"Those people who think we've entered a new paradigm where high oil prices don't affect economic growth are wrong," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation in New York.
"I believe oil prices and the economy are on a collision course and that it's only a matter of time," [Peter] Beutel added, [president of Cameron Hanover Inc. of New Canaan, Conn., a provider of petroleum market analysis].
On the other hand, optimists point out that the US economy is drastically more energy efficient than it once was. And in inflation-adjusted terms, oil would have to reach $90 a barrel to match prices in 1980. They're (partly) right.
I've been doing a little digging, recently, into the energy-intensity of various economies. (Simply put, energy intensity is how much energy is required to generate a unit of gross domestic product.) For the early years of the 21st century, the US ranks a rather pathetic 18th out of the 30 OECD countries, which are our closest economic peers. Canada rates even worse, in 26th place.
But the good news is that the US and Canadian economies have become considerably less energy intensive during the past two decades. In fact, the only OECD countries to make faster progress are Poland and Hungary (both languishing under Soviet command-and-control in the early '80s) and Luxembourg (a former center of European steel production).
On the other hand, North America's economy has a very long way to go in energy efficiency to match our economic rivals in Europe and Japan. Dollar for dollar, Switzerland, Japan, and Denmark use about 1/3 as much energy as Americans (and about 1/4 as much as Canadians). Germany and France use about 1/2 as much as Americans (and about 1/3 as much as Canadians).
If escalating oil prices are indeed a fixture of the future, it's pretty clear that long-term economic growth depends on generating more wealth with less petroleum. It strikes me that efficiency, conservation, and diversification will be critical to North America's economic future. If so, smarter regulation may hold the keys to success in what may be an unusual alignment between environmental and economic interests. For one obvious example, higher fuel efficiency standards in vehicles, appliances, and homes could buffer people from rising costs.
P.S. There's a whole chain of reasoning behind my worry about high energy prices. You can read all about it on Northwest Environment Watch's blog.
Comments
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Japhet Posted 3:47 pm
04 Mar 2005
Speaking of oil addicts, Rainforest Action Network recently launched some sort of Oil Addicts Anonymous tour in the midwest. What a smashing idea. Finally people are standing up and admitting that they're addicted to oil! Thats the first step in making a transition.
Check out Energy Action as well: they are sponsoring a HUGE day of action or something on April 1. Its called "Fossil Fools Day" and is going to be all over the country. Good times.
Bottom line: oil is awful...we've been burning it for far too long and its time we got as technologically advanced in the energy department as we are with communications.
Jay Els
Educate, Motivate and Bring About Change. http://www.ran.org
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BlackBear Standing Posted 4:51 pm
04 Mar 2005
The majority of the cost of a store-bought vegetable is the cost of getting it to the shelf. If you begin to wean society off of giant agribusiness that grows much of our food in Central and South America and move toward lower cost, closer-to-home produce, you run head-on into the problem of urban sprawl. Huge, overpriced suburban housing is gobbling up farmland everywhere.
We must redesign transportation and the transportation energy supply infrastructure at the same time as we radically alter food production and distribution, and also while containing or reversing urban sprawl.
"Sentiment without action is the ruin of the soul." - Ed Abbey
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daenergymon Posted 7:15 am
04 Apr 2007
Remember an addiction isn't about finding solutions as much as changing how you think.
Therefore,
Change your thought process, change the world.
Spread the word.
Oil Addicts Anonymous International (a new 12 step program) http://www.IamanOilAddict.org
Change your thought process, Change the world
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