the slogan for the next White House Situation Room: “It’s the energy, stupid.” Practice is over. It’s game day. It’s time to suit up and play. What’s your plan?

And we can’t just do 20 more years of energy research. Really, suppose that nobody ever filed another patent for a new and better invention in the field of energy. We could spend the next century just rewiring the nation based on what we already know how to do. The future is one of systems engineering. The future is all about taking the ideas and technology that’s already out there. Bring them down off the shelf and make them work to run the country.

So if the next president-elect is not ready to tackle the energy issues of this nation, he just ought to stay home on Inauguration Day. Don’t waste our time.

Source: It’s the Energy, Stupid