World without oil: have we forgotten the ’70s?

THE optimistic forecasts for the economy published recently by the ESRI assume a business-as-usual scenario globally.

However, this appears to take no account of several gloomy developments which have occurred in the past year or so.

In particular the skyrocketing price of oil, if it continues, must surely impact hugely on any economic forecasts over the next 10 years.

Several sources have forecast that oil could reach $200 a barrel fairly soon. Indeed there are indications that peak oil may already have passed.

Russia, the world’s largest oil producer, has signalled that it has passed peak production and unrest in other oil-producing countries has caused the uncertainty over supply which has sparked the huge price increases of recent weeks. Concern over diminishing oil supplies has in turn driven another major global variable, the price of cereals and food generally. Food price inflation has been marked as a result.

The temporary interruption of oil supplies twice in the 1970s should send shivers down the spines of those who remember them.

These events and the price hikes which followed them sent reverberations through western economies which lasted for years afterwards.

What we must soon face, however, is not a temporary interruption in supplies but an irreversible decline.

Whether this turns out to be gradual or severe remains to be seen. We do not seem to be preparing adequately, to put it mildly.

David Walsh

Rockfield

Maynooth

Co Kildare