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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (522)	6/24/2005 1:31:19 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24212

Oil prices The sky is the limit Leader Thursday June 23, 2005 The Guardian Not long ago, the notion of the price of crude oil hitting $60 a barrel would have caused apoplexy. But after two years of steadily rising prices, the fact that oil trading in New York came within 30 cents of touching the $60 mark, setting a new record in the process, passed with barely a murmur. There are various contributory reasons for the sudden spurt in prices earlier this week, such as a threatened strike in Norway. But the underlying message is that higher oil prices are here to stay - and may rise to $100 a barrel, according to some forecasts. Even the normally bullish Lee Raymond, chief executive of ExxonMobil, the world's largest listed oil company, warned "it would take a few years to sort out where it'll all end". The US energy secretary also worries it will take many years for the sharp increases in demand, caused by growth in developing countries, to pass. Sadly, that is the optimistic scenario. The pessimistic scenario is that the world is fast approaching "Hubbert's peak", the point at which the rate of global oil production begins to decline. In either case oil prices will keep rising. The biggest optimist cannot ignore the fact that the annual average increase in demand for oil was around 1m barrels per day from the 1970s - until 2004, when the average increase shot up to 2.5m barrels a day. According to the International Monetary Fund's forecasts, total global demand will rise from around 82m barrels a day now to nearly 140m a day by 2030. Barring a technological breakthrough in the combustion engine - which could still lead to additional consumption, an effect known to economists as Jevon's paradox - the increased demand will presumably be met by much higher prices and the exploitation of marginal reserves. Yet higher prices that curb demand in industrialised nations will wreak havoc in less developed nations, especially non-oil producers in sub-Saharan Africa, where increases in fuel costs affect economies to a greater degree. Juggling demand and price against the role of oil as a cause of global warming - which is also likely to have a greater impact on the more fragile African economy and geography - is a huge quandary for the world's leaders. Michael O'Leary, the ebullient head of Ryanair, hit one nail on the head when he told those concerned about climate change: "Sell your car and walk." That advice would have made Mr O'Leary a national villain in the United States, where the right to cheap gas is assumed to be a clause of the constitution. For one reason or another, the reign of oil must come to an end guardian.co.uk