Say Goodbye to Cheap Oil | Green Energy News

May 2, 2004 – Vol.9 No.6

SAY GOODBYE TO CHEAP OIL?

U.S. Federal Reserve Chairman Alan Greenspan, expanding beyond his expertise in juggling the nation’s money supply, said in a speech at the Center for Strategic and International Studies that the world must get used to permanently higher prices for crude oil and natural gas.

Greenspan noted that the reason for higher crude oil prices was presumably due to fears of long-term supply disruptions in the Middle East. The continuing high cost of natural gas would be primarily due to a supply and demand problem in North America. (Demand is high and domestic supplies are dwindling.) He said that high prices paid for natural gas are making imported liquefied natural gas more appealing to resellers.

Greenspan apparently did not mention that the rapid economic growth of China, and other nations, is straining oil supplies (thus also increasing prices) nor that oil exploration companies are no longer making large discoveries.

His comments also came before the revelations surrounding the Prisoner Abuse Scandal, still evolving. Those revelations are expected to further inflame anti-American sentiment in the oil-rich region, with unknown consequences.

The American Wind Energy Association (AWEA) also noted that the Chairman did not mention that more wind capacity would relieve the strain on natural gas supplies used in power generation.

The AWEA estimates that the 6,374 megawatts of installed wind capacity is saving approximately 0.45 Bcf/day (billion cubic feet per day) of natural gas and that 30,000 megawatts of new wind capacity, if brought online by 2007, would produce as much electricity as 3 bcf/day thus further relieving the strain on natural gas supplies. Visit the AWEA at http://www.awea.org/ .