Saturday, April 26, 2008

The Future of Oil Prices?

A Canadian bank predicts the price of oil will rise to $150/barrel by 2010 and $225/barrel by 2012.

It's only one opinion, but there are some simple facts in the article that make the prediction seem plausible (for example the dramatic increase in car sales in Russia and China).

The 60 second article is here.

I won't make a personal prediction about how fast oil prices will grow, but I think that any Americans that believe that the current "spike" in oil prices is in any way temporary are in for a major disappointment.


Jen said...

Have you read The Omnivore's Dilemma, by Michael Pollan? Pollan has a lot to say about agricultural reliance on fossil fuels, beyond the obvious shipping and transportation costs. For example, synthetic fertilizers are fossil fuel-based, and taking into account fertilizer and transportation, it takes more than a calorie of fossil fuel energy to produce a calorie of food energy from corn.

Keep up the good work. I think it's usually people with dogmatic fixed positions who have the energy and motivation to write political stuff - your blog is a breath of fresh air.

Jared said...

Thanks for writing, Jen. I appreciate the compliments.

I haven't read Pollan's book but I have heard about it. If I can lock myself down and knock out my current stack of books I'll add that one to the list :)

It will be interesting to see if the skyrocketing global food prices force an actual debate on agricultural policy and its increasing level of intersection with energy policy.

This is an area I want to learn a lot more about as I suspect there are some hidden issues/challenges as you are indicating, but also some potential economic development opportunities as well (e.g. through more economically viable and environmentally friendly biofuels like sugarcane ethanol (as opposed to corn-based ethanol)).