American motorists are a hardy lot. The price of gasoline goes up and up and up and gasoline demand keeps nudging up, too. That has defied the expectations of most big oil companies and it suggests that driving is an essential, not discretionary, task and that prices could keep on rising.

But Aspen, Col.-based consultant Philip K. Verleger thinks he has detected signs of change in California. By looking at the records of the California Franchise Tax Board, Verleger notes that the sale of gasoline fell an “astounding” 4.5 percent in January 2008 versus January 2007.

Continue »

Today I received a "Hello Steve" letter from a representative of the Nigerian militant group Movement for the Emancipation of the Niger Delta (MEND). This is the group -- or more likely umbrella of local gangs and groups -- that has been blowing up pipelines and terminals and occasionally kidnapping expatriate oil workers in Nigeria in an effort to wring more oil revenue for impoverished local inhabitants. (For more background, here’s a Post story on the long-running Nigerian insurgency.)

Continue »

As I said in my previous post, a gasoline tax holiday wouldn't make much, if any, difference in the price of gas at the pump. But if it did lower prices, the U.S. would be joining much of the rest of the world in helping keep demand artificially high. That's a recipe for fiscal disaster, and it distorts the market in disturbing ways.

Many countries - especially in the developing world -- are actually directly subsidizing fuel prices. In the name of helping their citizens cope, they are subsidizing energy waste, subsidizing an addiction to imports, and subsidizing the growth of greenhouse gas emissions.

Of course, as oil prices rise, so do the costs of these fuel subsidies. Many of these countries are also trying to hold food prices steady as the prices of global food commodities soar.

Continue »

The idea of a gasoline tax holiday might make good politics, but it surely doesn't seem like good policy. Most economists will say that it would be bad energy policy, bad tax policy, bad urban policy and bad climate policy. And gas prices won't fall much in the end, anyway.

Some background: Sen. John McCain (R-Ariz) on Earth Day proposed to suspend the 18.4-cent-per-gallon federal excise tax on gasoline for the summer because of high pump prices. Today Sen. Hillary Clinton (D-N.Y.) matched McCain's proposal, evidently hoping to appeal to Americans livid about the record price of gasoline as the summer driving season approaches. (The Energy Information Agency said today that the U.S. average retail price for regular gasoline jumped 9.5 cents a gallon over the last week, to a new high of $3.60 a gallon.)

But does the tax holiday proposal make any sense?

Continue »

We Americans tend to have short memories when it comes to economic problems (among other things), so it's probably worth taking an occasional look backwards to illuminate the present.

On Nov. 1 last year, a group called Securing America's Future Energy ran a game-playing
exercise with nine mucky-mucks like former Treasury Secretary Robert E.Rubin, prize-winning author and consultant Daniel Yergin, former deputy Secretary of State Richard L. Armitage and Gen. (Ret.) John P. Abizaid. The goal: to dramatize the risks of a price shock if some unexpected event threatened world oil supplies. The scenario: unrest rocks Azerbaijan and an explosion cuts off a million-barrel-a-day pipeline. The scenario was called "Shockwave" and
it envisioned an urgent meeting of the National Security Council to deal with the "crisis."

And what was the price of oil during this hypothetical crisis? $115 a barrel - slightly less than the current price.

That brings to mind one lesson and one question.

Continue »

Tech stocks, real estate... crude oil? Has the oil market become the latest of a series of financial bubbles, fueled by low interest rates and cash sloshing around in search of quick returns? Probably.

But even a bubble can keep floating for a while if enough people keep pumping it up, and it looks like that is what individual investors and financial wizards at pension funds are doing by injecting more and more money into commodity funds. Guessing when oil prices might fall back to earth is a treacherous business; Wall Street is littered with analysts who said prices would drop $20, $30 or $40 ago.

Continue »

Was there ever a better time to launch a provocative conversation about our energy future?

Oil prices are smashing records, mining companies and environmental groups are squaring off over the future of coal plants, food is being tied to fuel, the long-dormant nuclear industry is stirring, and renewable forms of energy are growing fastest of all as climate change concerns mount. Change is coming to the energy industry and it is taking many forms.

I am the Washington Post's energy correspondent and I have been focusing on the sprawling intersection of energy and politics. That's led me to write about everything from Kansas coal plants to Kurdish oil contracts, from carbon trading in Europe to horse trading on Capitol Hill, from Gazprom's tactics on gas to OPEC's tactics on oil.

No other industry marshals as much capital, generates as much profit, draws as much public ire, or plays as vital a role in the world economy.

Now the Post is going to expand my mission to open up debates and conversations with readers like you while providing some additional insights and commentary, interviews with leaders of the energy industry and links to other resources. We're looking for comments, arguments, or insights from readers in an animated, yet civil, spirit that will help us all come away with fresh thoughts or understanding about energy.

I bring a variety of experiences to this conversation. I covered the domestic oil and gas industry for The Wall Street Journal in the early 1980s. I visited oil rigs offshore Angola and traveled with oilmen trying to make friends in Sudan. I also lived in Houston for a few weeks. Later I covered Africa for the Journal and then for Business Week.

I have been at the Post since 1989. During that time, I have covered Wall Street, economic policy and diplomatic policy. I was the Post's Beijing correspondent from 1994 to 1998. I also did a stint as deputy editor of the weekly Outlook section.

Please join us regularly to get your energy fix, and to explore the world's energy future.