(h/t to Michelle Malkin)

So Nancy Pelosi (D-San Francisco) has kinda-sorta reversed herself from her “no, not now, not ever” position against drilling offshore for oil.

But notice anything strange in how she tries to sell it?

And the consumer is our first responsibility. The American taxpayer owns this oil offshore, by the way. Let me make this one final point. This oil is owned by the American taxpayers. The oil companies drill. We give them money to drill there. But we get very little in return.

So I think as we have this debate, which is a very healthy one to have and I welcome it, we have to review and realign the relationship between our oil, big oil’s profits and what it means to the consumer and the taxpayer.

I am not the only one who smells something vaguely socialist here, as in “nationalization” of some large fraction of oil profits in exchange for “license” to drill… am I?

Or is it more like what Michelle Malkin suggests, that she is really shilling for T. Boone Pickens‘ wind farm ventures?

If this is the real goods, a real solution to our energy crisis might be close at hand.

Valcent (Google ticker: VCTPF ) mucks around with algae - and claims that oil can be produced at scale to far outstrip ethanol and palm oil production.

A very small cap (under $20M at present) OTC pink sheet special, one has to wonder… if these slime-handling scientists could well be the next Microsoft or Google, if the current commodities bull begins to peak.

While Valcent’s literature ( site ) seems to indicate that the primary product is biodiesel, they have also stated that another product could be aircraft fuel. And the relative ease with which this technology could be localized into communities - needing only the water, the green goo, and the towers to house it in - it is not tied to a specific geography as much of our current oil lies in the hands of fractious tribes of Arabs and South American Marxists.

The Oil Bull’s days may be numbered, if this technology can be scaled up.

Lots of gleeful news on energy coming down the pike.

In my area, gas is trading at $4.10 (rounding up the magical retail mil as per custom) for unleaded regular, and diesel at an eye-popping $4.95. Some stations have even exceeding the psychological $5 barrier for diesel, and if my current projections continue to prove true, the diesel price will become the unleaded regular price in about six month’s time.

As I do much of my Japanese grocery shopping in (relatively nearby) New Jersey, I take advantage of the lower taxes, about 25 cents less per gallon, and being creatures of habit, I usually wind up filling half my tank on the mid-sized late model foreign sedan I use for non-work commuting, with the family.

Our shopping trips generally run at three week intervals, and we seem to consistently hit our gas tank at about the 45% full to 50% full mark (going off of the needle on the gauge: I have not yet had the painful pleasure of filling the tank up from fumes-empty, and I’m too lazy to google up the gas tank capacity for that car tonight).

I was a tad surprised to see that there had been been nearly a 30-cent increase in the NJ gas price in the three weeks between our trips: nearly 10 cents a week.

Needless to say, that car doesn’t get a lot of unnecessary mileage on it these days.

Still, I was “happy” to fork $3.77 per gallon over the four FRNs and a thin dime I would for the same a few miles further north of the border. And it was kind of weird, as I remember the same feeling some five or six years ago, when I was paying only $1.17 in NJ against $1.42 in NY.

Seeing how I *might* be able to go to a four week schedule for hitting up Mitsuwa or Daidō and still fill up my car exclusively in NJ, I may yet be able to save a few more bucks per NJ fill-up. And, it would make my figuring out the monthly food budget a little less funky when accounting for the Japanese groceries.

The three-four dollar pittance of a difference in savings between NY and NJ (that is, in gas taxes) is certainly not going to break me; that difference is a gallon of gas today, and likely half a gallon by the end of this summer.

What may break me may be the inflation (no thanks to the big brains at the FedRes who flawfully figured out “Core Inflation” to be a measly 3.5%/year) as food prices continue to spiral upward and the dollar continues to crater.

Factor in the cost of gas and diesel as it percolates out to everything else (food production, food transport, food refrigeration, cooking, house heating, people transportation, and so on) and I’d be willing to say that real inflation is somewhere around 5% or 6% per year, perhaps more.

With the Fed cratering interest rates into the basement of underperformance (all in the name of “saving the free market from itself”, that is, salvaging certain mega-banks from dying at the hands of their own cupidity and stupidity with sub-prime loans and murderously insecure securities), it sure makes the idea of socking money away into regular savings or CDs a loosing venture.

As the stock markets daily look even deeper into the Bear’s den, the only seemingly safe investments are with energy (especially oil) and perhaps the financial management firms whose only profit would be in the shuffling around of securities like so many savagely overcooked/burnt potatoes.

So what, as the tired idiom goes, does that have to do with the price of sencha or California-grown Japanese style rice in an Asian supermarket?

It may make us reconsider sourcing the Japanese produce and dry goods much more rarely or stopping it altogether. Even now, we avoid buying our meats at Mitsuwa, and fresh Japanese fish and unagi (eel) has become but a dim and dusty memory.

Except for the relatively cheap Kurobuta sliced pork belly, a nosy customer looking into our shopping basket might think we were vegans. We have already been ourselves more to buying locally grown produce and meats, even if it is a scad more pricey *now*, I believe it will grow more competitive with the bGH fluffed beef and bleached fish sold at the local Super Food Monger.

It will also have a chilling effect on any air travel plans for at least myself, for the foreseeable future… although I will likely need to dig very deep for the wife and kids to fly to Japan.

Alternatively, with a wrecked dollar and tons of new “cost-cutting” fees for the privilege of squeezing ourselves into airline seats, it might be cheaper for our beloved Okan and Oton to book a flight with a few fistfuls of firm yen and sample some of our NY cooking for a few weeks.

Much discussion rages on about whether or not we have passed the global Hubbert Peak for oil production, but one thing is sure: oil futures remain a hot commodity, and prices at the pumps and at Wall Street continue to soar.

This is mostly to blame on the weakening dollar and rampant speculation on oil, as wealthy investors see the writing on the wall: the beginning of a recession that could be the first leg in a major global depression that dramatically re-balances global political and economic power, not to mention an almost certain Democratic landslide in both congressional and the Presidential races.

America needs to realize that access to cheap oil is NOT a God-given or a Constitutionally protected tight.

The very forces of supply and demand deny this, and yet Sen. Clinton and Sen. McCain both talk about cutting the federal gas tax as if it would be some sort of magical elixir that would lift the economy out of the doldrums.

Rather, such a move would lift the profits of the oil companies (which both politicians likely have some shares of stock in) but would only serve to push prices even higher as demand increased.

What we should consider -and I have said this before - is a steeper gas tax, much like the Europeans have. As much as $8/gal for a total pump price of $12/gal at current prices.

This need not be done in one fell swoop, but phased in to help discourage excessive speeding and superfluous driving.

Americans rarely do things out of a deliberated sense of love for the environment, nor out of any greater concern for developing cleaner and renewable energy sources for its own sake.

But we do listen to the almighty dollar, and also for convenience.

With $12/gal gas, people would choose more fuel-efficient vehicles and hybrids; American auto manufacturers would be lead to produce hyper-efficient hybrids and put concept cars like the Aptera and the Venture into major production.

We could also expand light rail from our cities into suburban areas, and perhaps even expand AmTrak to upgrade to high-speed rail (and I am not talking that sub-par, laughable “Acela” service they offer, but a train along the lines of the Japanese Bullet Train!) … trains are far more fuel efficient for moving freight and people than our current crop of cars and SUVs.

Would this cripple the economy? It would take some adjusting to get used to it, with carpools and trips carefully planned to stores and appointments to consolidate itineraries along the most efficient paths of travel.

But like it or not, we will continue to pay increasingly and painfully sharper prices for gas — it would be better to see those increases go into useful taxes that can help slacken our dependency upon oil, develop our transit infrastructure, and a crash course to sustainable (not ethanol!!) and renewable energy sources.

Of course, this is far from a perfect plan, and we would need to address the impact it would have on the working poor who must commute long distances. A possible solution might be a monthly rebate check sent to people under a certain income margin.