December 3, 2008

December 3, 2008

Hello everybody out there in farm country. This radio commentary is brought to you by the Renewable Fuels Association, Wal-Mart Stores, Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today's commentary-- I don't recall anyone predicting last June that by Thanksgiving oil prices would be below 50 dollars per barrel. From nearly $150 down to $50 -- no way!

What is this telling us? Are we to believe now that there is plenty of energy in the world? Two dollar gasoline is here to stay? I don't think so. Oil has gone up and come down before. Remember the gas lines of the 70's? I know that we are in recession now and that energy demand is soft. That explains the collapse in price. However, we're not going to stay in recession. Demand will be back and the price will go up.

The projections that I have seen offer a challenging story -- if the global economy grows at a modest 4.1 % rate to year 2030 (Just a little over 20 years from now), global energy consumption will more than double. How will we be able to satisfy the demand? Well, it can not be met by rejecting carbon fuels. In fact, petroleum, gas, and coal will probably still be providing as much as 80% of our energy. That isn't to suggest that biofuels, wind, and sun are insignificant. If they deliver 20% of our energy, they are essential. We need every possible source.

The time has come for the different industries that will be expected to fuel the engine of global business and commerce to work a little closer together.

I know the global wanning crowd wants to wean us away from carbon fuels. It's not going to happen. Get over it! Let's be realistic.

Some points to consider--

Just because prices have come down, we should not put on the shelf our priority to develop all sources of energy.

We need to encourage more energy efficiency.

Tear down the environmental barriers to development of domestic supply. "Drill baby drill." Build that nuclear plant.

Although total energy independence IS not possible, we can and should make ourselves less dependent on other countries.

Until next week, I am John Block from Washington.