Oil Price Surge threatens Economic Stability and National Security

[Dover]

Worldwatch Institute: Oil Price Surge threatens Economic Stability and National Security

by Christopher Flavin

Washington, DC—One of the central issues facing policy makers in
Washington and around the globe in 2005 is the prospect of further
instability in world oil markets. This new reality carries both
economic and security risks. Another oil shock could tip the world
economy into a premature recession, while the massive flow of oil
revenues into the Persian Gulf and Russia threatens to derail
economic reforms and foment political unrest.

The dramatic rise in oil prices from $24 per barrel in 2002 to
between $40 and $55 in late 2004 stems in part from a sharp increase
in consumption in China and the United States. But it also reflects
the fact that for the first time in more than two decades, there is
virtually no spare oil production capacity left—with far-reaching
implications for national security, economic stability, and all of
our pocketbooks. Although oil prices have fallen over the past month, this is likely to prove a brief respite from the oil escalator we're now riding.

Already, oil production is falling in 33 of the world's 48 largest
oil producing countries, including 6 of the 11 members of the
Organization of Petroleum Exporting Countries (OPEC). Among the
countries where oil production is declining are Great Britain and
Indonesia. In the continental United States, oil production peaked at 8 million barrels per day in 1970, and has fallen to just 2.9 million barrels per day in 2004. In this year of soaring prices, only Russia and the Persian Gulf countries have been able to increase production significantly—and they are now pressing against their current limits.

The urgent question is whether the recent difficulty in boosting oil
production represents a temporary challenge or something more basic.
Many government agencies still believe that there is plenty of oil
left, and that higher prices will open the floodgates. They argue
that there is enough for world oil production to keep rising for the
indefinite future—reaching 115 million barrels per day by 2020, or
more than 40 percent above the current level according to the
International Energy Agency....cont'd

http://energybulletin.net/3662.html

[cornermouse]

1. I think they're wrong, but say they are right about

"enough for world oil production to keep rising for the
indefinite future—reaching 115 million barrels per day by 2020, or
more than 40 percent above the current level according to the
International Energy Agency"

We can't afford the prices they're charging on a long term basis with our salaries. Its as simple as that.