David Sweet

If there was an upside to the global recession it is that it gave us a temporary reprieve from the pressures from the rising demand and price of oil. We were lulled into another cycle of energy apathy by a period of relatively low and stable prices. Well friends – the party is over. Oil prices recently broke through the $100 per barrel level and it is anyone’s guess where they will wind up.

The events in Tunisia, Egypt, Bahrain, Libya and elsewhere have been an amazing human and political drama to watch unfold before our eyes. Once the power of information is set free through the social networking tools of our day, there is no putting the genie back in the bottle. Freedom is contagious, addictive and spreading like wildfire through countries where deep-rooted problems were kept out of sight and suppressed.

That is not to say that the global democracies do not have many of the same problems. However, we manage to get it out of our system every election cycle through civil, or often not so civil, debate. As seismic experts will tell you, it is not a bad thing to have a small seismic shift every now and then, as it prevents the catastrophic event from being unleashed.

If you recall, when the Soviet Union fell, it was in no small part due to the economic situation brought about by low oil prices, which caused an economic collapse. The difference now is that the entire world – developed as well as developing economies – is growing ever more dependent on the oil producing regions in the Middle East and North Africa. As the global economy expands, the symbol for freedom and success is often embodied in the purchase of a new vehicle. It matters little that, even in places like traffic clogged Beijing, governments have severely restricted the ability of consumers to purchase new cars. The thirst for oil appears unquenchable.

The true wild card in this situation is Saudi Arabia, which produces about 10% of the world’s oil. The Saudis have already experienced terrorist attacks on their oil fields. Notwithstanding the magnitude of its rulers’ oil wealth, these riches have not trickled down to the country’s masses. In recent days, King Abdullah returned after a three month absence to announce $36 billion of social and economic programmes to douse the flames of any simmering revolution. By the time this article goes to print, we may know if the plan has worked. If not, there is no telling how high the oil price shock wave will grow.

Decentralized energy systems are not the entire answer, but they are part of the answer. Electric vehicles and plug-in hybrids offer options to reduce the dependence on oil and provide decentralized power. The natural gas revolution underway, that has caused even greater decoupling of oil from natural gas prices, would seem to make natural gas vehicles a ready-made solution as well. However, we have all seen these spikes come and go, and we always seem to hope for the best rather than prepare for the worst. Stay tuned – this chapter in history is far from over.

The difference now is that the entire world – developed as well as developing economies – is growing ever more dependent on the oil producing regions of the Middle East and North Africa.

David Sweet
Executive Director,
WADE dsweet@localpower.org

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