The wheel in the sky keeps turning

The markets have closed, and business has wrapped up by the time I am writing this on a sunny Friday in Houston. Another day, another million made or lost for the business. More than likely, it's a few million made. But as we see with the escalating cost of a barrel, operating costs are also ascending, too. When the cost of operating a business gets higher, prices get higher. And when prices get higher, the consumer (usually you) gets a bigger hit to the wallet.

While shuffling through the bustle of the internet, I stumbled across this gem of an article. Authored over a year ago, Verleger puts it in some pretty plain English the 6 reasons as to why energy costs are burgeoning. His main points are bolded, and my commentary is in italics.

• First, global economic growth would boost energy and particularly oil use at near-record rates if supply were available.
  Think China and India.
  
• Second, twenty years of underinvestment have created supply constraints that make it impossible to meet growing demand.
  Remember the Houston economy in the 1980’s, when the barrel collapsed? No one in Houston wants to recall that time.
  
• Third, spreading nationalism in countries holding the largest reserves of easily accessible oil and gas further worsen the supply problem.
  Think Venezuela.
  
• Fourth, needed investment in private-sector capacity expansion is being discouraged by uncertainty created by efforts to reduce global warming gases.
  Fear trumps rationality. And dare you go against the enviro-crowd.
  
• Fifth, supply will be limited by conflicts in oil-exporting countries.
  Think Nigeria.
  
• Finally, efforts to substitute away from hydrocarbons or to conserve will be hampered by the problem’s enormity.
  

Everyone needs energy, either fuel for cars or food for humans, and it takes energy to produce energy. Usage of ethanol, solar, and any other “alternative” energy source is not, and will not be in the near future, capable of replacing hydrocarbon-based fuel in this lifetime.

Chew on that. Meanwhile, wish me well as I drive home and jam some Journey.