Energy Prices

A couple of weeks ago, and before Katrina, I suggested that current gasoline prices weren't historically high. Last Saturday I heard a radio program that said we currently spend 3.1% of our personal income on energy, compared to 4.5% in 1980. Inflation adjusted, the price of gas in 1980 was $3.07. Of course, the average car didn't travel nearly as far on a gallon as it does today.

We are increasing the energy efficiency of just about everything, and as Mike Williams reports, as the price of oil and natural gas goes up, so does the availability of energy of all kinds. The articles Mike relies on speak to increases in the affordability of other carbon based energy sources, but even wind, thermal, and solar become efficient with oil at $70 a barrel.

In other words, we will always have all the energy supply we could ever want, even with current technology. It is all about cost, and even that can only be responsibly evaluated as a percent of our total household or National or Worldwide income. Clearly, if the entire world were able to hit USA type numbers of only 3.1% of household income for gasoline, natural gas, and home heating oil, it would dramatically raise the affluence of the rest of the world. And the USA is doing that with oil at $60+.