Global economy to get 'shock of its life' when oil hits triple digits

[Speck Tater]

Energy expert and former CIBC economist Jeff Rubin says he's doesn't give a hoot if politicians read his book. When oil prices soar, 'the folk' will force the political players to do the right thing.
By Kate Malloy
Jeff Rubin says global economy will get the "shock of its life" within 12 months of the end of the recession when oil prices hit triple digits and the age of globalization starts to come to an end.

The former maverick chief economist for CIBC's World Markets for about 20 years and author of the new book Why Your World Is About To Get A Whole Lot Smaller: Oil and the End of Globalization, says demand for oil will outstrip supply, food prices will soar, and countries will be shocked into growing their own food, manufacturing their own products, and paying a lot money more for everything.

There will be winners and losers.

The triple digit oil prices will do more for the environment "than 100 Kyotos," he says, but if the world doesn't get off oil, "the values of tolerance and equality may turn out to be artifacts of the era of cheap oil, and the world may face political and cultural upheaval in the stagnant economy of decades ahead."

more at: http://www.hilltimes.com/html/index.php?display=story&full_path=2009/june/15/qa_rubin/&c=2

[Warpy]

1. I agree that high oil prices will finally restart what Carter tried to do

30 years ago and that's a very good thing. Any country that doesn't pour resources into getting off the oil spigot will be left sitting in a patch of sticky black goo while the rest of the world moves on, sitting there completely unable to compete in the world marketplace.

That's what this is about, not hippie granola pie in the sky thinking, as the far right would have us believe.

This is our survival.

However, in the short term, it will be miserable. Expect to see even higher food prices along with crippling fuel prices.

[konnichi wa]

2. Well it was 125 a year ago...

:shrug:

[Davis_X_Machina]

3. Short term ---

--- massive substitution by coal, even dirtier to burn, more dangerous to extract.

The 100 Kyotos come after every developed country turns into East Germany for a decade or two.

[Juche]

14. I've heard a meaningful energy transition will take 10-20 years

So yeah, its going to suck for a while. Everything will become more expensive. In the wealthy world that isn't too bad, but in the developing world that can be a life/death issue if food goes up 300% in cost.

However Europe survived the black plague before we even knew what germ theory was. So humanity will survive this too. It just won't be pretty. Even back when we were using almost no oil (around the 1850s) world population was still a billion.

So I disagree with the peak oil theorists who say that peak oil will spell the end of humanity. Our species will survive. We survived w/o oil for 200k years. However is it possible that there will be a miserable transition period for a few decades, that quality of life and purchasing power will go down and that millions starve? Yeah.

I'm hoping we have our shit together by the 2030s.

[GliderGuider]

15. No peak oil theorist says it will spell the end of humanity.

A few say it may spell the end of our civilization as we know it if the decline starts in earnest within the next couple of years, the post peak decline is very steep and we make some bad choices along the way. I used to think that way, but I changed my mind for a number of reasons.

We survived without oil for 200,000 years, but for most of that time the total human population didn't exceed a few tens of millions. The rapid loss of oil supplies would drastically change our civilization, and a large-scale reduction in population (up to the billions) is within the realm of possibility, largely due to increased infant mortality. Under those circumstances civilization is likely to fragment, collapsing in some places but staying relatively intact in more fortunate areas.

Of course, even "relatively intact" portions might be unrecognizable in the terms we're used to. We in the industrial West have largely lost the feeling for how enormous the variation in human circumstances can be.

[Juche]

16. I don't agree with the infant mortality part though

You are right, we could see billions die if peak oil is abrupt and we do not deal with it properly. But I don't think infant mortality will be the reason since the big factors in that are the spread of infectious diseases, which we should still be able to control even w/o oil as the biggest factors of that are things like water, sanitation, vaccinations, antibiotics, cleanliness, etc. However malnutrition could be a giant problem and malnutrition increases childhood mortality.

I tend to think that even if civilization did collapse, it would eventually come back within 100-200 years or so. We already will have the knowhow locked away, we will just have to rebuild using sustainable infrastructure.

[kristopher]

4. About to get a whole lot smaller???

Isn't the effect being described the opposite of the "small world" as most people envision it? Because of the increase in transportation speed and the decrease in cost the world got smaller. Higher transportation costs due to more expensive energy would therefore make the world larger, wouldn't it?

But as to the main point, I don't think we are able to separate the economic problem from the energy problem. If the global economy is going to go into shock because of high fuel prices, then the downturn will once again drive down fuel prices. This pattern will recur until an equilibrium is established and either the energy problem is addressed (via successful replacement of fossil fuels with alternatives) or a permanent lower standard of living is accepted as a global norm.

[Speck Tater]

9. I wondered about that too. Here's how I figured it out....

Right now you can easily reach anywhere in the world via air transport. As fuel prices go up you can only afford to reach a smaller "neighborhood" of, say a couple hundred miles. Then if fuel became so expensive you couldn't afford it at all you could only reach a tiny neighborhood of whatever distance you could comfortably walk.

So it's not that "the" world is getting smaller, it's that "your" world is getting smaller, in absolute number of miles you can travel.

[timeforpeace]

5. Hello? Oil was over triple digits already, Global economy currently in shock.

Didn't do much for the environment, though.

[The Croquist]

6. As opposed to last year

when oil prices hit 140.00 a barrel last summer? Did that give the economy the 'shock of its life'? Two shocks of in life in one year or so is a lot of shocks in a life.

On edit:

Sorry timeforpeace.

I started to reply, got a phone call and after I sent it saw that you had beaten me to the punch.

[madrchsod]

7. i`ll be dead by then.......

so you guys are on your own! :sarcasm:

[pscot]

10. The problem is, you can't count on that

I always figured I'd be dead by 30, and here I am in my "golden" years and it's the 21st century. Imagine my surprise.

[Optical.Catalyst]

8. I think I am going to stock up on a few things

If I had the money, I would buy a set of heavy duty gardening tools like hoes, rakes, and shovels.

I am definitely going to hit the Dollar Store and collect bagful of their cheap vegetable seed packages.

A revolver and a shotgun with a supply of ammunition would be on my list too (if I could afford another gun).

[IrateCitizen]

11. Check auctions, tag sales, etc. for garden tools

My parents, both retired, go to auctions around where they live. I can't tell you the number of good, used tools my dad has brought over saying, "I thought you might be able to use this, it only cost $2 at the auction...."

Beware the cheap vegetable seed packages -- you get what you pay for.

I'd add one other thing to your "to do" list -- getting to know your neighbors better and maybe even develop a little bartering network of skills and services.

[Optical.Catalyst]

12. I have bought some seeds in bulk at a local feed store

The problem there is you ladle the seeds into a plain paper bag with a scoop and you are on your own. I have put sticky labels on small glass jars (with metal lids!), but I worry that moisture in the jar may ruin the seeds.

I got a pick like tool with a wide blade at a yard sale. I must have looked the sight carrying this thing down the road on my bicycle.

I planted some Dollar Store pepper seeds that were dated 2002, and they are growing fine. I have a selection in an old school lunch box in my shed.

[NickB79]

13. Seed storage tips

Put either powdered milk or dry rice in the bottom of the jar to absorb moisture, and only seal the jars on days with low humidity. Old prescription drug bottles work really well for this. Once sealed, don't re-open until you absolutely have to the next spring. Also, it helps to refrigerate the seeds if you can to extend shelf life.

And if you are planning to rely on seed saving from year to year, don't grow hybrids. Look for open-pollinated and/or heirloom varieties. They breed true from year to year, unlike hybrids. Just make sure that you space different varieties sufficiently apart so they don't cross pollinate (for example, yellow squash can cross with zucchini if they're within 100 ft of one another).