Price of Crude Tops $100

Well, Crude finally broke the 100 dollar barrier! This is actually good news for alternative fuels. If it can stay above it, then we will see some real innovation and adoption of alternative fuels result. OPEC is making the same mistake again by letting the price of oil get this high. In the late 70s, the price of oil was up to about what it is now(over $100/barrel in today's dollars) and the US reacted. We insulated our homes, we got better mpg's, we lowered our speed limit, we made more efficient appliances, and we effectively lowered our energy use. The result was an oversupply in the crude market, and eventually lower production. When OPEC lowered the price, the US didn't pull out the insulation or go back to less efficient appliances. All the energy savings that we did actually did make a difference, and OPEC had to wait for demand to ramp back up. You can see this on this graph prepared by the Department of Energy.
It did finally, especially when China and India began to come online.

This price level makes it profitable for all types of alternative fuels. It also makes 2-3 trillion barrels of harder to get to oil resources financially viable also. The good news is much of these harder to refine oil resources are in the western hemisphere, so the major source of oil will change over time if the world continues to rely on fossil fuel.

Anyway, I have added a crude oil price indicator to this blog, so you can easily see the price and see the incentive this will have for alternative fuels. Of course, the other driver for alternative fuels is our environment, I will be looking for an index that will show that as well, if I can find a viable indicator. Any thoughts on what we should watch will be appreciated.