Our Oil Problems are Not Over! | Our Finite World. (FULL ARTICLE)
If a person reads US newspapers, it is easy to get the impression that all of the world’s oil problems are over. But this is not really the case.
An Overlooked Part of the Problem: High Oil Prices
A major piece of the world’s oil problem is high price. Prices continue to be far above historic levels, now in 2013.
Figure 1. World oil price (Brent equivalent) in 2011$, based on BP 2013 Statistical Review of World Energy data.
High oil prices disrupt economies around the world because when oil prices rise, the wages of the vast majority of workers do not rise to compensate. Workers find that they need to adjust their spending patterns because the higher price of oil leads to higher prices for many things, including the cost of commuting, the cost of food, and the cost of buying goods that have been shipped long distance.
When workers adjust their spending patterns, discretionary spending is cut. This leads to patterns we associate with recession, or perhaps just slow growth. Unemployment rises, and there is less demand for new homes and cars…..