Newt tells it how it is: This crisis was caused by politicians. He tells how to reduce fuel costs in the short run, and the long run. “you want energy now” he tells us. And then he tells us how to get it.
How do we solve the energy crisis? Answer. Let businessmen extract oil. Drill here. Drill now. Pay less.
The energy crisis happened because of optimistic projections – that gas to liquid and coal to liquid would not be needed until the technology had been improved and the cost brought down, that the dramatic growth in China and India could be accommodated by rapidly expanding conventional oil production. (more…)
There is an oil crisis, and there is a food crisis. People in Haiti are eating dirt. Women are giving their babies away to random strangers. People who formerly were poor, and able to afford little more than enough to eat, now are unable to buy enough to eat.
I, of course, am more worried about the oil crisis, but the food crisis is probably more important.
Becker says that food prices are not going to be a problem
the second reason for optimism relates to the lower productivity of food production in the poorer parts of the world relative to the United States and other developed countries. Higher food prices will induce an increase in productivity in developing nations by encouraging greater use of machinery, fertilizers, and other forms of capital.
In fact of course, the problem with food is the same as the problem with oil. In most of the world if you apply machinery and so forth, your tractor is probably going to be stolen, and you yourself quite likely killed in the process, just as if you drill an oil well, your oil rig is probably going to be stolen, and you yourself quite likely killed in the process.
It would be hugely profitable to drill new oil wells in Iraq, and upgrade and maintain existing oil wells, but no one is doing it for obvious reasons. Similarly for drilling water wells and digging irrigation ditches in Iraq. Whenever you ask businessmen why they are investing gigantic sums in Alberta oil sands, and not investing elsewhere in the world in oil that is far easier to extract, they will tell you.
Tractors are just as attractive to tyrants, demagogues, and terrorists as pipelines are.