\”A supply crunch appears likely around 2013 … given recent price experience, a spike in excess of $200 per barrel is not infeasible\”.
What effect would a barrel price of $200 have on industrial economies, should that spike be sustained for any length of time? We would witness endemic global market disruption, reductions in agricultural yield, increased transport costs for both finished goods and raw materials (true pessimists would add an oil war or two for good measure). The shockwaves would be felt everywhere, although as ever, the poor will take the brunt of it.
And yet when the price of oil shoots up, we use less – meaning we output less CO2. So let me rephrase my question: what effect would a barrel price of $200 have on the CO2 output of nations? It would certainly force a substantial reduction. It would be violent change, but that is the price of hubris. The longer we wait, the greater the cost when we finally act, when everything is rushed because the public furore can no longer be ignored. Remember the fuel protests? The UK ground to a halt in a matter of days at the behest of a few thousand protestors. Scale that up by an order of magnitude and you can see what a $200-an-oil-barrel world might look like, at least until we got used to it.
Personally I\’d say the effect wouldn\’t be all that much in the UK. We might drive a little more, have a little more money in our pockets, but $200 a barrel oil wouldn\’t make that much difference.
For oil in the UK is currently at $300 a barrel.
160 litres to a barrel, £1.17 to the litre, $293 a barrel.
So, what would be the effect of peak oil?
Not a lot really.