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As the price of crude reached a new
record price of $75.30 a barrel yesterday,
a new report from the American Energy
Production Group issued dire warnings
today that no end to today’s oil crisis is in
sight, and again called on to the White
House to act.
The report tackles the by now well-
known reason to the crisis — that a rap-
idly growing global demand is quickly
outstripping an equally rapidly diminish-
ing world oil supply — by racking up
some remarkable numbers. Last year’s
global worldwide consumption rate was
a startling 6 percent on a year-by-year
basis, global car sales last year were up 4
percent, and global investment in alterna-
tive energy sources was down for the
fourth year in a row, from $370 billion
last year to $352 billion this year.
The report puts most of the blame on
the drying up of oil wells in the Middle
East, but Americans are certainly partly
responsible, too — their love affair with
SUVs continues unabated — but devel-
oping countries have found that they, too,
have a taste for the black stuff. China, in
particular, is relying on oil to fuel its
expanding economy.
Everybody, it seems, needs oil.
And as demand is growing, supplies
are dwindling. Energy companies have
cut their production quotas dramatically.
The reasons are varied. Some cite
dwindling reserves, while others point to
the increasing cost of extracting remain-
ing oil reserves. The bottom line, though,
is the same: Companies are telling us that
we are all running out of oil.
Where are we headed? Nowhere we
want to be, if history is any indication.
The 1970s Arab embargo was devastat-
ing. Libya raised the price of oil
overnight from $4.90 a barrel to $8.25 a
barrel. Several Middle Eastern countries
voted to stop supplying oil to the United
States altogether, effectively turning off
the spigot. OPEC nations put up a united
front, leaving the global community on
tenterhooks. The resulting price hikes
and long lines at the pumps were the tip
of the iceberg. The embargo led to the
one-two punch of rampant inflation and
global recession. It took years for the
American economy to recover.
And the 1970s crisis was artificial.
OPEC chose to stop producing oil for
political reasons. They had the goods;
they just didn’t want to sell to us. Once
the political storm had passed, the oil
started to flow again.
Today’s crisis won’t be solved by
appeasement policies. There’s no angry
sheik in this scenario, sitting on an oil
well, refusing to sell his wares. The prob-
lem is more fundamental. The oilmen
can’t sell us what they don’t have.
See Experts page 3
Experts: No End in
Sight for Oil Crisis
AOW_MBManInt 02.02.05 11:19 AM Page 1
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