last 5 years
Posted on 08/30/2009 8:10:44 PM PDT by St. Louis Conservative
On Aug. 28, 1859, in the backwoods of northwest Pennsylvania, the first successful oil well went into production in the United States, ushering in an energy revolution that would make whale oil obsolete and eventually transform the industrial world. Yet 150 years later, even as demand increases in developing countries, oil's position in the global economy is being questioned and challenged as never before.
Why this debate about the single most important source of energy—and a very convenient one—that provides 40% of the world's total energy? There are the traditional concerns—energy security, diversification, political risk, and the potential for conflict among nations over resources. The huge shifts in global income flows raise anxieties about the possible impact on the global balance of power. Some worry that physical supply will run out, although examination of the world's resource base—including a new analysis of over 800 oil fields—shows ample physical resources below ground. The politics above ground is a separate question.
But two new factors are now fueling the debate. One is the way in which oil has taken on a second identity. It is no longer only a physical commodity. It has also become a financial asset, along with stocks, bonds, currencies and the rest of the world's financial portfolio. The resulting price volatility—from less than $40 in 2004, to as high as $147.27 in July 2008, back down to $32.40 in December 2008, and now back over $70—has enormous consequences, and not only at the gas station and in terms of public anger. It makes it much more difficult to plan future energy investments, whether in oil and gas or in renewable and alternative fuels.
(Excerpt) Read more at online.wsj.com ...
to read tomorrow
To read tomorrow.
BFL!
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