Everything old is new again...

Nope, not a Bob Fosse musical, but life repeating itself. For good or bad I've seen the same energy cycle repeat itself three time in the 70's, 80's and now again. Energy prices soar, become a noticeable part of the family budget, then crash back down. Each run-up in energy prices has been followed by a deep economic downturn that lasts several years.

So here we are today in RI with gas selling for $2.51 or lower. It's the first time that prices today are lower than they were a year ago too, so the fall has been fast and steep.

Now of course that is good news with winter around the corner. But --- the local utility is refusing to cut their budget breaking energy prices (already the highest in the nation and set to go up to $0.19 per KWh in two weeks). They want to wait to ensure the reductions "will last". And many oil customers have found themselves locked into oil prices of $4.50 to $5.00 a gallon, when the spot market price of home heating oil has dropped below $3. So the energy costs won't be reflected in anyone's bill except natural gas customers (projected to be about 40% lower than last winter).

Of course the relaxed energy costs have followed the loss of trillions of dollars in the financial system. I understand that the "core" of the financial meltdown was the housing market in North America -- a well intentioned social program that backfired when the Fed started raising interest rates and sub-prime borrowers could no longer pay off their loans. However, it appears that energy costs may have been grain of sand that tilted us over and caused everything to crash down.

That said, the real tragedy of this entire situation may be the focus will shift from America's long-term energy policy to short-term fixes for the financial system. Falling energy costs take pressure off our need to develop additional stop-gap traditional sources and newer emerging technologies. For the most part this guarantees that America will be ill positioned yet again a decade from now rather than being energy independent. More money is guaranteed to flow out of the country to balance the trade deficit, and more lives will be put in harms way as rouge nations are empowered to do harm as a result of their control of petro dollars.

I'm happy that people may pay less this year to stay warm, but I'm saddened to think that we will be in this same position in the year 2020.