Every time the price of oil rises above $100 a gallon, the price of gasoline in the United States becomes a real challenge for small businesses and consumers. Meanwhile, the price of jet fuel and diesel fuel affects other industries, and acts as a general tax on society causing artificial inflation, and if we add to this the drought in the Midwest and the increase in food prices, we have some of all the components you need to slide back into recession. Okay, so let’s talk, okay?
It also seems that whenever we have high gas prices, there is a resurgence of interest in fuel-efficient cars, as well as high-end, all-electric vehicles. In fact, Ford has announced that it will launch five new hybrid models and a couple of fully electric cars; in fact, it is investing $135 million, hiring more than 1,000 new cleantech energy engineers and adding factories. That’s a good thing, but I hardly needed the new CAFE standards to make this happen. The high prices of a barrel of oil are what are causing this change in scenario and strategy.
Honda is also building a new plant in the US and will build a new hybrid car model here as both Ford and Honda chase the high-blooded leader; Toyota. So it seems hybrids are back in fashion, and while the Chevy Volt had failed, suddenly everyone is looking for cheap transportation once again.
It doesn’t look like the price of oil is going to go down any time soon, there are all kinds of challenges and conflicts going on right now in the Middle East. And while countries like Syria only produce 1% of the world’s oil, that’s still 1%, and it does matter. As does what happens in Sudan and other smaller oil-producing nations.
Of course, the big question mark comes from Iran regarding the Strait of Hormuz and a possible war over the production and proliferation of nuclear weapons by that Islamic Republic. Interestingly, we could have written that same paragraph in any of the last 5 decades, just by changing the names of the countries, right? Have you ever read Henry Kissinger’s essays from the 1960s; history repeats itself, that’s obvious.
Meanwhile, we’re on the cusp of new battery technology that could completely change the game, meaning there will be more electric cars with longer range and at a lower cost. We have plenty of natural gas to power electric power plants, and it is possible to lower the cost of gasoline for the American consumer and a small business. Obviously, our economy needs some relief, and all of this can’t happen soon enough from a consumer perspective. Therefore, they will be in force buying hybrid vehicles and all electric ones. Please consider all this and think about it.
