Why your World Is About to Get A Whole Lot SmallerBook - 2009
They all depend on cheap oil. And in a world of dwindling oil supplies and steadily mounting demand around the world, there is no such thing as cheap oil. Oil might be less expensive in the middle of a recession, but it will never be cheap again.
Take away cheap oil, and the global economy is getting the shock of its life.
From the ageing oilfields of Saudi Arabia and the United States to the Canadian tar sands, from the shopping malls of Dubai to the shuttered auto plants of North America and Europe, from the made-in-China products on the shelves of the Wal-Mart down the road to the collapse of Wall Street giants, everything is connected to the price of oil
Interest rates, carbon trading, inflation, farmers' markets and the wave of trade protectionism washing up all over the world in the wake of various economic stimulus and bailout packages -- they all hinge on the new realities of a world where demand for oil eventually outstrips supply.
According to maverick economist Jeff Rubin, there will be no energy bailout. The global economy has suffered oil crises in the past, but this time around the rules have changed. And that means the future is not going to be a continuation of the past. For generations we have built wealth by burning more and more oil. Our cars, our homes, our whole world has been getting bigger in the cheap-oil era. Now it is about to get smaller.
There will be winners as well as losers as the age of globalization comes to an end. The auto industry will never recover from this oil-induced recession, but other manufacturers will be opening up mothballed factories. Distance will soon cost money, and so will burning carbon -- both will bring long-lost jobs back home. We may not see the kind of economic growth that globalization has brought, but local economies will be revitalized, as will our cities and neighborhoods.
Whether we like it or not, our world is about to get a whole lot smaller.
From the critics
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"If we can no longer grow oil supply, we will no longer be able to grow the economy - unless, of course, we can change the basic equation that ties the size of our economy to how much oil we burn." Page 207.
"There is only one way to avoid a future of much slower economic growth in a world of depleting oil supply. And that's to lessen the economy's dependence on oil." Page 206
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To some readers, Jeff Rubin may sound like an Alarmist concerning the world's rising energy costs, especially the price of oil. In this book, he makes the case that "oil prices, not delinquent subprime mortgages, are what brought down the global economy," Page 185. In fact, one can notice a spike in Brent barrel petroleum spot prices in the summer of 2008 several months before Lehman Brothers filed for bankruptcy on September 15 of that year. Independent sources such as Wikipedia confirm this point: goo.gl/U8Qab
The author explains in the book that the rising energy costs are not the end of the world and it brings many silver linings with it. For example, less congested streets, fresh air, more local growth to name but a few examples. His future vision of the world may sound utopic but it brings a certain thought of relief and hope that we move faster towards this objective. I am looking forward to reading his most recent work: The End of Growth
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