The drastic rise in oil prices which is expected to continue to at least $200/barrel (from the current $139) is going to force gut-wrenching changes in the American economy, as indeed in the world economy. Is this all a giant conspiracy to block the rise of 'Chindia' - the China-India phenomenon which is expected to dwarf the US economy in a few decades - by starving those two rising global powers of the oil needed for their enormous growth?
Apparently not. What seems to be the problem is that the world has reached the so-called ' topping-point' - the point at which half the world's proven oil reserves have been exhausted, after which - according to a geologist named Hubbert- world oil production will inevitably decline. Hubbert's 'Law' has already been proven to be correct in American oil-fields - once half-depleted - their output only declines...
Warnings about this crisis have been coming for decades but the inability of the existing oil producers to match the increase in demand caused by Chindia have finally lent credence to those pleas.
Unless the world moves away from its dependence on non-renewable fossil fuels which are now half-depleted - the topping-point having been reached in 2008 by one estimate - and makes massive investments in renewable energy from wind, tides, the sun..... as well as in nuclear, tar-sands and other options considered undesirable or costly.....drastic consequences can ensue....For example the awesome network of American highways and the great automobile industry and its derivatives......could - at least in theory - end up as abandoned and obsolete....as useless as dinosaur skeletons.
Similarly the world's greatest armed force - the American one - so heavily dependent on gasoline - could be severely handicapped - or be forced to become marauders for oil like those murderous gangsters in the Mad Max film series. Come to think of it - isn't that what the American armies already are...with their criminal occupation of Iraq and plans against Iran?
Oil-marauding has hardly proven to be cheap for America - they have already spent close to $1 trillion in Iraq according to Nobel-winning economist Stiglitz - and may have at least another trillion or two to spend/lose between domestic macro-economic effects and on health-care and disability for returning Iraq veterans. Perhaps the money is better spent on developing alternative energy...?
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