Exactly a year ago, Paul Krugman wrote an article entitled The Oil Cunch. He started off with:
Before the start of the Iraq war his media empire did so much to promote, Rupert Murdoch explained the payoff: “The greatest thing to come out of this for the world economy, if you could put it that way, would be $20 a barrel for oil.” Crude oil prices in New York rose to almost $40 a barrel yesterday, a 13-year high.
Rose almost to $40 per barrel; about a year later, it is hovering more or less above the $50 per barrel benchmark. There was a time when lots of people thought $50 per barrel has too much fantasy in it. Now, nobody dare to question the $60 level too much.
The Economist latest edition has oil has its main focus. From one of its articles, it is clear than the team at The Economist doesn’t approve the plan to drill ANWR. The magazine bills such action as “This is mad”, or was it “This is madness”.
I agree so much that this is madness. Drilling the nature reserve in Alaska won’t alleviate the current crisis. The drilling return on investment won’t come immediately and by the time the extraction hit full speed, given the increasing global demand and little sign of slowing demand in the near future, oil from ANWR won’t be able to make a noticeable impact. It won’t make a lasting impact at all.
Believing the act of opening ANWR would relax the oil price is similar to believing one is Superman; able to stop a speeding bullet train by standing in the middle of the track, head to head.
The only solution is renewable energy. Or nuclear. We need to act now. Oil won’t last forever; renewable will.
p/s – I’ve come to a conclusion that The Economist is environmentally-friendly.
pp/s – can you feel it?
Because I do.