Global oil risks in the early 21st century
The Deepwater Horizon incident demonstrated that most of the oil left is deep offshore or in other difficult to reach locations. Moreover, obtaining the oil remaining in currently producing reservoirs requires additional equipment and technology that comes at a higher price in both capital and energy. In this regard, the physical limitations on producing ever-increasing quantities of oil are highlighted as well as the possibility of the peak of production occurring this decade. The economics of oil supply and demand are also briefly discussed showing why the available supply is basically fixed in the short to medium term. Also, an alarm bell for economic recessions is shown to be when energy takes a disproportionate amount of total consumer expenditures. In this context, risk mitigation practices in government and business are called for. As for the former, early education of the citizenry of the risk of economic contraction is a prudent policy to minimize potential future social discord. As for the latter, all business operations should be examined with the aim of building in resilience and preparing for a scenario in which capital and energy are much more expensive than in the business-as-usual one.
|Date of creation:||01 Feb 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carmen M. Reinhart & Vincent Reinhart, 2010.
"After the fall,"
Proceedings - Economic Policy Symposium - Jackson Hole,
Federal Reserve Bank of Kansas City, pages 17-60.
- Carmen M. Reinhart & Vincent R. Reinhart, 2010. "After the Fall," NBER Working Papers 16334, National Bureau of Economic Research, Inc.
- Reinhart, Carmen & Reinhart, Vincent, 2010. "Diminished Expectations, Double Dips, and External Shocks: The Decade After the Fall," MPRA Paper 24969, University Library of Munich, Germany.
- Mark J. Koetse & Henri L.F. de Groot & Raymond J.G.M. Florax, 2006.
"Capital-Energy Substitution and Shifts in Factor Demand: A Meta-Analysis,"
Tinbergen Institute Discussion Papers
06-061/3, Tinbergen Institute.
- Koetse, Mark J. & de Groot, Henri L.F. & Florax, Raymond J.G.M., 2008. "Capital-energy substitution and shifts in factor demand: A meta-analysis," Energy Economics, Elsevier, vol. 30(5), pages 2236-2251, September.
- Caprio, Gerard & Honohan, Patrick, 2001. "Finance for Growth: Policy Choices in a Volatile World," MPRA Paper 9929, University Library of Munich, Germany.
- Kilian, Lutz, 2006.
"Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market,"
CEPR Discussion Papers
5994, C.E.P.R. Discussion Papers.
- Lutz Kilian, 2009. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," American Economic Review, American Economic Association, vol. 99(3), pages 1053-69, June.
- Höök, Mikael & Hirsch, Robert & Aleklett, Kjell, 2009. "Giant oil field decline rates and their influence on world oil production," Energy Policy, Elsevier, vol. 37(6), pages 2262-2272, June.
- Adelman, M A, 1990. "Mineral Depletion, with Special Reference to Petroleum," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 1-10, February.
- Aleklett, Kjell & Höök, Mikael & Jakobsson, Kristofer & Lardelli, Michael & Snowden, Simon & Söderbergh, Bengt, 2010. "The Peak of the Oil Age - Analyzing the world oil production Reference Scenario in World Energy Outlook 2008," Energy Policy, Elsevier, vol. 38(3), pages 1398-1414, March.
- Höök, Mikael & Aleklett, Kjell, 2008. "A decline rate study of Norwegian oil production," Energy Policy, Elsevier, vol. 36(11), pages 4262-4271, November.
- Reinhart, Carmen, 2009.
"The Second Great Contraction,"
21485, University Library of Munich, Germany.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, number 8973, 01-2013.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
- Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
- Warr, B.S. & Ayres, R.U., 2010. "Evidence of causality between the quantity and quality of energy consumption and economic growth," Energy, Elsevier, vol. 35(4), pages 1688-1693.
- Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Preface," MPRA Paper 17451, University Library of Munich, Germany.
- Reynolds, Douglas B. & Baek, Jungho, 2012. "Much ado about Hotelling: Beware the ides of Hubbert," Energy Economics, Elsevier, vol. 34(1), pages 162-170.
- Bentley, R.W. & Mannan, S.A. & Wheeler, S.J., 2007. "Assessing the date of the global oil peak: The need to use 2P reserves," Energy Policy, Elsevier, vol. 35(12), pages 6364-6382, December.
- Lynch, Michael C., 2002. "Forecasting oil supply: theory and practice," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 373-389.
- Cameron, Ken & Schnusenberg, Oliver, 2009. "Oil prices, SUVs, and Iraq: An investigation of automobile manufacturer oil price sensitivity," Energy Economics, Elsevier, vol. 31(3), pages 375-381, May.
- N/A, 2010. "The UK economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 214(1), pages F3-F3, October.
- Charles A. S. Hall & Stephen Balogh & David J.R. Murphy, 2009. "What is the Minimum EROI that a Sustainable Society Must Have?," Energies, MDPI, Open Access Journal, vol. 2(1), pages 25, January.
- James D. Hamilton, 2009.
"Causes and Consequences of the Oil Shock of 2007-08,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 40(1 (Spring), pages 215-283.
- James D. Hamilton, 2010. "Causes and consequences of the oil shock of 2007–08," FRB Atlanta CQER Working Paper 2009-02, Federal Reserve Bank of Atlanta.
- James D. Hamilton, 2009. "Causes and Consequences of the Oil Shock of 2007-08," NBER Working Papers 15002, National Bureau of Economic Research, Inc.
- Lutz Kilian, 2008.
"Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?,"
The Review of Economics and Statistics,
MIT Press, vol. 90(2), pages 216-240, May.
- Kilian, Lutz, 2005. "Exogenous Oil Supply Shocks: How Big Are They and How Much do they Matter for the US Economy?," CEPR Discussion Papers 5131, C.E.P.R. Discussion Papers.
- Sorrell, Steve & Speirs, Jamie & Bentley, Roger & Brandt, Adam & Miller, Richard, 2010. "Global oil depletion: A review of the evidence," Energy Policy, Elsevier, vol. 38(9), pages 5290-5295, September.
- Friedrichs, Jörg, 2010. "Global energy crunch: How different parts of the world would react to a peak oil scenario," Energy Policy, Elsevier, vol. 38(8), pages 4562-4569, August.
- Wei, Yu & Wang, Yudong & Huang, Dengshi, 2010. "Forecasting crude oil market volatility: Further evidence using GARCH-class models," Energy Economics, Elsevier, vol. 32(6), pages 1477-1484, November.
- Watkins, G.C., 2006. "Oil scarcity: What have the past three decades revealed?," Energy Policy, Elsevier, vol. 34(5), pages 508-514, March.
- James D. Hamilton, 2009.
"Understanding Crude Oil Prices,"
The Energy Journal,
International Association for Energy Economics, vol. 0(Number 2), pages 179-206.
- Hirsch, Robert L., 2008. "Mitigation of maximum world oil production: Shortage scenarios," Energy Policy, Elsevier, vol. 36(2), pages 881-889, February.
- Miller, Richard G., 2011. "Future oil supply: The changing stance of the International Energy Agency," Energy Policy, Elsevier, vol. 39(3), pages 1569-1574, March.
- Dargay, Joyce M. & Gately, Dermot, 2010. "World oil demand's shift toward faster growing and less price-responsive products and regions," Energy Policy, Elsevier, vol. 38(10), pages 6261-6277, October.
- Owen, Nick A. & Inderwildi, Oliver R. & King, David A., 2010. "The status of conventional world oil reserves--Hype or cause for concern?," Energy Policy, Elsevier, vol. 38(8), pages 4743-4749, August.
- Gately, Mark, 2007. "The EROI of U.S. offshore energy extraction: A net energy analysis of the Gulf of Mexico," Ecological Economics, Elsevier, vol. 63(2-3), pages 355-364, August.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:33825. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.