Could An Oil Revolution Happen Here?
With gas prices quickly approaching $4/gallon, could an oil revolution due to our dependency happen here?
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The countries owning most of the planet’s oil reserves, are in the midst of, growing political turmoil. The economic stability, of the entire world, remains at risk, until an alternative to our oil addiction, is shaken off, and a new energy source is developed, to end our oil dependency.
Is Oil, A Dwindling Resource, Creating A Potential Oil Revolution?
For years, we have been warned, that the world economy is relying on a dwindling resource. Currently, the uprisings in the Middle East and Libya, have proven that, revolution affects the global price of gas within days. The question: Will the climbing prices, cause an oil revolution here?
There is a growing fear that Saudi Arabia, with the largest known oil reserves, may also join in the oil revolution. If or when, the Saudi oil industry enters into a period of crisis and uncertainty, soaring prices most certainly could trigger a global oil revolution. Here in the U.S, we receive 3% of our oil from the Middle East. Yet, here we are, trying to recover from the recession, and then, we get hit with the pain at the gas pump, by rising gas prices!
America Ripe for An Oil Revolution
America’s oil dependency, began 150 years ago at a drilling site in Pennsylvania. Oil remains the most convenient energy source to produce, transport, and use. In fact, of the 10 biggest companies in the world, five of them are oil companies. No other commodity is as affected by political developments, or has a greater influence on the global balance of power, than oil. It’s no small wonder, that it is known as black gold. And we all know, from history, how “gold” affects the mind. Oil revolution? Not so far-fetched.
A Little History As A Back Drop For A Potential Oil Revolution
Oil prices, during the past 40 years and right into today, shape the relationships among the major powers. In the 1970s, during the wake of the Yom Kippur War, and the revolution in Iran, a very negative effect on the status of the United States occurred, in the form of soaring gas prices. This, triggered an oil revolution, and an oil embargo. At the time,we were, the world’s largest oil importer. That fact, helped strengthen the Soviet Union, whose economy relied heavily, on exported energy. The crash of oil prices, at the end of the 1980’s, is what toppled, the USSR. Their economy, was not strong enough, or capable of maintaining the Soviet empire, without the flow of oil dollars.
In 2008, the price of oil shot up again, and triggered, the world financial crisis, we are still recovering from. America, was left reeling, and its self-confidence, undermined. The big beneficiary, reaping the reward, was China. They also import oil, but, their economy is still less dependent on it, than our oil dependency, here in the United States. Oil prices dropped again, when, President Obama was elected. They revived again, with the rise in demand, last year.
Will Our U.S. Thirst for Oil Cause A New Oil Revolution?
America’s weakness, and oil dependency, has affected oil exporters. The shock waves of our struggling economy, sparked by the financial crisis, have a ripple effect, including the collapse of the Arab regimes. We all know that cars, ships and planes, and a large proportion of the trains in the world, are powered by gasoline or diesel fuel. Our modern way of life depends entirely on these modes of transportation. Therefore, our dependency on oil will remain. History has taught use that fear triggers revolution. Will the high cost of oil, in our struggling economy, be the oil revolution trigger? (See my earlier post, the high cost of everything).
Here in the U.S., it is nearly impossible, to buy a loaf of bread, without getting into the car, and driving to the store. Perhaps, it is something we take for granted, but living rural, can mean having to go at least five miles, to the nearest store. At the very least, our diving habits, need to be carefully planned out, to curb our oil consumption. Everything, in our economy, is dependent on oil. It’s, what gets our food supplies to their destinations. It’s our oil dependency, that could fuel another oil revolution, because of the soaring high prices of everyday necessities.
Here, in the United States, we consume, about one-quarter of the world’s oil production. For the first time, last year, the Chinese surpassed Americans, in overall consumption of energy (from all sources, and for all uses). The Chinese, are enjoying a fast growing, and robust economy. As they migrate from the countryside, to the city and transition from bicycles, to motor vehicles, they need more gasoline and diesel fuel. Today, China consumes about one-tenth of the world’s oil production.
Today, global oil dependency and consumption is now at a record peak, of about 88 million barrels a day. Russia and Saudi Arabia are the two largest producers. Together, they supply about one-quarter of the entire market. Saudi Arabia has the largest proven reserves, and a surplus production capacity. Production has increased, to supplement Libya’s current crisis. All the other oil exporters, are pumping oil at their full capacity.
Saudi Arabia’s reserves and its production abilities are questionable, and cause for debate. However, our expectations that they have a never ending supply, are the factors that dictate the price and consumer behavior.
America, the events in the world today, are our wake-up call. A great deal of strength and determination, will be needed, as we as they face these days of rage and a potential oil revolution, both here and abroad. The faster we find alternatives, the better. The revolutions, occurring in the Arab countries, are sounding the alarm to get moving on change. It is time to take essential steps, and to make positive changes to the energy economy. It’s time to look to our own resources, here at home, and build toward greater tomorrows, by putting an end to any potential oil revolution.
More about the potential oil revolution coming later in the week!
