Oil hits $75.78 - no relief in sight and the Chinese join us as energy hogs

CNN Money reports that oil hit $75.78 /barrel last Friday. So what will we do about it?

Hey, It's not just us any more - tkae a gander at Chinese consumption.

Chinese consumption is growing at about 500,000 barrels a day each year versus growth of about 200,000 in the United States, according to Tertzakian.

By 2030, EIA estimates China will use 15 million barrels a day.

That's no doubt helped by China's new-found love for the automobile. Just Monday a news report said car sales in the country surged nearly 50 percent in the first half of 2006.

But there's more. Growing demand in other developing countries, notably India, the lack of big new oilfield discoveries, and the soaring cost of getting oil out of the ground are a recipe for sustained high prices.

Tertzakian said most people just won't make the necessary sacrifices to significantly cut energy use. Prices would have to rise to a level that would trigger a global economic recession, which itself would reduce demand.

Instead, he said, barring a drop in prices from a recession, people will simply deal with paying more, hobbling along until a new energy source or sources begin to replace oil, a transition process that he said was just starting and could last for decades.

Who wants to bet on recession?

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