$200 Oil

Sir Richard Branson says oil will be $200 per barrel by the end of next year and that it will cause major disruptions in the airline business.

The founder of Virgin Group and president of Virgin Atlantic said airlines operating older, less fuel-efficient fleets, such as United Airlines and American Airlines, could be forced into administration (bankruptcy) as a result of the relentless rise in oil prices.

At $200 oil, many businesses that have relied on cheap fuel will not make sense. WalMart runs a 10,000 supply chain from China that will be increasingly stressed by high transport prices. The Industrial agriculture system in the U.S. which runs on big machines and lots of oil based fertilizers could come under pressure.

Consumer credit as a percent of income is around 124% and that’s the highest since at least the 1960’s. I don’t think we can depend on putting our future on a credit card. We better start thinking about solutions pretty soon.

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0 Responses to $200 Oil

  1. BobbyG says:

    See “0.0143%” on my blog. Yeah, we friggin’ better get busy.

  2. Tennessee Williams Shakespeare says:
  3. Tennessee Williams Shakespeare says:

    Dammit. Okay, I am going to try again.

    Not only that, but this:


  4. Rick Turner says:

    Well, the Amish are going to do pretty well with all this… They’ll have to start hiring “English”.

  5. Adam says:

    Jon’s first sentence: “by the end of next year” seems far more urgent than the Telegraph’s quote of “by 201o” even though its exactly the same timeframe. An interesting perspective on framing the argument.

    For those whom the distance & temperatures are appropriate I heartily recommend investigating the purchase of a scooter – my Vespa costs ~$A9 per week for 200km of commuting to/from work at a fuel price of $US5.70/gal


  6. michaelmeme says:

    For those whom the distance & temperament are appropriate I recommend investigating a bicycle. My fuel expenses are measured in pounds lost.

  7. Mark Maglio says:

    my bike, a one-time investment of $350 saves me about $600 a month in gas/repairs/payments/fees. Not including parking tickets.

    Move to the city. Get a bicycle. Ride safe.

  8. Rick Turner says:

    Bushco must be very happy. Their friends, the Saudi Wahabbis are doing great! George will have plenty of time to go riding about in the desert in a gold plated Hummer tossing Peregrine falcons in the air pretty soon. He hasn’t quite realized that he has to play bottom to the Janissaries, though…

  9. Azmanon says:

    Not to mention where that $200 of each barrel goes (out of the country) and who’s pocket it ends up in.

    Not only should one get a bicycle, but starting up some bicycle factories for all the unemployed people might not be a bad idea as well.

    The question here is… is there anything that will make people more proactive about finding solutions or will the majority wait until its already too late?

  10. Kenneth says:

    Azmanon- They will wait, they always do and it is always too late.

  11. Ken Ballweg says:

    Oh, obviously wait until it is “too” late, in the sense of having to have an anvil fall on their heads to convince them change is necessary. As long as they have a spin machine telling them zero government, no taxes, no population control, and free market will solve everything a significant portion of Americans will resist changing certain bad behaviors. Most of us will continue to overeat, ride in inefficient cars, oppose paying for infrastructure upgrades, accept the nostrum that “the money is there for government to fix….. (x,y,z), it’s just being misused.” and hunker down.

    I do suspect that if Obama wins that we could see a different, more accountable tone, but I really don’t know if the National Will will be there to accomplish more than major energy alternatives. And that will be sold as a way to hang onto current overextended standards of living.

  12. Ken Ballweg says:

    Personal opinion is that it will take a major depression to get people to change significantly, and the odds are much more likely that we will have a prolonged recession with localized depression areas more similar to Japan when their economic boom broke.

  13. Tennessee Williams Shakespeare says:

    And this from the WSJ:

    Energy Watchdog Warns
    Of Oil-Production Crunch


  14. Ken Ballweg says:

    Here’s where China will eat our lunch.


  15. Rick Turner says:

    Ken, that article is very interesting…but aside from the “put the spent nuke golfballs in lead drums in the cellar” (paraphrased), it didn’t say a damned thing about long term disposal of spent fuel…which is still dangerous, unless I’m really missing something. Can you say, “Terrorists with dirty nuclear bombs”?

  16. Dan says:

    I paid $4.19 for gas this morning. It was $4.07 last week, and $3.89 the week before that. I’m starting to wonder if the dollar can stand up to much more; it continues to buckle, which leads to higher oil prices, which leads to more buckling.

    I’m starting to think that the end of the world as we know it is right around the corner.

    Hope not.

  17. Rick Turner says:

    The changing times will be difficult, but the end result could be better than ever…

    The sooner we slow down burning oil, the sooner the world will start to heal.

  18. Ken Ballweg says:

    The pollution from coal and oil production actually does more environmental damage than spent fuel for nukes. The technology the Chinese are considering includes a much different level of potential contamination, and waste disposal than the classic fuel rod models of Three Mile and Chernobyl.

    The problem nukes face is that those of us (self included) who were very nervous about the fuel rod plants did too good of a job of PR convincing a nation that nukes are off the table and Chernobyl, more than anything else, sealed the deal.

    To use nuclear power we would need to 1) reverse that PR, 2) adopt the low output model the Chinese are going to be using, 3) force plants to standardize construction and operation so there is a trained workforce that can work in any plant, rather than having to learn the complicated made to order madness of the current US nukes, and 4) go ahead and use the salt domes for disposal.

    There aren’t too many ways to generate energy that don’t require a polluting infrastructure either to build or to operate. Nuclear power is a lot like developing hydrogen, you need to focus a lot of research to address the problems rather than dismissing it out of hand.

  19. Ken Ballweg says:

    Oh, and the risk of “terrorists with dirty bombs” doesn’t increase all that much, since they are going to use the spent fuel from existing rod based reactors before they would use this stuff. Much easier to get, and much more contamination for the buck.

    Risk assessment requires setting aside notions of how you would not like to die, and really looking at how you are likely to die. Terrorists are so low on the killing chain that they are not worth the level of effort we put into stopping them versus the lives that could be saved if we put a major portion of that money towards other areas of risk mitigation. Can you honestly say that Iraq has saved more American lives for the dollar cost per life saved than other investments would have? I seriously doubt it.

  20. Dan says:

    I for one, whether I’m wise or stupid, will never again believe any talk about how nuclear energy can be clean, cheap and safe. I will always believe that nuclear energy is dirty, expensive and dangerous.

    As a single example, any nuclear plant generates millions of gallons of contaminated water that must be stored indefinitely (effectively forever). It’s not just fuel rods. And fuel rods are relatively easy to store. Water erodes whatever container it’s in over time.

    The people of the 23rd century, if there are any, will curse us for the mess we’re handing them with nuclear waste.

    Like wise for the people of the 33rd century.

    And 43rd century.

    And 53rd century.

  21. Ken Ballweg says:

    That reaction is exactly my point of why we are going to get hind tit on this one. You’re thinking old style reactor Dan.

    Read the Wired article. Water is not the heat exchange medium.
    “Instead of superhot water – intensely corrosive and highly radioactive – the core is bathed in inert helium. The gas can reach much higher temperatures without bursting pipes, which means a third more energy pushing the turbine. No water means no nasty steam, and no billion-dollar pressure dome to contain it in the event of a leak. And with the fuel sealed inside layers of graphite and impermeable silicon carbide – designed to last 1 million years – there’s no steaming pool for spent fuel rods.” (from Wired)

    And, again, the pollution from coal and oil will, on the whole, be more significant than nuclear waste, even the badly handled version 1.0 models.

  22. Ken Ballweg says:

    Oh, and did I mention it has the potential for producing hydrogen more efficiently than any current method.

  23. Jon Taplin says:

    Ken- I think you are really right on this issue. My friend Stewart Brand has come to believe that small nuclear reactors powering the electricity grid is the only way to quickly get off oil and coal. Clearly and electrically powered high speed rail system in the main commuter corridors could replace a huge amount of inefficient commuter air traffic as well as cut down on freeway congestion between major cities.

  24. Ken Ballweg says:

    The carbon footprint for air travel and the space shuttle are the elephants in the room. Until those change they will offset just about any changes in fuel efficiency in cars and coal use for power generation, in terms of continued carbon build up in the atmosphere.

    Subsidize rail at the level of air, and you are right Jon, you would make an impact. But you would have to power the trains with something other than new coal fired plants or it could end up a push.

    Funny to hear that Brand has come around to small nukes. Maybe there is hope.

  25. beingajerk says:

    The energy crises will be solved when people decide to stop using so much damn energy. Damn Americans and their lazy habits. We should install a treadmill in every American’s house, and make them run to fuel their own energy needs. Hopefully this will take away the gracious ” Most obese country in the world ” award…. I like in a place where Diesel is 5.15 a gallon…
    Read my opinion about why gas prices are so expensive
    Also if you have time, check out my article on how we can lower use of gasoline and fix the economy at the same time.

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