Energy: You got to love — and hate — it

Things look great in the Permian Basin. Business is booming; housing is full; new oilfield service companies are sprouting up all over. Rigs here and there. Everyone is shorthanded. There is lot's of work and not enough people to do it.

Gas prices are through the roof. I know we are all supposed to feel great about high prices for gas because our economy - your job and mine - are linked to high prices. But it's still hard to pay what we are paying.

And if that is tough - think of over half of each dollar you spend on gas going to Venezuela's Hugo Chavez or Middle Eastern governments.
Sen. Pete Domenici is concerned that at the rate of $600 billion to $700 billion a year paid to other countries to buy their oil, we are bankrupting the United States. Last week, T. Boone Pickens began a series of TV commercials about the problem. "The greatest transfer of wealth in the history of the world," he calls it.

And to make matters worse, other countries, particularly China and India, are beginning to make real demands on the supply of oil. With China's 1.3 billion people, the slightest increase in oil consumption has a profound impact on demand, and China's demand has been increasing about 10 percent per capita per year.

If that isn't bad enough, experts tell us that world oil production has peaked in 2005.  No, we are not running out of oil, but we have to pay more to get the oil we need. Demand now exceeds supply by 1 million barrels a day.

Apart from trying to talk sense into every member of Congress and our presidential candidates, what are we going to do?

We must recognize that we have a problem. Just getting the public to recognize the problem is no easy task. For everyone alive today, cheap oil and gas has been there to fuel our cars, heat our homes and make our lives better. Cheap oil made possible the rapid growth of the American automobile industry and expensive oil may put an end to it as well. Most of us focus on the price of gasoline. How can it be so high?  Who is gouging us? What we need to do is focus on the real problem. Yesterday's technology, yesterday's energy sources are not going to work for tomorrow's energy needs.

This is the first in a series by Watts on the energy crisis and what we need to do about it.

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