A Crude New Year
Only two days into 2008, the price of oil rose to the long anticipated $100-a-barrel milestone on the trading floor of the New York Mercantile Exchange.
Reasons for the record high have been attributed to recent geopolitical tensions, among other environmental and financial factors. Unrest in Pakistan following former Prime Minister Benazir Bhutto's assasination in late December saw crude prices jump, and a series of militia attacks in a key Nigerian oil city on New Year's Day added to fears of petroleum supply disruptions worldwide.
Compounding these market-destabilizing events is an insatiable thirst for oil in developing China and India – an ever-growing demand for fuel that some worry can no longer be met by global production. Proponents of Peak Oil theory, who hold that the world's petroleum reserves are nearing (or have already passed) maximum output, are trumpeting the $100 mark as proof of an emerging oil scarcity.
Whether a harbinger of global economic decline, or a call-to-arms for conservation and efficiency, the three-figure price represents a momentous event in the history of the Oil Age. As quoted in a Bloomberg.com article, energy anaylst Rick Mueller observes a deeper significance in the $100 landmark, a shift in the public consciousness regarding energy costs: "This is an important psychological number ... Everyone has been expecting this since early December."
Others view the event as a crucial turning point in the petroleum economy – a threshold crossed, from which there is no going back. "These prices are here to stay," asserts Emil Pena, a former assistant secretary of energy for President Clinton and oil industry consultant. "We have to come to grips with these high prices." The future of cheap and abundant energy is being seriously called to question, along with the fate of our expanding, energy-dependent global society.
As the major events on the horizon for 2008 come into focus – a Presidential election in the U.S., the Olympic games in Beijing – the worldwide mood is one of tense anticipation. It is impossible to know what profound changes await us in the new year, but we can be assured, they have already begun.
Image by Gabriel Paulus, used under Creative Commons license.