TCS Daily

'Nobody Knows Anything'

By Brock Yates - April 11, 2003 12:00 AM

If you're confused about what's going on with gasoline prices join the club. Charter members appear to be the staff of the Wall Street Journal. They have been bungee-jumping over these issues for months; one day fretting that gasoline at the pump will gusher over two dollars a gallon, then worrying about an oil glut and plummeting prices the next. (Example, April 2nd: "After Preparing for an Oil Shortage, some in OPEC Now Fear a Glut." The following day a page-two story titled "Gasoline Imports Critical but Costly" stated that gasoline prices are likely to "become more expensive for consumers.")

And what is the point? Nothing, other than to remind the world of screenwriter William Goldman's wisdom regarding the movie business but applicable to all forms of commerce: "Nobody knows anything."

We are essentially blind when soothsaying beyond educated guesses about tomorrow's weather. Example: two years ago it was widely predicted that the Ford Motor Company would overtake General Motors as the largest seller of automobiles in the American market. Today Ford is a basket case - theoretically bankrupt according to some Wall Streeters - and slumping far behind rejuvenated GM.

Aside from analysts' understandable myopia concerning natural disasters and international crisis situations like 9/11, one simply cannot divine either political or cultural trends.

Over the years how many self-proclaimed experts predicted the rise of Al-Qaeda, the career implosions of Trent Lott and Michael Jackson, the booming popularity of NASCAR and reality television, the schism in the United Nations, major airline bankruptcies, the Internet revolution, and most recently the farcical collapse of the Republican Guard?

Note, too, the idiotic prognostications of the retired brass who the Vice President so artfully described as being "embedded in television studios." This bunch, with a few notable exceptions on Fox News, was dead wrong about almost everything relating to the war.

One recalls several years ago when this same cabal of experts warned that our turbine-powered Abrams M1A battle tanks would fizzle in the desert. Too much sand in the air for their sensitive turbine blades was the cry. So too for our turbine-powered helicopters. Our Bradley troop carriers, with their aluminum bodies, would also fall victim to all sorts of small arms fire.

Amazingly, our American defense industry (war-mongering profiteers that they are) solved the alleged problems and our mechanized Army, Air Force, Marines and Navy have worked flawlessly. Of course these spinning turbines (including our ultra-sophisticated jet engines that serve as the main propulsion units of our Navy ships, excepting the nuke-powered carriers) gulp insane amounts of JP1 petroleum-based fuel.

One would think the Iraq war alone would spike gasoline prices. Yet crude oil, which zoomed to $40 a barrel weeks prior to the hostilities, is now about $28 a barrel and falling. This apparently is the result of Saudi Arabia increasing production and the settlement of labor unrest in Venezuela, where output is now near-normal levels. The political and ethnic violence that slashed Nigeria's production appears on the verge of settlement while the prospect of a revitalized Iraqi oil industry lies in the relatively near future. Oil shortage? I don't think so.

Surely somewhere a think-tank geek it totaling up the millions of gallons of crude consumed in the war. The findings will only amplify the reality that when serious movement around the planet is required, be it on land, sea or air, there is no substitute for oil. All propulsion devolves to fire in a can, be it an internal combustion engine, a jet or a turbine.

This remains true despite the recent recommendations by the Senate Energy and Natural Resources Committee to unload $2 billion toward fuel cell research (to join the hundreds of billions dropped into a very dry hole in search for a cure to the common cold.). Fuel cells at this point are a feel-good panacea akin to the recent Hollywood celebs' fatuous chauffeur-driven rides to the Academy Awards in Toyota Prius Hybrids.

While the major media quivers with anticipation over the miracle fuel cell, they only serve to blur the reality surrounding the long-term need for oil as an elemental power source for a mobile society. The sooner we accept this harsh truth and proceed with sensible policies to consume it wisely and efficiently, the sooner the world markets will stabilize.

No matter, unseen future variables will no doubt send the analysts into more gyrations trying to divine gasoline prices. They will produce lengthy treatises on the subject for investors that will contain these elemental verities:

  1. Gasoline prices will go down, depending on demand.

  2. Gasoline will go up depending on demand

  3. Gasoline will tend to cost more in California because of special, low-emission refining process.

  4. Gasoline will power your automobile at least until Chelsea Clinton's second term in the White House.

  5. William Goldman is the smartest man on earth.

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