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January 08, 2009

New Tomdispatch


Oil 2009
Be Careful What You Wish For

By Michael T. Klare

Only yesterday, it seems, we were bemoaning the high price of oil. Under the headline "Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year," the July 7 issue of the Wall Street Journal warned that prices that high would put "extreme strains on large sectors of the U.S. economy." Today, oil, at over $40 a barrel, costs less than one-third what it did in July, and some economists have predicted that it could fall as low as $25 a barrel in 2009.

Prices that low -- and their equivalents at the gas pump -- will no doubt be viewed as a godsend by many hard-hit American consumers, even if they ensure severe economic hardship in oil-producing countries like Nigeria, Russia, Iran, Kuwait, and Venezuela that depend on energy exports for a large share of their national income. Here, however, is a simple but crucial reality to keep in mind: No matter how much it costs, whether it's rising or falling, oil has a profound impact on the world we inhabit -- and this will be no less true in 2009 than in 2008.

The main reason? In good times and bad, oil will continue to supply the largest share of the world's energy supply. For all the talk of alternatives, petroleum will remain the number one source of energy for at least the next several decades. According to December 2008 projections from the U.S. Department of Energy (DoE), petroleum products will still make up 38% of America's total energy supply in 2015; natural gas and coal only 23% each. Oil's overall share is expected to decline slightly as biofuels (and other alternatives) take on a larger percentage of the total, but even in 2030 -- the furthest the DoE is currently willing to project -- it will still remain the dominant fuel.

The rest.

—Jonathan Schwarz

Posted at January 8, 2009 01:30 PM

It's called economic shock testing.

The high price served two purposes; to test the limits of the world economy, and to push the American people into electing Obama.

Yes, I'm saying that people from the current President's side of things wanted Obama elected. Makes perfect sense if you look at the cycle of things. 4 or 8 years of Republican pillaging, and 4 or 8 years of Democratic fixing the mess they left and expanding state powers. All so they can do it again.

And the overarching theme is to try and force you and I into somehow identifying with the 'global economy', as if it makes our lives so much better. Tell me, other than because of Nazi-like nationalism, why should I care about a huge corporation like GM failing? And please don't even try to make the central planner's argument about the lost jobs with me. As much as some people would like it, that amounts to nothing more than 'free money' for parasites of society. Parasites, because if the market can't bear it, then taxpayers are left with the bill. Sound familiar?

Anyway, the price of oil is nice and low now, so I guess we can go back to watching TV and feeling self satisfied about electing such an historic guy for President.

Posted by: tim at January 8, 2009 02:50 PM

Price shocking sounds great BUT I'M POSITIVE oil companies would have kept raising the price as long as they could. USE LESS IS what happened. (across the board)

Posted by: Mike Meyer at January 8, 2009 03:01 PM

Use less is what happened, and was easily predicted long before the prices were raised. And if it wasn't for 'use less', yes the prices would have raised further. That's all basic economics.

You need to look deeper, at the political situation in the world to see what allowed them to raise prices in the first place. Well shoot, makes me wonder what Cheney and the boys talked about in those secret energy meetings all those years ago.

I'll bet you one thing, whatever the plan was, it was executed perfectly.

Posted by: tim at January 8, 2009 03:10 PM

It's called economic shock testing.

as much as i would like to believe that, i think it was just fallout from people who suddenly realized what an absolute shithole they had dug themselves into with their CDOs/etc and were trying really hard to get out of it and put it where it would be relatively safe(oil and commodities were seen as golden geese)

Posted by: almostinfamous at January 8, 2009 11:30 PM