I’m being called to the arena by a Talkbacker named Right of Smart. So here’s my response:
Oil companies know the American public is willing to spend only so much on gasoline, much like the health insurance industry knows their customers can spend only so much on coverage. If prices go too high, oil companies lose customers, and then they don’t make profits, so while a war with Iran may spike gasoline prices, it won’t go so high as to cripple the American economy.
Of course the American economy is dependent on oil. That’s the problem I’ve been writing about in previous posts: It’s too dependent. Let’s consider France, for a moment. Nearly 90 percent of electricity produced in France comes from nuclear power plants, which sounds nice except - what if the industry suffers a catastrophic event? The lack of diversity in France’s energy needs ought to be cause for concern. There’s a parallel with how America fuels its transportation. Diversifying how we fuel our cars would insulate the American economy from skyrocketing prices in one sector, in this case oil. Let’s say one third of American drivers use gasoline, another third uses natural gas and the last third uses electricity. Now, let’s say Venezuela decides to cut the United States off from it’s oil supply while at the same time a major war breaks out between Iraq, Iran and the United States. Gasoline prices soar domestically because the available supply drastically reduces while demand remains the same. One third of drivers would face financial hardship, but the other two-thirds remain insulated from the crisis.
It’s a no-brainer that we need to diversify our transportation fuel. If you’re an investor, you wouldn’t want all of your money in one stock because if that company crashes, you’ve lost all your money. You want to sink your money into a bunch of different stocks and different business sectors to avoid a financial catastrophe. We’re seeing now the consequences of failing to diversify how we fuel our cars and trucks.
Heck, why not allow your car to use several different kinds of fuel? Why not create a car that uses battery power to travel 200 miles, and afterwards gasoline kicks in to power your vehicle the rest of the way? Once you’re home, you plug your car into an outlet to r-charge the battery. If you commute to work 50 miles a day, you would only need to fill your gas tank up if you decide to drive far for vacation or to run chores. You could save about $50 a week, $200 a month, $2,400 a year.
So while we wait for such diversity to take place, $700 billion in American money goes to foreign countries, many of which just don’t like us.
