Sep
19
Understanding Oil in the Economy
September 19, 2007 | Leave a Comment
The Oil Drum has posted the first of three articles by “Gail the Actuary” today September 19, 2007. Having read it and the comments I have to say Gail left the premier issue out of the title. Its more basic and on the point of understanding the role of oil in our economy. It’s a very good article and read with its full dimension in mind very informative and I find I agree with the early history she describes and the story line and economy factors that work with oil in the economy.
Over the course of some seven points Gail makes clear that the availability, development and use of fossil fuels powered a period of incredible economic expansion. Gail explains this rather well; it’s just that her sophistication will overpower most people in part 5. But take your time and part 5 will fill itself out nicely.
See: http://www.theoildrum.com/node/2977#more
The benefit in reading this, is it gives some sense of the role fossil fuel has played in the evolution of the modern economy. More over it makes uncomfortably clear that disruptions would be significant disasters for a large part of the planet’s population.
The point Gail is trying to make is that “peak” oil as a monetary issue may have been back in 1999 when costs made up a 6% share of the US Gross Domestic Product. By 2004 that had increased nearly 25% to 7.4% of GDP.
This is an important observation. Its backed up in the comments by “Professor Goose’s” comment that links to other comments where the opening one at the bottom of the page reflects on the observation that oil use per person in 1980 was 5.25 barrels per year sinking to 4 barrels today. That makes Gail’s observation all the more important.
The article offers a great deal of insight and food for thought. Whether you are a policy maker, a business investor or a consumer these observations offer some clarification on how and what can guide your choices in the future.
I look forward to the forthcoming two parts. If they offer as much depth and breadth as this piece, reading is time very well spent.
