Apparently, saboteurs triggered a cascade of power blackouts that dramatically curtailed oil exports from Iraq. This brief disruption cost the country nearly $60 million in lost exports and consequently rattled world commodity markets.
The recent dramatic increases in gasoline and oil prices have made many Americans sit up and question what is driving the price of petroleum. Our dependence on foreign oil has made America increasingly vulnerable to any variations of scenarios similar to what happened in Iraq.
A mock exercise called Oil Shockwave was recently conducted to simulate various global events that could dramatically impact and curtail American supplies of oil. This bipartisan exercise involving members of America’s energy, military and intelligence communities revealed some shocking possibilities should major disruptions impact our access to foreign oil.
In this exercise, by removing only 3.5 million barrels of oil, from a global total of 83 million barrels resulted in:
- Gasoline prices of $5.74 per gallon;
- Global oil price of $161 per barrel;
- Heating oil prices of $5.14 per gallon;
- Fall of gross domestic product for two consecutive quarters;
- Drop in consumer confidence by 30 percent;
- Spike in the consumer price index to 12.6 percent;
- Ballooning of the current accounts deficit to $1.087 trillion;
- Decline of 28 percent in the S&P 500;
- Aggressive pressure on the U.S. from China to end arm sales to Taiwan, and;
- Demands from Saudi Arabia for changes to U.S. policy regarding the Mid-East peace process.
Obviously, our dependence on foreign supplies of oil, as well as our administration's continued lack of an energy policy that addresses this, imperils all Americans and our futures.
With the very real possibility of a future that could be dramatically different than our current auto-centric daily lives, Americans continue to sleepwalk through their daily trips to the mall, Wal-Mart and lengthy commutes, oblivious to what the future may hold for them.
FMI about the Oil Shockwave exercise, you can read about it here:
You can also visit the site for Securing America's Future Energy to learn more.
NPR also carried a program that I was less impressed with, particularly due to some of the "players", particularly oil company shill, Daniel Yergin. Still, the program gives an overview of the issue, albeit with few if any real solutions.
For slightly more provocative views regarding peak oil, might I suggest the Oil Empire site.