Looks like we're on our way to $100 a barrel oil, as prices hit a record $82 a barrel today. There is fear of hurricanes, energy infrastructure terrorist attacks, and the soon-to-be-perpetual "tight inventories" representing the razor-thin margin between a functioning world economy and something that can be only speculated about.
And that doesn't even take into account economic efforts to mitigate global climate change.
Time to start speculating...
Some nations will be hammered more when we hit $100 a barrel, particularly those that heavily rely on energy imports (the US, China). Also hit will be nations with diminishing energy exports (Mexico) as a main source of income. The UK will become more like the US, a net importer or energy, as it must turn to imports as its North Sea production continues to decline.
Al Queda was responsible for this week's oil pipeline explosion in northern Iraq. A shadowy Mexican leftist group performed the job on natural gas and oil pipelines last week and earlier this summer. I wrote about last week how these acts will become more typical.
When considering its regular supply, processing and delivery is the the basis for our current economy, oil in is an extremely vulnerable resource. In remote regions, which is generally where energy is extracted and transported from, it's right out in the open to those that want to do economic damage or create international headlines. And it's in the direct path of increasing climate risks, particularly in the U.S. Gulf Coast--the heart, liver and arteries of national energy metabolism--which tops the list as most likely to receive the brunt of the Atlantic climate's more frequent cycle of hurricanes and tropical storms.
Finally, whether it's Al Queda trying to inflict damage on US economic strength and its international energy business, or leftists protesting in Mexico, or locals trying to stop oil well open gas flaring and political corruption in Nigeria, energy infrastructure is an easy target, with maximum payback.
In spring 2006 I devised a ranking of US cities most prepared and worst prepared for $100 a barrel oil, which was covered in the New York Times, CNN and other major media. At the top were cities like New York, Boston, and Chicago, with good public transit and well-defined urban centers with public transit-oriented economies.
At the bottom of the list were cities like Oklahoma City and Columbus, Ohio, with their less than 2% public transit use, metro-area sprawl and complete dependence on autos and shipping trucks to keep their economy functional. Not that New York or other cities won't be hard hit by "100b," but citizens and businesses in those locations will at least have some options for getting people to work, dining, entertainment and retail, as well as shipping ports.
And of course, there is clean tech development of renewable energy, alternative fuels, energy-conserving green building and other technologies, the tech boom of the next few decades. Currently these businesses or urban centers of innovation aren't on the Gulf Coast, so they may fare better than an offshore rig, in so many ways.