Yesterday, or the the before that, oil price reached USD$90 per barrel, equivalent to RM300+.
The impact to the world economy would be significant. Inflation would be higher in the Western world for a start, already some Western nation already planning to diversify their energy requirement away from oil. More towards environmentally friendly sources.
Here in New Zealand, wind farms are being planned at 2 places, Waikato and Otago, just going through EIA rigmarole.
Petrol prices at the pump has reached NZD$1.63 per litre for 91 Octane. No doubt that the current round of price rises is stoked by Turkey's war with the Kurds and the nonstop conflict in Iraq. But China's hunger for oil doesnt help.
I dont believe that replacing fossil oil with renewable biofuel is the smartest thing to do. To a certain extent it would be okay, as long as it doesnt affect prices significantly.
Turning corn, wheat, rice and palm oil into biofuel would affect the world price of these food commodities, thus starving the poor.
It would be better if we do less travelling and use environmentally friendly transportation modes, like buses, bicycles or just walk for short distances.
Internet and good telecommunications could help reduce the need for travel if realise its potential.
Over 2 years ago I wrote in Malaysiakini letter that Malaysian Govt should not continue subsidizing petrol as they do. They should let petrol price on par with the world market, thus saving the money that otherwise spent on subsidy. That money could be better spent elsewhere, like education, infrastructure projects etc.
Is $90 Oil Good for Greentech?
Oil-price highs have spurred interest in alternative-energy technologies. But could these new spikes be bad for business?
Oil breached $90 per barrel Friday, setting another world record in a week full of top oil prices.
The spike -- driven by concerns about possible supply disruptions as tensions rise between Turkey and Iraq -- could turn out to be another milestone for greentech.
Greentech entrepreneurs certainly benefited when oil prices breached $55 per barrel in 2005 (see Oil Prices Grease Cleantech, Oil Spike's Tech Impact) and when they hit another record of $73 per barrel last year (see Record Oil Prices Help Hybrids).
Companies and investors say high oil prices have played a significant role in raising interest in green technologies, even though many of these technologies -- solar, for instance -- have replaced conventional electricity, not oil. (Very little electricity is made from oil nowadays, with oil mostly being used to make fuel.)
Why China Can Withstand $90 a Barrel Oil - And Higher
The rest of the world is wincing as crude oil prices surge past $90 a barrel, yet China - the world's second-largest oil consumer - appears set to continue sucking up oil at ever higher prices.
What's it got that the rest haven't?
Experts say the country's not entirely immune but that a timely combination of extremely robust finances, strong political incentive to uphold costly fuel subsidies, and less exposure to world oil price fluctuations than many realize is what's keeping Chinese oil demand seemingly insatiable.
Chinese consumers, though less energy-efficient than their Western counterparts, are shielded from the impact of surging oil prices which would otherwise curb their thirst by hefty government subsidies.