Not that I'm an expert, but I'm still not convinced that speculation is driving up oil prices. According to the NY Times, a recent federal task force report
stated that "oil consumption grew 3.9 percent between 2004 and 2007. At the same time, oil supplies lagged that demand, with production growth from nations outside the Organization of the Petroleum Exporting Countries slowing to levels well below the historic averages." For other skeptical views (some of which I posted earlier), one can look here
, and here
But even if speculation were having some effect...so what? Our reliance on oil is a bad thing. It's bad for our foreign policy. It's bad for our troops who have to protect supply lines. It's bad for our economy. It's bad for the environment.
Economists have said that people will change their behavior when the price of gas is high enough to matter. Now it is, and people are. Those who can are buying more efficient vehicles. SUV and small truck sales are plummeting. Those who can are shifting to mass transit. Those who can are carpooling. Miles driven is dropping. And these things are bad?
Yes, there are households that have no choice but to spend upwards of 15% of their income on gas. They should not have to bear that burden. But surely there must be a way of helping those in need without removing the most powerful incentive to get the rest of us doing what we should have been doing over a decade ago.
Two-thirds of our oil is imported, and most of it goes to transportation. If we only drove the cars Europeans drive, we'd cut oil imports dramatically. New CAFE standards set fuel the new fleet efficiency average at 32 mpg by 2020; the Europeans are at over 40 mpg today. Right now. So it won't take new technology; it just takes different choices.
If we just use less oil, the price will go down too (or at least won't go up as much as it would with demand from China and India expected to increase anyway). And if the price of gas goes up 40%, you don't pay any more to drive the same number of miles if your next car is 40% more efficient.
Someday we're going to have to decide whether we're serious about dealing with our oil problem. To me, looking at the speculators is a distraction from this decision, whether or not they're affecting oil prices. The further this can is kicked down the road, the greater the pain when we finally have to deal with it.