Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Pinched at the Pump
Elizabeth Douglass, L.A. Times
Stopping for gas on a recent evening commute, Joseph Godino paused to make a call before feeding his credit card into the pump’s built-in reader.
He listened as a recorded voice delivered welcome news: His card still had $88 of credit available.
The gas-up was a go.
“I had to phone up to find out if I had enough credit on there to fill up,” said Godino, 58, whose workday round-trip commute is a whopping 200 miles.
“The gas is just really hurting me. I don’t know what to do…. I can’t quit my job or I’d lose my house.”
(16 July 2006)
Britain and world set for ‘hard landing’
David Smith, Times Online
FEARS are growing of a sharp slowdown in the global economy, triggered by big increases in energy prices and rising interest rates. Economists at HSBC say there is a greater risk of a “hard landing” for both the world economy and Britain.
Oil prices hit a record of more than $78 a barrel on Friday, driven up by the escalating Middle East conflict. At the same time the Bank of Japan ended its zero interest-rate policy by raising its key rate, for the first time in six years, to 0.25%.
The Japanese move was a further signal that the global era of cheap money is over…
Peter Dixon, an economist with Commerzbank, said dearer oil added to the risks. “If it’s just a temporary spike, then we’ll carry on as before,” he said. “But if this goes on for any length of time and oil continues to rise, we have a problem.”
Muhammad-Ali Zainy, a senior energy economist at the Centre for Global Energy Studies, said: “Oil could hit $80 or higher this week if the situation worsens. If a shortage of oil develops, the price will go up tremendously. It will skyrocket. We might see it hit $100 if, say, a hurricane in the US causes some destruction to facilities.”
(16 July 2006)
Economic Gains Mask Underlying Crises – Report
Haider Rizvi, One World
Despite unprecedented growth in recent years, the world economy has not only failed to take care of the planet and its health, but also the basic needs of billions of its inhabitants, most of whom are condemned to live in slums with no safe water to drink, according to a new study released by a U.S.-based independent think tank.
Economists and environmentalists associated with the Washington, DC-based Worldwatch Institute, which authored the 160-page study, say last year the global economy experienced record increases in production, consumption, and growth, but that trend did not translate into any improvement in the living conditions for a vast majority of the world’s population.
“Nearly one billion people still live without the barest essentials,” says Erik Assadourian, who directed the project.
(14 July 2006)
Related E&E TV video: “During today’s OnPoint Erik Assadourian, project director of the Worldwatch Institute’s “Vital Signs 2006-2007,” discusses the findings of this latest report and predicts a collapse of resources if the use of fossil fuels is not diminished.”
Assadourian stops short of criticising the concept of growth, despite a direct question. It seems misguided that economic growth, a process which at this stage of human expansion is in fundamental conflict with planetary health should be expected to take care of it. We are entering an era of contraction or descent so we had better quickly lose our obsession with growth as the solution to everything.
This Washington Post editorial from April 2006, The Case for Economic Growth, subtitled ‘It may not lift all boats as it used to, but it’s still essential’, admits that:
The cult of gross domestic product is now open to question. Because of rising inequality, growth is a less reliable provider of higher living standards to most Americans, as earlier articles in this series have noted. And a new area of research, blending psychology and economics, challenges the assumed connection between income and happiness.
The two remaining arguments for growth — that it creates an economic environment conducive to racial optimism and tolerance, and that it helps maintain US supremacy in its fight for all things good — are less than impressive. This article was mentioned by Herman Daly at the Sustainable Energy Forum 2006.
-AF
Is Oil at the Tipping Point?
Robert J. Samuelson, Newsweek
Oil markets are operating on fear. The Middle East fighting could cause higher prices and threaten the economy.
—
It’s been a minor miracle: the presumed power of soaring oil prices to cause an economic crisis has turned out to be more myth than reality. We Americans have grumbled loudly about rising gasoline prices while tanking up as if almost nothing has happened. Over the Fourth of July holiday, a record 40.7 million Americans took trips of more than 50 miles, up 1.2 percent from a year earlier. In June, gasoline consumption exceeded 9.5 million barrels daily, a monthly record. Meanwhile, the economy seems strong. The jobless rate of 4.6 percent is surely close to “full employment.”
The fighting between Israel and its neighbors—which immediately sent crude prices to $78 a barrel—poses this question: is our good fortune about to expire? Although the tentative answer is no, it cannot be delivered with complete confidence. Economist Nariman Behravesh of Global Insight thinks the economic expansion will continue even though oil prices may drift up to $85 a barrel. But he quickly qualifies his prediction. A major Persian Gulf supply disruption could cut oil output by up to 5 million barrels a day (out of a total of 85mbd). Prices could go to $120 a barrel. The economic effect would be “devastating.” For every $10 a barrel, gasoline prices rise by about 25 cents a gallon.
Oil markets are operating on fear. The gap between demand and productive capacity is tiny, perhaps 1 million or 2 million barrels a day. Because oil demand is what economists call “inelastic” (meaning that consumers see fuel as essential and curb their buying only slightly as prices rise), even modest threats to supply can create big price increases.
(17 July 2006)
