High Oil Prices Rock the Globe

Although the effect of soaring oil prices is generally discussed at a local or national level, the fact is that it's affecting every corner of the globe. And though you're most likely to hear about how if affects gasoline, diesel fuel, and airline ticket prices, the effects go much deeper indeed.

The Ripple Effect of Soaring Energy Prices

When the price of petroleum rises, so does the price of all products which use oil components as ingredients. Synthetic fabrics? Going up. Plastics? Up as well. Even the already high price of blood used in transfusions is getting ready to soar. You think the price of your health care insurance is steep now? Get ready for a shock.

Add this cost of finished goods and services to the rising cost of distributing them and you start to get some idea of where we're headed. It's not pretty.

Asinine Technology and Environmental Restrictions

Here in the U.S., we face an ornery set of challenges. First, the liberals won't let us drill our own resources. They also won't let us increase our refining capacity; they hamstring us with regulations that only a politician could dream up.

Take the Lyondell refinery on the Houston ship channel for example. It's mind-boggling how much of its infrastructure is mothballed. The existing equipment is old and patched for the most part, although a new unit for producing low-sulfur gasoline was built recently. (This refinery handles most of Venezuela's extremely sour crude.)

Global Petroleum Ramifications

But the problem is global. In England, residents are finding it increasingly difficult to heat their homes. In France and Spain, fishermen and truckers are blocking roads in protest.

Meanwhile, in Asia, protests are erupting daily. Korean Air, feeling the pinch, has announced plans to cancel flights on twelve international routes. Three Chinese cities have had to begin rationing diesel fuel.

South Africa has its own woes. The government has increased the price of gas by thirty three per cent, and the price of diesel has soared by 49 per cent. Diesel fuel is used extensively in heavy industry and farming.

Aid organizations, always crucial to the survival of one part of Africa or other sees no way out but cutting some of its services.

Is There a Solution?

The question now is what must be done to avoid a global flash point. While the Saudi Arabians sit grinning in their palaces, refusing to increase production and let the law of supply and demand take effect, some oil-less Arab nations are getting hammered as hard as the rest of us. And they're loosing patience with their neighbor.