Oil prices, are falling. This week, the price dropped just under and then back over $50/barrel. This is incredible if you look at prices, just 6 months ago, prices for the same barrel of oil peaked at an all time high of "$78.40 a barrel in July 2006"
They also had predicted a totally different price considering world market conditions and all the other factors real or imagined that they take into effect when they make these stellar predictions.
"The International Monetary Fund has revised down its 2007 estimate for global oil prices to $52 a barrel from a September forecast of $75.50, the fund's managing director, Rodrigo Rato, told Reuters on Tuesday."
Few things have changed globally, we are still stuck in the middle of a civil insurgency (war) in Iraq, pressures and interferences from Syria and Iran still exists, North Korea still has the bomb, but what has changed, at least in perception, is OPEC's loosening of the oil market, and attempt to get oil under $50 or even $40 a barrel of oil for a few months, so as to lower gas prices and energy costs and snuff out any talk of alternative energy vehicles or real development of anything but the current oil infrastructure.
The reason, simply because this is how OPEC has done it before. A few years ago, and since the 1970's when OPEC proved it could control economic markets, by taking oil production off the market, causing price spikes, more then the majority of Americans thought possible before the energy crisis. There has been a growing trend inside the United States at looking for ways to be more efficient. This isn't new, but what is new is finally the acceptance of hybrid vehicles and the acceptance of alternative fuels such as E85 over regular unleaded.
The arguments for fuel additives have always been that fuel economy suffers, or that it wrecks engines, or they hurt the environment, when in fact the only one of these that is true is fuel economy. It is affected in a minor way while the 'price economy' for the same gallon of gas is substantially cheaper because it contains less gasoline. Falsehoods like the engine myth, that have driven a fear, along with complacency and lack of market alternatives. Certainly the motor companies would rather sell more oil then have to setup new infrastructure for a product that isn't profitable yet. For those that have criticized the President as just another "oil man" and I have been one of them, at times, a new day is about to dawn. Hopefully.
"A focus on renewable energy sources would continue a trend that Bush started in last year's congressional address, when he called for the United States to cut its oil imports from the Middle East by 75 percent by 2025 by using energy sources like ethanol and biodiesel."
One of the only ways, short of developing a completely new technology, or to make fuel cells work as well as fuel combustion engines, would be to increase the percentage of ethanol in regular gasoline. Newer cars, those that were built in the mid to late 90's and on are able to consume this fuel. By 2010 over half the vehicles on the road could utilize this fuel. It is called E85, it contains 85% ethanol and 15% gasoline. Meaning that since we get gasoline from oil, from OPEC, they don't want this trend to catch on or accelerate any faster then it is. Ethanol is made from corn or celluose which is grown as a crop in a field on a farm, harvested and distilled, and processed, very similar to how gasoline is created, ethanol is combined with the gasoline and goes right into the vehicles fuel tank just like gasoline but at a substantially lower cost.
Additionally, the cost of ethanol is fixed to a domestic price structure. Which would eliminate 85% of foreign influence of the price of the fuel if it was kept 85% ethanol rich. If prices, continue to fall, the agenda will become less and less important in light of education, economy, crime, or certainly the war in Iraq, issues which usually are big campaign and political issues, and often given priority over energy policy, and that is exactly what OPEC and the harvesters of the black gold are gambling on.
money.cnn.com/2007/01/18/markets/eia_oil/index.htm?postversion=2007011810
money.cnn.com/2007/01/17/markets/bc.markets.oil.reut/index.htm?postversion=2007011715
www.cnn.com/2006/WORLD/asiapcf/10/10/korea.nuclear.test/
money.cnn.com/2007/01/16/news/economy/bush_ethanol.reut/index.htm?postversion=2007011618