Here in Iraq, I’ve had interesting conversations over the past few days with some of my soldiers. Those exchanges illuminate the problem we face in getting people to understand the gravity of our energy situation. The guys I was talking to are some of my better soldiers; they’re savvy, intelligent, and aware of international issues. We started talking about energy, and the issue of an eventual peak of crude oil production. Most of them didn’t have a problem conceptually understanding that there would someday be a peak and then a decline. But when it came to contemplating and understanding the consequences of that eventuality, there was intellectual disbelief. In their minds, there are too many ‘obvious’ alternative solutions.
The first step would be to acknowledge what a sorry state we’re in. Speaking with Bill Moyers back in September, Kevin Phillips didn’t think soon-to-be President Barack Obama would level with the American people about how bad things are. If the President indeed understands the depths to which we’ve sunk, he has not come clean with us—you don’t rock that boat.
Natural gas prices increased 39 percent from a 6 ½ -year low of $3.19/MMBtu on April 27 to $4.42 on May 13, 2009. Some think that the worst of the price collapse that began in July 2008 is over, and that gas prices will return to normal. I do not believe that is the case, though I certainly hope that I am wrong. Chesapeake Energy proclaimed in a recent investor presentation that “the fix is under way”, and that natural gas prices will soon return to $7-8/Mcf. Chesapeake and other companies make the case that prices will rebound because of the drastic decrease in drilling.