Blowing past 100

Past 100 dollars US per barrel of oil, that is. I made the forecast to some friends early this year that we would see $100 oil by the end of this year. It seems that that day has arrived—or shortly will arrive. Apparently the message of ever higher-priced oil is finally beginning to penetrate the global mind. Not a minute too soon.

As one indicator, the Tokyo auto show, just ended, had a number of green cars in it. These included a 400kg plug-in hybrid Toyota 1/X and an innovative all-electric Nissan Pivo with a 360-degree revolving cabin and wheels that can turn 90 degrees to slide directly into parking places. Of course, you can’t actually buy one of these yet. Maybe in a few years.

So what can you do now while gas prices continue their inexorable climb and the interest portion of your adjustable-rate mortgage follows suit? As you probably already guessed, my advice is to begin telecommuting or increase your frequency of telecommuting now. The barriers to telecommuting are lowering every day, both as all kinds of technological improvements make it easier and less expensive, and as supervisors become more comfortable with the concept of distributed work and workers.

Some may argue that the price of gas will surely come down since the summer vacation season has gone south. That may be but please keep in mind that the long term trend is unavoidably up as oil supplies dwindle and demand increases. Hundred dollar oil is just a milestone on the way to higher prices. Just for your own amusement you might want to revisit JALA’s cost benefit analysis, trying fuel prices at $3, $4, $5, $6, etc. per gallon to see the impact on your bottom line. Is getting to and from work tapping your wallet for more than $1,000 annually? It may be time to think it out again.

Maybe you might want to look at the problem from another direction. Much of every hike in the price of oil redounds to the benefit of countries (Venezuela, Russia and Iran, to name a few) that may not be the best friends of the world’s most avid consumer of oil. Their costs of production are relatively stable so the primary result of increased oil prices is increased profits to them. So think of your SUV as a way of saying “thanks” to Messrs. Chavez, Putin and Ahmadi-Nejad. I’m sure they appreciate your support.

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