If you are wondering why gasoline is stuck between $3 and $4 per gallon or why the USA needs to use more substitutes for oil like natural gas and biofuels to protect its economy, look no further than this fact:
The Rolling 12-month Brent crude oil average has reached a record high of $109, according to calculations done by JBC Energy and as reported by Liam Denning in yesterday's Section C of the Wall Street Journal.
The previous record was $106, reached in September 2008, and was set right before the Lehmann Brothers bankruptcy triggered a massive financial crisis that plunged the world to the edge of depression and pushed oil prices to about $30 by December 2008. Daily world oil prices peaked in July 2008 at approximately $147.
While today's daily oil price is well below the July 2008 daily peak, the average oil price over the last 12 months has never been higher.
The record high oil prices come at the same time that natural gas prices in the USA are at very low levels, with the spot market in the low $3 range and the January 2012 contract around $3.50 for a thousand cubic feet.
Shale gas has made natural gas in the USA a bargain and prevented a big, broad energy shock that would have pushed the US economy back into recession during 2011. But oil prices are showing the impacts of steady upward pricing pressure, and our continuing oil addiction poses multiple threats to the USA.