High oil prices could kill 600,000 jobs
Analysis: Limits on conventional energy development and excessive optimism about alternative energy technologies are making the US more dependent on imported oil.
By Peter Morici, guest contributor to TheStreet
Turmoil in the Middle East and elsewhere has pushed oil prices up more than $20 a barrel and average gasoline prices from less than $3 a gallon to about $3.60.
All the additional cash spent on imported oil that does not return to buy exports translates into lost demand for U.S. goods and services, lost growth and fewer jobs. Higher gas prices simply mean fewer cell phones, restaurant meals and other goods purchased that create jobs.
Most economists built some increase into 2011 GDP forecasts, but the recent surge, if it sticks through spring, will reduce U.S. growth from 3.5 to 4% to 3 to 3.5%, perhaps less. Overall, that translates into at least 600,000 fewer jobs, or nearly 50,000 a month. Moreover, lost taxes exacerbate federal and state budget problems.
U.S. policy arbitrarily limits the development of domestic oil and gas, and the more rapid deployment of abundant domestic natural gas. Premised on false assumptions about the immediate viability of electric cars and alternative energy sources, such as solar panels and windmills, these make the U.S. economy more vulnerable and Americans poorer. The also raise unemployment and do little to raise environmental standards. Instead of drilling taking place where the U.S. government can regulate it, development goes abroad to places where U.S. enforcement has no teeth.
In combination, limits on conventional energy development and excessive optimism about alternative energy technologies are making the United States even more dependent on imported oil and more indebted to China and other overseas creditors to pay for it.
Peter Morici is a professor at the University of Maryland's Robert H. Smith School of Business.
This commentary is part of TheStreet's guest contributor program, which is separate from the company's news coverage.
yep, FrEddddd -
written by a high school dropout.
"Outlaw heating homes and buildings with oil"
And the retrofit cost to provide an alternative energy heating source for those structures would be?
And who's gonna pay for that?
At least your post didn't have any spelling errors...
Until we are able to move more toward green energy we need to be using the US oil resources to stop being controlled by the middle east. You cannot just flip a switch and be off fossil fuels...it will take years. In the meantime drill in this country!
I also agree with you on the lack of readiness of being "Green". I wanted to mention that when US was a developing country it could care less about being "Green" either, so there is really no reason to blame or use disdainful language toward the developing countries, they are simply following a natural cycle - a path of least resistance. Even so, China is investing a ton into solar and other alternative energies.
Cars: Hydro Fuel. We perfected the tech in the 70's, just force every major oilco to have at least 5% hydro-fuel stations, and you'll have hydro cars on the road within 3 years [Ford, Nissan, Honda, and Toyota all have proof of concept models...from a decade ago]
Housing/Buildings: Mandate all new construction include solar panels. Keep a backup grid connection, but this will stop the growth of dependence on other forms of power.
Problem solved. We either wait for the free markets, and the comming of peak oil [which is already happening], or we take drastic action in advance.
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The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
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