What the Oil money is doing
This is an article by the Washington Post: Oil Price Rise causes Global Shift in Wealth.
It looks at how different countries are responding based on whether the oil money is flowing in or out. Some countries are spending, but not necessarily to diversify their economies. Some are flexing their muscles now that their financial’s are healthy. Some are adapting, some are having problems adapting.
“With crude oil prices nearing $100 a barrel, there is no end in sight to the redistribution of more than 1 percent of the world’s gross domestic product.”
“The benefits, to the tune of $700 billion a year, are flowing to the world’s oil-exporting countries.”
Some particulars that caught my eye that is looking through the lens of global competition:
Referencing Russia who is using their new wealth to flex there mucsles:
less than two years after the collapse of the ruble and Russia’s default on its international debt, the country’s policymakers worried that 2003 could bring another financial crisis. The country’s foreign-debt repayments were scheduled to peak at $17 billion that year… Russia’s gold and foreign-currency reserves have risen by more than that amount just since July. The soaring price of oil has helped Russia increase the federal budget tenfold since 1999 while paying off its foreign debt and building the third-largest gold and hard-currency reserves in the world, about $425 billion.
In China, the citizens are hurting and starting to get distrustful as the government raises the price.
Rumors circulated that gas stations or the government was hoarding fuel in anticipation of further price increases, prompting the official New China News Agency to warn that anyone caught spreading rumors about fuel-price increases will be “severely punished.”
Yet it still subsidizes fuel. As a result, consumption this decade has skyrocketed at an 8.7 percent annual rate despite soaring prices and concerns about the environmental impact of profligate fuel use.
Yet Japan has been weaning itself off oil for years. It now imports 16 percent less oil than it did in 1973, although the economy has more than doubled. Billions of dollars were invested to convert oil-reliant electricity-generation systems into ones powered by natural gas, coal, nuclear energy or alternative fuels. Japan accounts for 48 percent of the globe’s solar-power generation — compared with 15 percent in the United States. The adoption rate for fluorescent light bulbs is 80 percent, compared with 6 percent in the United States.
President Carter had us on a program to be 20% solar by 2000. Then Reagean got in and removed the solar panals from the White House. And we all have heard about Brazil.
Britian national average gasoline price topped 1 pound per liter, or about $8 a gallon, for the first time this week because of record oil prices.
“It’s different from the United States. Here, everyone has just accepted that it is
While British drivers are feeling the pinch, the government is gaining revenue, Skrebowski said, because about 80 percent of the cost of gas is tax. Because Britain produces almost all the oil it consumes, its economy has been cushioned against increasing oil prices, Skrebowski said.
Their production is going down so they are going to have to change. As I have read they are changing in that they have two wave generator plants running and not as models.
I think we need a different energy policy.