Gas Prices Drop Below $2

Go Lean Commentary

This is one of the year’s biggest economic stories; Gas Prices have dropped below $2.

The OnCue Drive Thru in Oklahoma sold gas for $1.99 a gallon Wednesday, a trend that many U.S. drivers are hoping will spread. – Published December 3rd 2014, 6:52 pm


It’s worth appreciating what’s going on here. The Power Player in this story is the Organization of the Petroleum Exporting Countries (better known as OPEC):

OPEC – a cartel of [12] oil producers that include Saudi Arabia, Iran, Iraq, and Venezuela – had a big meeting in Vienna on November 27. Before the gathering, there was speculation that OPEC countries might cut back on their own oil production in order to prop up prices. But in the end, the cartel couldn’t agree on how to respond and did nothing.

Oil prices promptly nosedived, with the price of Brent crude now hovering around $70 per barrel.

As recently as the summer, that price was over $100 per barrel.

CU Blog - Gas Prices Drop Below $2 - Photo 1

At this big meeting in Vienna, there was a lot of heated debate among OPEC members about how best to respond to this current drop in oil prices. Some countries, like Venezuela and Iran, wanted the cartel (mainly Saudi Arabia) to cut back on production in order to prop up the price of oil. The reason is that these countries need high prices in order to “break even” on their budgets and pay for all the government spending they’ve racked up:

CU Blog - Gas Prices Drop Below $2 - Photo 2

Source – Brad Plumer of Posted November 28, 2014; retrieved December 4, 2014 from:

OPEC is an international intergovernmental organization and economic cartel whose mission is to coordinate the policies of the oil-producing countries. This structure aligns with the book Go Lean… Caribbean, a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). This calls for the confederation, collaboration and convention of 30 member-states into one intergovernmental organization. The same as OPEC does for its 12 oil-producing nations – a proxy agency to represent all members – the CU seeks for the Caribbean region. But instead of elevating oil prices, the CU coalition has these 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus, including energy security, to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The goal of the CU is to optimize Caribbean society, allowing us to better compete globally and hopefully present more favorable options for our youth here in the homeland. (Previous generations sought refuge abroad).

The goal of OPEC is to secure a steady income to the member states and to collaborate in influencing world oil prices through economic means. Though this charter seems fairly benign, the reality of OPEC is vastly different; they have emerged as a monstrous entity! Autocratic leaders of OPEC countries – think Saddam Hussein – would constantly urge pushing world oil prices up; their claims were to help all OPEC members financially, but their motivation were purely nationalistic. The public view of OPEC now coincides with this dialogue from a movie, “art imitating life”:

“It can’t be bargained with, it can’t feel pain or mercy, and it will stop at absolutely nothing until you are dead!” – Movie dialogue from The Terminator (1984)

OPEC is not a monster, just protective of its own self-interest; many of their member-states feature a mono-industrial economy; it’s oil or bust! Plus, with 40 percent of global oil production, they do wield some power, influence and control of the eco-system of crude-oil pricing. But their power-influence-control is not absolute; there are always the laws of Economics!

Back to the foregoing article, the fact remains that oil prices were falling well before OPEC’s Friday announcement; this change was driven in large part by factors from Economics 101: less demand + higher supply = lower prices. In this case, economic slowdowns in much of the world have dampened demand, as supply has expanded considerably, especially within the U.S.

This premise directs the Energy Policy as communicated in the Go Lean book: the Caribbean region must lower crude oil demand.

This Go Lean/CU roadmap recognizes that modern life has expanded the definition of basic needs to now include food, clothing, shelter and energy. And thusly the book proposes many solutions for the region to optimize energy generation, distribution and consumption. No “stone is left unturned”. Go Lean posits that the average costs of energy can be decreased from an average of US$0.35/kWh to US$0.088/kWh in the course of the 5-year term of this roadmap. (Page 100).

Primary to this strategy of lowering the demand for crude oil is increasing options with alternative energy sources: natural gas, solar, wind and tidal. This will translate to more electric, hybrids, and fuel-efficient vehicles. The CU is a strong proponent of compressed-natural-gas vehicles (buses, trucks and passenger vehicles).

Lowering demand for energy works in lowering the costs.

In the US, the Obama administration’s improved fuel-efficiency standards have ultimately affected consumers, in that they are using less gas: “The sales-weighted fuel economy of vehicles in the U.S. increased from 20.8 miles per gallon in 2008 to 25.3 miles per gallon in 2014.” Other countries share the same experiences.

The Go Lean roadmap details a series of community ethos, strategies, tactics, implementations and advocacies to foster the progress in the wide fields of energy generation, distribution and consumption. The following list applies:

Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos – Cooperatives Page 25
Community Ethos – Regional Taxi Commissions Page 25
Community Ethos – Non-Government Organizations Page 25
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Improve Negotiations Page 32
Anecdote – Pipeline Transport – Strategies, Tactics & Implementations Page 43
Strategy – Harness the power of the sun/winds Page 46
Tactical – Fostering a Technocracy Page 82
Tactical – Separation of Powers – Energy Commission Page 82
Anecdote – “Lean” in Government – Energy Permits Page 93
Anecdote – Caribbean Energy Grid Implementation Page 100
Implementation – Ways to Develop Pipeline Industry Page 107
Implementation – Ways to Improve Energy Usage Page 113
Advocacy – Ways to Impact Public Works Page 175
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Ways to Impact Monopolies Page 202
Advocacy – Ways to Improve Transportation Page 205
Advocacy – Ways to Develop the Auto Industry Page 206
Appendix – North Dakota Oil Boom Economic-Societal Effects Page 334

This commentary asserts that energy needs are undeniable; and that OPEC may or may not be classified as a “monster”. The main take-away though is that monitoring and mitigating the realities of the global energy eco-system is a necessary role, a heavy-lifting task for the lean, agile operations of the CU technocracy.

So the message to the Caribbean region is clear: Help is on the way – the Terminator can be defeated – “life imitating art”!

Now is the time for all of the Caribbean, the people, business, institutions and governments, to lean-in for the optimizations and opportunities described in the book Go Lean … Caribbean. 🙂

Download the book Go Lean … Caribbean – now!

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