Anger grows across the world at the real cost of frontier oil

I reiterate two things.

First and foremost, oil is sold waaaaay too cheap. Where is the logic in pricing one liter of refined gasoline below the price of, say, one liter of Coca Cola? It costs hundreds of millions of dollars to prospect for oil. When it is found it costs hundreds of millions to extract. Once extracted it costs hundreds of millions to convey. Then you need hundreds of billions to refine and hundreds of millions more to distribute.

Oil is vital… that is, “vital” to our life. Oil is in everything either in the form of energy input or as a direct input in material, fabric and plastics. If you are sitting at a computer reading this blog post, anything and everything you can see from your chair including the stuff you cannot see, contains oil.

Oil is expensive to find, extract, convey, refine and distribute AND it is vital to our entire life.

Coca Cola does not have a fraction of the utility and performance of oil.

And yet, I have never seen anyone railing against the profits made on Coca Cola.

The second thing is that few are prepared to pay a commensurate price for oil. If society was ready to accept and deal with the real cost of oil, the corresponding reduction in consumption would result in much less  feverish exploration and exploitation.

I grant you that if oil should be sold at its real price, the entire spectrum of human activity would be curtailed too leading to a less frenetic exploitation of the environment in one fell swoop going a long way towards improving the climate change picture.

But who are we kidding right?


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