Oil Over $100! This May Be Just What the Doctor Ordered

The oil industry began in the 1850’s in an area known as Oil Creek in Northwestern Pennsylvania. Oil was cheaper and easier to bring to the market than coal or whale fat and quickly replaced both as the primary fuel for lighting and running machinery. Nearly one hundred and fifty years later, in the first trading day of 2008, the price of oil crossed over $100 per barrel, just shy of the inflation adjusted price of $102.81 hit in the late 1970s.

Since President Bush came to office, the price of oil has increased nearly 4 times. An enormous transfer of wealth has occurred during this period. The value of hydrocarbon exports from the Middle East and Asia is expected to be $750 billion in 2008. The Abu Dhabi Investment Authority, the government investment company for the United Arab Emirates, now has over $900 billion in assets and recently lent Citibank $7.5 billion with the right to purchase just under 5% of the equity shares. Other state owned Arab Emirates now own large stakes in the NASDAQ and the London stock exchange as well as other prized assets around the globe.

So how does the price of oil going over $100 help the US? It will increase the innovation in our country to find alternative sources of fuel. It will also increase our desire to purchase more fuel efficient products and ultimately it will reduce the US emissions of CO2 gas. Hopefully, future generations will look back at the “oil age” as just a short 200 year blip of time.