This article here talks about how oil prices are increasing and the dollar is decreasing and the Dow lost 361 points. Many are worried that the signs point to lethal prices for the American economy, but some feel that $100 oil will not be as detrimental to the economy because America isn't as dependent on oil as much as it has been in year's past. However, they do feel that the high oil price when combined with a credit crunch will prove painful.
What do you think? Are we as oil dependent as we have been in the past, or can we overcome prices at the pump amidst credit crunch, stock market, and dropping dollar issues?
6 comments:
Let’s have a "Triple Play": Reduce Oil Prices and Dependence on Fossil Fuels, while Meeting the Growing Demand for Electric Power
The Cost of Oil
Oil prices may soon reach $100/barrel. In two years there will be one billion automotive vehicles worldwide. If current trends continue, by 2030 world oil supply, projected to be 70 Million barrels per day, will fall far short of the estimated daily demand. The projected shortfall of 40 Million barrels of oil per day will drive fuel costs far beyond tenable levels. The world will see more wars, such as the conflict in Iraq, unless a path is opened that can dramatically reduce demand for oil.
Fossil Fuels and Global Warming
The Intergovernmental Panel on Climate Change, that shared the 2007 Nobel Peace Prize with Al Gore, concluded that drastic shifts are happening much more rapidly than earlier predicted. Rajendra Pachauri, a scientist and economist who heads the IPCC has stated: “What we do in the next two to three years will determine our future. This is the defining moment.”
Greenland loses more ice each year than all the ice in the Alps said Konrad Steffen, a Greenland expert and advisor on abrupt climate change. "It is scary," said Steffen. Not only in Greenland, but in Antarctica and elsewhere there is massive melting of ice. “In 8 years nearly all Peru's glaciers will be gone due to global warming and its 27 million people will nearly all lack fresh water, with the likely result being: 'chaos, conflict and mass migration'. Each 1 degree Celsius global temperature rise deprives between 400 million and 1.7 billion people of sufficient water. “A total of 46 nations and 2.7 billion people are now at high risk of being overwhelmed by armed conflict and war because of climate change. A further 56 countries face political destabilization, affecting another 1.2 billion individuals.” (Observer UK 11-4-07). More than 180 nations have coastal areas in peril. Two-thirds have over 5 million people under threat of serious flooding. Included are cities such as New York, London, Miami, Shanghai and Tokyo.
The World’s Huge Appetite for Energy
Energy consumption is at the core of human existence. It virtually controls what we eat, how we live, where we go, how we are entertained, our health, knowledge, defense and exploration. The world's demand for energy is surging.
The International Energy Outlook 2006, by the U.S. Department of Energy, forecasts electricity use will grow by an average of 2 percent per year worldwide and almost twice as rapidly in the developing world. Robust economic growth in many developing nations is expected to boost demand for electricity for air conditioning, cooking, space and water heating, and refrigeration. Global energy consumption is projected to increase by 71% from 2003 to 2030. We need to sharply accelerate development of radically new, cost-effective, sustainable alternatives.
The Triple Play
A revolutionary new technology, GENIE™ (Generating Electricity by Nondestructive Interference of Energy) is being developed at Magnetic Power, Inc. (MPI).
MPI has dedicated more than 20 years of research and development into exploring breakthrough technologies. To reverse the trends discussed above, MPI envisions a technological revolution, developed commercially, that has limited impact on available planetary resources. GENIE is projected to be easy to manufacture and use, as well as inexpensive, thus capable of rapidly achieving global impact.
Based upon proprietary breakthrough discoveries in MPI's labs, GENIE generators are being designed to operate continuously, without fuel, extracting electricity by converting an energy source that exists everywhere in the universe. This process creates no pollution. The cost of electricity is estimated to be significantly less than any competing form of power generation, today or in the foreseeable future.
GENIE generators with no moving parts can be made in many of the world's electronics factories. Household units will produce power 24/7. Larger units will replace automobile engines. GENIE will eliminate any need for fuel to run a vehicle. It can also allow future cars to become income producing power plants when parked.
GENIE is a magnetic device. Nobel physicist Werner Heisenberg once stated: "We could utilize magnetism as an energy source". Hans Coler demonstrated a 6 Kilowatt, solid-state, magnetic "space-energy receiver" in Germany during 1937. It was destroyed by an Allied bomb during WWII. The invention was confirmed by British Intelligence after the War. However, at the time, there was no comprehension as to the source of the energy. Coler wrote: "These fundamental researches…have made the first real and large breach in the citadel of present scientific belief."
Advanced GENIE prototypes are currently being constructed by MPI. Lee Felsenstein, EE, evaluated an early proof-of-concept prototype. He felt it to be analogous to the first examples of the transistor, which eventually led to a Nobel Prize and the creation of Silicon Valley (and similar high-tech complexes throughout the world).
Within a year, a compact, 1,000 watt, self-sustaining, GENIE generator is a goal. A plug-in hybrid car, with a pair of these GENIE prototypes replacing any need to plug-in, will herald the beginning of an end to the need for fuel. Within two or three years, the first example of a larger GENIE generator, the size of a car’s fuel tank, might readily demonstrate the potential to replace any need for a fuel-burning engine.
The urgent need is for an emergency changeover, in less than a decade, from burning fuel, to widespread use of new sources of energy that eliminate the need for fossil fuels. The Triple Play made possible by GENIE makes that a practical goal. We applaud all efforts to replace oil and reduce greenhouse gases. However, nothing short of revolutionary new technology can act fast enough to save millions of lives.
Scientists may express skepticism, since the energy source is not yet widely understood. Acceptance will come when one sits on a desk in front of them and produces electricity. MPI is developing room heaters, Demonstration Devices and toys. Young people with open minds might teach their elders how they function. This Triple Play can and will accelerate, as rapidly as the required funding will allow.
www.magneticpowerinc.com
I think we are trying to become more oil independent but we have a long ways to go. Car's are becoming more fuel efficient which will help. I do think that high oil prices will overall hurt the economy but won't be the only problem. The other problems you mentioned in the blog will play a part. I particularly think the falling value of the dollar will be the biggest problem. The falling value of the dollar is actually the reason for the high price of oil we are paying.
Caden: the falling dollar only explains fairly recent inflation in oil prices.
Most of the run up in oil prices over the last 3 years has to do with global demand. I wouldn't expect this to affect the U.S. too much - our GDP is far more independent of oil than most people think.
Dr. Tufte is right. Recently, oil has risen as high as $110 per barrel. The same day this happened, markets were up and the dollar rose slightly too. Our economy isn't too closely tied to the price of barrels.
Dr. Tufte-Extra Credit
I agree with what Dr. Tufte said. GDP is more independent of oil than what people think. There will be issues to deal with such as gasoline prices and the shipping industry. This will increase our food prices, goods that ship across the country will have price increases and people will travel less. With oil over $100 a barrel we will see price inflation on most of the items we purchase day to day. Despite all of this people will still continue to spend money and we will adjust to the price differences rather quickly. How do I know this? Europe has experienced this for years. I was in Iceland and Germany last year and gasoline averaged $2-3 dollars a liter. People adjust and they continue to do what they have always done.
Hmmm. I think if anything we are a lot less dependent on oil than people think.
What is going on right now is a run up in the price of commodities, of which oil is one (and it's only in the middle of the pack of price increases).
This is where people are storing wealth for the short-term because real interest rates are negative in the U.S.
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