Charles Edison

"Economics, politics, and personalities are often inseparable." - Charles Edison

Wednesday, February 29, 2012

"Nonsense?" (Pt. 1)


The point is that when two people argue over the one cause of oil price increase, both individuals are incorrect because there are several reasons as to why oil prices rise.

What frustrates me is that some people nowadays focus on the short term reasons for oil price increase or decrease. Putting blame on the dollar, conjecture, and instability puts the issue as a whole in a poor context. It implies that by solving these problems, everything can go back to "normal."

It's time we step back and address the real issue: oil is a limited resource. You may have read about "peak oil" in the article. It was the first time I learned of it, too: essentially, peak oil will occur when the rate of petroleum extraction is at it's max, after which we must begin to cope with "terminal decline." It's a day we have all seen coming, the end of the oil age... but some say Peak Oil has already occurred. That's debatable. The point is that grumbling over the sanctions on Iran and the possible Oil Wars, or (insert any explanation as to why oil prices fluctuate here) entirely disregards the base of the issue and merely puts off the the problems that we will eventually have to face, such as having no petroleum to power our cities, run our cars, make our plastics, and lubricate the gears of the entire economy.

Others that do not believe in peak oil feel that entrepreneurship will be the new driving force of energy production, having the ability to exploit new fields in alternative resources.

You can expect part two of "Nonsense?" next week.


Anonymous said...

Oil discoveries actually peaked over 40 years ago, and global production has been flat for 8 years now. All while demand has dramatically increased from countries like China and India. Also, almost 80% of global producers have already reached their peak. Supply is only decreasing, so price will obviously increase.That is the root cause of the issue. Yes, there are other contributing factors, such as conflict in the middle east. But bottom line, the global supply is only getting smaller, causing prices to increase.

Darcy said...

It saddens me that our economy has not yet shifted towards supporting renewable energies. It is apparent that America relies too much on oil and gas, as when it fluctuates for whatever reason, everything in our markets do too. This is shameful.

Yay for capitalism and all that, but in the area of oil and gas, we are digging our own grave as a country by letting these big industries rule and even govern our future. We must must must invest in renewable energy, or else in the ultimately near future America will literally die.