As events continue to unfold on Libya, eyes remain glued on the Middle East — and oil prices.
Libya is different from Egypt. Forget that leader Moammar Gadhafi is clinging to power in a much more violent way than Egypt’s Hosni Mubarak; the nation is of interest for other reasons. Don’t get me wrong, Mubarak was no Boy Scout during his final weeks in power, but the difference that I'm alluding to is oil.
Bloomberg is reporting
that the Libya situation could lead oil prices to skyrocket to nearly $200 a barrel. This is just in time for winter’s end and the summer driving season in the United States. Nothing excites the American public like high prices at the pump. High gas prices have destroyed presidencies in the past. (See: Jimmy Carter). But beyond making or breaking political careers, high gas prices often result in recycled political arguments.
First and foremost, its likely the “drill, baby, drill’ crowd will be back. Their argument will simply be let’s drill here so we don’t have to subject ourselves to the uncertainties of Middle Eastern nations. Then there will be new rhetoric that we have to transition to alternative fuels altogether. The natural gas crowd (See: T. Boone Pickens
) will say it's time to retrofit vehicles to run on natural gas, despite increased reports that natural gas is no better for the environment than other fossil fuels. Of course, natural gas is domestic, and Libyan oil isn’t. Then there will be the argument that it’s time for the U.S. to pass an a real energy policy, in which all fuel sources will be harvested to free us from foreign energy problems but also do less damage to the environment.
These are the old arguments that a new Middle Eastern challenge raises. You'll hear old arguments, old concerns, old solutions — and most likely you'll get old results. But perhaps this is the time for the new energy economy to emerge as a realistic option. That would be as big of a change as democracy coming to Libya.
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