Oil Shocks

[chelidon]

If you've got a second, this report from The National Commission On Energy Policy is pretty darn fascinating. It highlights the fact that we're right on the edge of petrochemical price spikes, just waiting for any of a range of natural or man-made triggers to occur. It has to do with the very small gap between supply and (rising) demand. In other words, sooner or later, probably sooner, some disruption will occur -- it's not "if," it's "when." And any restrictions in supply, even if temporary and only affecting a fraction of the market, will cause massive price spikes, which will may well have some level of cascade effect on oil-dependant economies around the globe.

FYI, $161/bbl for oil works out to something around $6/gal for gasoline.

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Report Highlights U.S. Vulnerability to Oil Shocks

Amid high global oil and U.S. gasoline prices, a report released today by Securing America's Future Energy (SAFE) and the National Commission on Energy Policy (NCEP) demonstrates that the United States is vulnerable to much more severe oil shocks should even relatively small amounts of oil be withdrawn from the global market due to terrorism, political unrest or additional natural disasters.

The report details the findings of Oil Shockwave, an oil crisis simulation conducted earlier this summer, which found that taking less than 4% of oil off the global market due to small incidents of political unrest and terrorism would cause prices to rise dramatically to more than $161 bb. It also showed that once an oil supply disruption occurs there are few short-term options for protecting the U.S. and global economy. The simulation was conducted by former high ranking government officials, experts in the fields of national security and economics, and energy industry specialists.

Press Release
Full Report

Comments

[kitten-goddess.livejournal.com]

Jesus, I'm glad I don't have a car and live in a place where heat is included!!!!