Le Sequoit

This Little Piggy Went to Market

Ah, supply and demand. That's the mantra. What fairer helmsperson could have ever stood to navigate us along the ebb and flow of economic reality? The market is the one integrous decideur of distributive method when it comes to the needs and wants of our society. Purity, it is.

Perhaps. It may seem, however, that the market can fail us miserably in times of crisis. Katrina is a crisis. Katrina has ripped us a new... er, window... in our national psyche in many ways. These ways will continue to multiply, as we are only beginning to come to grips with the enormous reality of a major American city for all intents and purposes needing―or perhaps not―rebuilding from scratch. This is a long, complexly unfolding story, but the subject today is natural gas prices.

47%. That's the latest number I am told that the average home heating bill will increase this year for natural gas customers. "Prices were already on the rise before Katrina," they say. "We want our cake and to eat it, too, limiting exploration while increasing our usage." the drillers lobby. "NIMBY's holler up and down every time we start talkin' 'bout importation facilities," cry the shipping giants about LNG tankers that would ignite buildings a third of a mile away and give second degree burns to exposed flesh up to a mile away, should they ignite.

"It's simple market forces, this 47% increase," harmonize the industry spokespeople.

In another of my uncanny timings, I was a gas station assistant manager during the oil embargo and "crisis" of the 70's. On salary, it was pretty cool to only be open three hours a day. Prices went from about 35 cents a gallon to over a dollar. People ran out of gas, mainly because we were only allowed to pump 3 dollars at a time. But the station never ran out of gas. The station averaged more gallons pumped daily than they had before. Deliveries went on, basically as before. Same supply, panic-driven demand. Arab oil up 66%. Gas up 300%. Hey, it's a free country, it's a free market.

Back to the natural gas. How exactly does demand increase dramatically―47%-jump dramatically―when supplies never actually run out? How does the demand of the end customer affect the supply and drive up the cost when everyone seems to be getting all the gas we need anyway? Are we not going to get gas this winter? Because, if that's the case, I would hope someone would be letting us in on that fairly soon, what with locally our first frost advisory coming up this week.

No, we're all going to get gas this year, and whether we can afford it or not. But while the upper middle class luxuriates in the celstory windowed, volume ceilinged splendor of the millions of 3,000 to 4,000 sq. ft. suburban barns they've "built" in the last 15 years, median class existence will again become just a little more difficult.

The "free market" at work here is of speculation, and in this or other crises increasingly fueled by emotion and hop-scotched along by pinch-me-I-can't-believe-my-own-good-fortune greed. This supply cycle is just another loop the average joe increasingly has no place within. It's a double whammy.

It's all about supply and demand. Their supply, and their demand.

posted by sequoit @ 9:24 PM