The slippery slope that is oil… a “What if?” simulation
This is three weeks old, but here’s an interesting press release that discusses the severity of America’s potential oil crisis. Two groups — Security America’s Future Energy (SAFE) and the U.S. National Commission on Energy Policy — co-sponsored an oil crisis simulation event called Oil Shockwave that shows how a series of world events can quickly lead to crisis at the pumps.
Here’s what happens in a scenario where just 3.5 million barrels of oil are quickly removed from a global market of more than 83 million barrels:
* Gas prices in the U.S. soar to $5.74 (U.S.) per gallon.
* Global oil prices rise to $161 per barrel.
* Consumer confidence plunges by 30 per cent.
* A 28 per cent drop in the S&P 500.
* A drop in GDP over two consecutive quarters.
“This simulation serves as a clear warning that even relatively small reductions in oil supply will result in tremendous national security and economic problems for the country,” stated Robbie Diamond, president of SAFE and — strangely — a Canadian who went to school at the University of Toronto.
I say strangely because you’ve got to ask why a Canadian is helping America fight to secure its energy future. The obvious answer is that Canada is just along for the ride, and Diamond realizes that change is necessary south of the border for change to happen at home.
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
