With crude oil poised to break $100/barrel and gas over $4/gallon in the Bay Area, I heard a report on NPR this morning saying that the spiking prices were due primarily to “speculation”.
My first response to the radio voice was that “speculation” is what happens when demand exceeds supply – and that it is probably not going to go away. Which means that energy prices are just going to continue to climb.
The news last night talked about a similar rise in natural gas and coal prices.
The reason for this rise is that our energy demands in a rapidly developing global market (think India and China especially) are now outstripping our supply.
This news article from the BBC this morning confirms that.
“The global demand for energy is set to grow inexorably through to 2030 if governments do not change their policies, warns a top energy official.
Nobuo Tanaka, executive director of the International Energy Agency (IEA), said such a rise would threaten energy security and accelerate climate change.
He said energy needs in 2030 could be more than 50% above current levels, with fossil fuels still dominant.”
Again, there’s some economic slack that can be taken up and adjusted for here in the US. The real moral challenge is going to be that at the same time that is happening, and dollar is sliding downward, our money is going to be desperately needed in the developing world…