When prices go down, it's the Jews.

Boo-hoo! I hate to say it but I have little sympathy for all of those in the oil industry who did their very best to rip us all off this past summer and who probably caused the tipping point for the economic conditions of average Americans...and now the U.S. economy continues in meltdown. (And for the record, if anyone would look back on my posts, when others were saying that we all should get used to $4 per gallon gas prices for the rest of our lives, I predicted that the prices would drop by the November election or by January when the new president arrives.) Americans can't afford $4 per gallon gas prices. The only sad part is that the tiny amount of Americans' stimulus check money from last year went pretty quickly to the record profits of Exxon and the other oil companies. They greedily took it.

I'm not a big fan of taxes, and I'm not a cheerleader for alternative energy, but this is a no-brainer. It's time to put a substantial energy tax on IMPORTED oil (one that goes down as price goes up, to ease the burden of high prices). But not on natural gas, and not on domestically drilled oil.

As far as low prices hurting oil producers--good! They are parasites. And they're all, not surprisingly, de facto or literal totalitarian regimes.

Klare makes many very good points in regards to the consequences of cheap oil. Still, the potential problems are more than offset by the benefits to the USA.

I don't want to sound like a Nativist/Libertarian, but the internal political fallout other countries experience because they can't make money off of feeding us billions in oil is not our problem. Anyway, it's not like the poor people in the middle east are being helped by the billions of dollars their governments collect from US consumers.

And as far as national security goes, guarding our precious petrol reserves is a major reason US troops are scattered across the globe. The less oil that has to be imported means more security for America, and fewer entanglements with anti-democratic regimes in unstable countries.

Developing non-petroleum energy sources is critical if this country is going to move forward.

I found oil use predictions in this article disturbing. Informed climatologists say we must take drastic CO2 action within 10 years to a void a tipping point where global warming will extinct us all. This forecast has us whistling along like its 1952.

Cyclical economist Ravi Batra says throughout the recent runup to $4/gal gasoline the oil inventories in the US were very adequate and constant. The "shortages" and price spikes were really market manipulation created by the gasoline brokers who were enabled by deregualtion legislation lobbied for, and won by Enron.

Free market capitalism is organized crime. The entire Bush administration has been a mega-looting and fleecing of the American people. Gotta hand it to them, the Ferengi award goes to Karl Rove...and sadly it looks like they'll get away with the whole thing.

"Plunging oil prices are also expected to place severe strains on the governments of Iran, Saudi Arabia and Venezuela"

Three horrible dictatorships whose total collapse should be roundly cheered by us all. When they go, where is the international terror apparatus going to get its funding?

So, when oil went up, grocery prices went up, because we were told it cost more to ship things. Now oil is down, and grocery prices are still climbing. What's wrong with this picture?

...

All this fueled fierce efforts by major consuming nations to secure control over as many foreign sources of petroleum as they could, including frenzied attempts by U.S., European, and Chinese firms to gobble up oil concessions in Africa and the Caspian Sea basin -- the theme of my latest book, "Rising Powers, Shrinking Planet."

With the plunge in oil prices and a growing sense (however temporary) of oil plenty, this dog-eat-dog competition is likely to abate.

...

Why would the fierce efforts suddenly be abandoned when oil prices drop a bit in the short term? If anything wouldn't this be the time for their efforts to be redoubled while the oil-producing assets might be undervalued? Does anyone really thing that the most profitable business in history (see any number of articles on quarterly profits by petroleum companies) is going to be fooled by short term fluctuations in oil prices into abandoning their long-term strategic plans? These companies will be making money off of you and me for our entire lifetimes, they know exactly what they are doing. Securing cash cows for tomorrow using the profits from today.

And when they can maximize their profits by switching to something that doesn't damage the planet, they will switch. But not until then.

Oil prices will rise sharply when they go up. It is important to understand that Oil shot to $150 a barrel because of a tiny supply/demand mismatch - somewhere between 1/2% and 2% That mismatch was "fixed" with oil whose production cost was between $70-$100 a barrel, as well as the very late demand constraints of oil over $100 a barrel.

Oddly, the more we plan for expensive oil, the less likely it is to occur. This is because this very planning would serve to:

(a) diminish demand on a constant basis for oil;

(b) provide for oil-substitution at prices lower than say $100.

There are a number of things that could be done in the medium term to create alternatives, and could be part of Obama's stimulous plan. A simple one is a boost in the US Federal Gas tax (but not right away.) Another one is a tax credit for scrapping fuel inefficient cars (which would boost the auto industry too) -- preferably one that is skewed towards bigger credits for older cars (helping the less well off who drive older cars.)

Fuel efficiency tax-credits would create work for the construction industry too -- but given my experience with the builders lately, I would pitch them at say a percentage of a fixed per square foot cost for say insulation upgrades, or storm windows, etc. Here I would focus on home heat because it would impact heavily those homes that use oil-heat. Try some sort of accelerated depreciation for business for measures that can be reliably be shown to cut oil and gas consumption -- make funds available for public buildings like schools for the same purposes.

Medium and longer term, upgrade rail and public transportation. Push for more nuclear generation and renewables.

Finally, I favor raising the gas tax, but right now it would hurt the economy. Indeed as a proportion of income it would fall most heavily on the working poor and lower middle class. I would build in a gas tax rise into the legislation to take the measures I listed above, as a way to recover their cost, but at a date say 18 months from now, implemented at 5¢ or 10¢ a month until it is say $1, and make the coming rise the stick to make people take-up the credits.