OIL PRICES, CONSUMPTION CONTINUE SLIDE

An article by Neil King, Jr. of the Wall Street Journal should have conservationist Americans dancing with joy. However, only half the story is actually good news. If these prognostications are true, then the West has some measure of hope of curtailing those runaway oil prices that help cripple our economy this past year. However, the general wisdom that oil prices need to be at a certain level in order to fuel exploration of other energy resources needs to go the way of $140 a barrel oil prices.

Because this week's outlook also included news that the frackas between Russia and the Ukraine has interrupted the delivery of energy resources to Europe, this is not the time for a return of the freewheeling energy glutton America had become. The United States cannot continue to delay its search for viable alternative fuel technologies. The following article and the news out of Russia are testament to the cold hard fact that we need inependence from our energy masters. King writes:

The global downturn is thwarting efforts by Saudi Arabia and other big oil exporters to prop up prices of crude amid rising supply and dwindling demand.

Big producers in the Organization of Petroleum Exporting Countries have struggled for months to keep pace with global economic woes, which have sent oil prices down more than 70% since July.

The world's biggest oil exporter, Saudi Arabia, tried to nudge the market up this week by announcing plans to cut output to its lowest level since 2003—around 7.7 million barrels a day, which would put its production roughly two million barrels a day from the summer. Other OPEC members, including Venezuela, are calling for another round of cuts when the group meets next in March.

Global economic woes continue to trump OPEC actions amid signs of weakening energy demand in almost every corner of the world. Reports of rising crude stocks and falling retail sales in the U.S. drove oil prices down again Wednesday, with U.S. benchmark crude settling at $37.28 on the New York Mercantile Exchange, down 1.3% from Tuesday.

OPEC's 12 members last month announced the group's largest supply cut—2.2 million barrels a day—after pledging to cut two million barrels a day in the autumn, when the slowdown began to take hold. OPEC produces about 40% of the world's daily oil needs, which now run around 84.5 million barrels.

OPEC officials expressed concern that the market thus far has been unaffected by the cuts, which have been more disciplined than many analysts predicted. OPEC officials say they hope the cuts will begin to register soon and help drive prices back above $50 a barrel. But pessimists within the cartel say continuing bad news could drive prices well below $30 a barrel in coming months.

Saudi Oil Minister Ali Naimi, speaking at an oil conference Wednesday in New Delhi, said prices had fallen below the level warranted by market fundamentals. The oil market, he said, needs prices that "encourages investment, helping create a climate conducive for the development of all viable energy sources." Mr. Naimi recently put that price at $75 a barrel.

Nonsense. Development of new technology does not compete with oil production. Delivery of those technologies may one day compete, but that is no reason to delay the process of finding and perfecting an alternative to oil. If oil did not exist, what then? This general economic wisdom is bunk. Thomas Edison's perfected electric light technology was to compete with gas lighting, but buildout costs were enormous.

The battle between electric and gas lighting lasted some 30 years, and although advances were made in gas-lighting technology, electricity won out. During that time, the Cleveland OH City Council, viewing comparative costs, voted to go back to gas light in 1883 but reversed itself 17 days later. About the time that Brush was developing his arc light, Thomas Edison designed a practical incandescent lamp which later had great significance for Cleveland, because the companies that formed the National Electric Lamp Assn. in 1906 centered much of their light-bulb production in this area. When NELA became the National Quality Lamp Division of GENERAL ELECTRIC CO., it established Nela Park in the suburbs. The division took the leading role in GE’s incandescent lighting development program from 1915 until 1935, when fluorescent lighting research became prominent.

For years, the world's oil surplus was negligible. This year, OPEC's spare capacity is expected to surge to around four million barrels a day, according to the U.S. Energy Department. In 2009, global oil demand will fall by 800,000 barrels a day—the sharpest retreat since the recession of the early 1980s, the Energy Department predicts.

Gasoline demand is down almost 4% in the U.S. from a year ago, despite the drop in fuel prices. The U.S. is now importing about 750,000 fewer barrels a day than it did last year. Yet crude and refined-fuel stockpiles rose by 9.8 million barrels last week, the Energy Department said Wednesday. Stockpiles at the country's main delivery point for U.S. crude in Cushing, Okla., are at record highs.