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$200 a Barrel Oil: It Could Go Much Higher!


I am recently back from a trip back to my home state of Texas, where former President George Sr. and Barb attend the Astros games and no one thinks twice about the adverts for Halliburton on the walls of the Minute Maid stadium (formerly known as the Enron stadium), unless of course, one happens to be able to see the situation from the outside as I now do, having lived abroad and in the Pacific Northwest for more than two decades. At the Astros play-off game, I sat listening to three young oil business executives talk in the row in front of me about pipelines, and off-short opportunities and I realized that the baseball game is a place of hand-shakes and back slaps and shoulder hugs, of good old boy greetings, which continue on the golf course, and make what is now a large cosmopolitan city, feel like the same small town I left more than twenty years ago.

"What recession?" might have been written on the t-shirts at the ball game that sultry evening in Houston. This is a city which laughed its way to the bank back in those late 1970s days when gas prices were high and people lined up at the pumps. The profits keep growing, and those who own both the mineral rights and the distribution systems are doing just fine. In fact, it is the very fact that the pipelines are full that is keeping the price high...there is oil in the ground, but there is no room left in the pipelines. Yet the demand from a growing middle-class in places like India and China keeps pushing the prices up and up.

Who would have thought that a small town on a malaria-filled swamp would come to play so powerful a role in the world? And the Bushes and oil companies are not finished yet...but now the reach of oil's potent grasp has extended into places which make Texas look like the Wild West with religion. Last December, I wrote about the oil situation and its links to Darfur and Iran on the HuffPost and included the following:

"The elephants in the room used to be Western oil companies such as Swedish Lundin and Canada's Talisman who divested their holdings in Sudan. Towns in Africa sported names such as "Chevronville." The new owners of these lucrative oil interests are Chinese, Malaysian, Indian and Russian. One third of China's oil come from the region. A minister in the UK recently told me that he had been briefed about the rise in oil futures being bought, with the expectation that oil would go as high as $200 a barrel within the next year to 18 months. The reason behind this would be that both Sudan and Iran would be off the oil market. One shudders to wonder how that will come to pass".

The Astros won that night. It was my daughter's first baseball game and she enjoyed it. Come to think of it, so did I. It was nice to be back home, even if Houston, that center of oil wealth and good ole boys, has a long way to go towards questioning whether or not it will evolve into a more modern economy. Perhaps the internationally re-knowned medical center and the new, cleaner uses of hydrocarbons, and all the biotech which goes with it, will create a city of the future worth living in. But until then, turn on the air-conditioning, and roll up the windows of your SUV, because Texas will be on the agenda long after the Bushes and the Cheneys and the Halliburtons are off the front pages. You see, all that money made by the good ole boys, translates as "it doesn't really matter who wins the next election"...because they will control so much for so long based on the wealth they stole from the American people.

And I can see that the entire United States, and the world, have now been subjected to the same trends I witnessed growing up in the Lone Star State...our local Bush dynasty went national, and international. Oil power and money is in the hands of people and governments I would not want to eat dinner with, much less ask to make important decisions affecting the future of the planet. Pay attention. I wouldn't be surprised if a barrel of Texas sweet crude reaches $400 before all is said and done.

Follow Vivian Norris de Montaigu on Twitter: www.twitter.com/vivigive