Envisioning a world of $200-a-barrel oil

[Douglas Carpenter]

"As forecasters take that possibility more seriously, they describe fundamental shifts in the way we work, where we live and how we spend our free time."

By Martin Zimmerman : times staff writer

link: http://www.latimes.com/business/la-fi-oil28-2008jun28,0,5485259.story



snip:"But with oil closing above $140 a barrel Friday, more experts are taking those predictions seriously -- and shuddering at the inflation-fueled chaos that $200-a-barrel crude could bring. They foresee fundamental shifts in the way we work, where we live and how we spend our free time.

"You'd have massive changes going on throughout the economy," said Robert Wescott, president of Keybridge Research, a Washington economic analysis firm. "Some activities are just plain going to be shut down."

Besides the obvious effect $7-a-gallon gasoline would have on commuters, automakers, airlines, truckers and shipping firms, $200 oil would drive up the price of a broad spectrum of products: Insecticides and hand lotions, cosmetics and food preservatives, shaving cream and rubber cement, plastic bottles and crayons -- all have ingredients derived from oil."

snip""The purchasing power of the American people would be kicked in the teeth so darned hard by $200-a-barrel oil that they won't have the ability to buy much of anything," said S. David Freeman, president of the L.A. Board of Harbor Commissioners and author of the 2007 book "Winning Our Energy Independence."

snip:"Nationwide, $200 oil and $7 gasoline would force Americans to take 10 million vehicles off the roads over the next four years, Jeff Rubin, chief economist at CIBC World Markets, wrote in a recent report."

[Douglas Carpenter]

1. one little kick

[scarletwoman]

2. Here's a kick & recommend. We are SO screwn... (nt)

[Arctic Dave]

3. The thing I find most amazing is the total silence

coming from our elected "leaders" about what directions we should go to avoid total destruction, because that is what $200 a barrel will bring.

[ladjf]

9. While we are racing headlong toward TOTAL economic collapse,

the Federal Government is doing everything possible to promote the use of oil while doing ever thing possible to inhibit the use of alternate energy sources, i.e. wind, solar, geothermal and tidal.

The crooks in charge are killing the "goose that laid the golden egg". When the global economy collapses, they will be lucky to get $35 per barrel.

[arcadian]

12. They are afraid to

Even a peep from them about the energy crisis would probably have disastrous consequences.

[TheFarseer]

15. they can't do anything that wouldn't make someone mad

All of our energy choices require someone to sacrifice, whether it's sacrificing their SUV or their view of Nantucket Bay or a few tax dollars. Politicians never make someone sacrifice. Politicians are all Santa Claus wanna-bes. This Republican strategy of ignoring the problem and hoping it goes away has permeated our entire government.

[Flabbergasted]

4. Off to Greatest. nt

[Arctic Dave]

16. That picture is hilarious.

I can't stop laughing.

[Douglas Carpenter]

5. one more kick

[Initech]

6. We could do the right thing and end speculation trading, but Congress isn't going to do shit.

[truedelphi]

17. Nope they won't do a thing. And when the oil bubble bursts

And our Senators are among the losing players, we will probably have to BAIL them out.

[Douglas Carpenter]

7. one more

[ladjf]

8. $200 per barrel = total economic collapse for all Countries that

are oil importers.

[Selatius]

10. It presents the golden opportunity of massive building programs aimed at constructing mass transit.

Of course, this is assuming America is led by visionary leaders instead of mediocre ones who lack vision and clarity, and it would also present the opportunity to redesign the way cities are built for cities that have yet to be built or are still growing and can still change their plans relatively cheaply.

[Telly Savalas]

11. "A world of $200 a barrel oil"

Known in some circles as "a week from Thursday".

[arcadian]

13. LMAO

:rofl:

[nbsmom]

14. Did you see this article?

And this is not a 'tin foil hat' publication...

http://www.businessweek.com/lifestyle/content/jun2008/bw20080626_022098.htm

[aint_no_life_nowhere]

18. Wow, Wow and WOW

That certainly isn't a tabloid or tin foil hat publication. That article by Ed Wallace is a pretty powerful statement against the Bush Administration and its refusal to attribute any of this mess to speculators.

I also liked Wallace's participation in the Comments section below the article. He had this to write:

"...When Wendy Gramm was head of the CFTC, she was the first to start altering the rules for Enron and did this right before Clinton was put in office. She was later put on the board at Enron. It was her husband, Senator Phil Gramm, who co-sponsored the Commodities Futures Modernization Act of 2000 and it was slipped into an 11,000 page appropriations bills in the middle of the night that the president did sign. That bill is the reason Enron could fleece the state of California in 2001 and 02. It also deregulated parts of the mortgage market that is behind today's crisis. Therefore, the California problem, the national mortgage mess we have and the problems with oil can all be traced back to that one bill. Which died in the House and only became law because it was hidden in a huge appropriations bill. ..."

[Strelnikov_]

19. The world is getting hilly?

The fee increases on the ferry would be nothing compared with the added cost of transoceanic shipping if oil goes to $200. Some experts say high energy costs are altering global trade and slowing the pace of globalization. It takes about 7,000 tons of bunker-fuel to fill the tanks of a 5,000-container cargo ship for a trip from Shanghai to Los Angeles. Over the last year and half, the cost of that fuel has jumped 87% to $552 a ton, according to the World Shipping Council, boosting the cost of a fill-up to more than $3.8 million.

"To put things in perspective, today's extra shipping cost from East Asia is the equivalent of imposing a 9% tariff on East Asian goods entering North America," said Rubin of CIBC World Markets. "At $200 per barrel, the tariff equivalent rate will rise to 15%."

. . .

Local distribution patterns could change too. Stephen Gaddis, chief executive of Pacific Cheese Co., a Hayward, Calif., cheese processing and packaging firm, thinks high fuel prices will push restaurants, retailers and food manufacturers to look for suppliers closer to their operations. "Local sourcing is ideal. You won't pay as much for freight, and when you use less fuel it's better for the environment," Gaddis said.

Soaring diesel prices will make companies rethink whether they should have large, centralized plants or build smaller ones around the country. That's what Pacific Cheese is doing. It's building a packaging plant in Texas to be closer to one of its larger suppliers and expects to serve its Southwestern clients from there.
In the near future, however, consumers can expect to pay for the higher cost of producing food and moving it around the country, say food executives, farmers and economists. Even having a deep-dish pizza with extra cheese brought to your door costs more now that chains such as Pizza Hut are charging for delivery.

[nadinbrzezinski]

20. Have been thinking about this for a while

but the silence from DC is deafening

By the way, many articles do not include the inevitable food riots

[leftchick]

21. more likely $400.00 a Barrel oil

if the US or Israel strikes Iran. Or should I say when? :(

[Douglas Carpenter]

22. skyrocketing oil prices are probably and ironically our best deterrent against this insanity

It is already predicted by perfectly credible analyst that oil prices could quite likely reach $200 per barrel before the end of the year.

If war drums for war start beating really loud and an attack appears imminent - oil prices will almost certainly surpass $200 a barrel very quickly; within days if not faster.

An actual attack will almost certainly send oil prices up to $300 per barrel - crippling the world economy.

____________________________________________

"I think of war with Iran as the ending of America's present role in the world. Iraq may have been a preview of that, but it's still redeemable if we get out fast. In a war with Iran, we'll get dragged down for 20 or 30 years. The world will condemn us. We will lose our position in the world."

Zbigniew Brzezinski, Vanity Fair, 2006.