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 TheStreet Staff Mar 8, 2011 2:27PM

Image: Gas pump (© Comstock)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.


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Mar 8, 2011 3:03PM
The writer of the article is totally correct. Anybody that thinks we are any where near ready to go green is foolish and has no common sense. Also, the emerging markets will burn all of the fossil fuels they can get their hands on. They could care less about being 'Green". Forcing the U.S. to lead the way in that hypocritical movement will do nothing but decrease our standard of living and will do nothing to help the atmosphere. Get real people. Like it or not we are dependent on fossil fuels for the foreseeable future and we better start developing our own before we go broke. By then none of the 'Green' movement will matter at all. Unless you want to start living in a place much less comfortable, you better contact your government reps and tell them to open up the US to all of the oil exploration we can muster
Mar 8, 2011 3:43PM

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...

Mar 8, 2011 3:04PM
Mar 8, 2011 3:59PM
You can bet there are some out there making huge amounts of money via the misfortune of others via this oil business started by the mideast conflicts. Don;t you sometimes get the feeling that it was planned?? maybe I;m just paranoid.
Mar 9, 2011 10:45AM

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!

Mar 9, 2011 2:43PM
Mar 9, 2011 12:48PM



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.

Mar 8, 2011 3:48PM



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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