2000s Energy Crisis

Oh, this again. You want me to rehash the whole sordid affair of the oil price surge? Fine. Don't expect me to enjoy it. It's like dissecting a particularly tedious corpse – all the parts are there, just… morbidly fascinating in their dysfunction.

Sixfold Rise in Oil Prices, Peaking in 2008

This article delves into the complex tapestry of factors that led to the dramatic escalation of oil prices during the 2000s, culminating in the peak of 2008. For a more granular look at the price fluctuations themselves, consult World oil market chronology from 2003. This period was a significant component of the broader economic upheaval, often referred to as the Energy crisis.

2000s Oil Crisis

Often dubbed the "Third oil crisis," this period saw crude oil prices embark on a relentless ascent from January 2003 to November 2008. It's crucial to note these figures are not adjusted for inflation, which, frankly, would only make the situation seem even more dire. This entire episode is intrinsically linked to the larger narrative of the Great Recession.

Major Aspects of the Great Recession

The Great Recession was a multifaceted global economic downturn, and the oil price surge was a significant, though not singular, contributor. Key elements included:

Subprime mortgage crisis: The collapse of the U.S. housing market, triggered by risky lending practices, sent shockwaves through the global financial system.
2000s energy crisis: The very subject we're discussing, the escalating cost of energy, particularly oil, strained economies worldwide.
2000s United States housing bubble: An unsustainable rise in housing prices in the U.S. created an economic imbalance.
2000s United States housing market correction: The inevitable aftermath of the bubble, leading to widespread foreclosures and economic distress.
2008 financial crisis: A systemic breakdown of financial institutions and markets, exacerbated by the housing crisis and other factors.
2008–2010 automotive industry crisis: The economic downturn severely impacted the global auto industry, leading to bankruptcies and restructuring.
Dodd–Frank Wall Street Reform and Consumer Protection Act: Legislation enacted in the U.S. to reform the financial system in response to the crisis.
Euro area crisis: A sovereign debt crisis that emerged in the Eurozone following the global financial crisis.

Causes of the Great Recession

Understanding the oil price surge requires a glance at the underlying causes of the broader recession, including:

Summit Meetings

The gravity of the situation prompted numerous international gatherings:

34th G8 summit (July 2008)
G-20 Washington summit (November 2008)
APEC Peru (November 2008)
China–Japan–South Korea trilateral summit (December 2008)
G-20 London Summit (April 2009)

Government Response and Policy Proposals

Governments worldwide scrambled to respond, implementing various measures:

Business Failures

The economic maelstrom led to the collapse or near-collapse of numerous significant entities:

Regions Affected

The crisis was a global phenomenon, impacting economies across continents:

Timeline

A detailed account of the unfolding events can be found in the Timeline of the Great Recession.

Crude Oil Prices: A Trajectory of Escalation

From the mid-1980s until September 2003, the inflation-adjusted price of a barrel of crude oil on the New York Mercantile Exchange (NYMEX) generally hovered below US $25 in 2008 dollars. This era of relative stability was shattered in 2003 when prices began their ascent, breaching the$ 30 mark. By August 11, 2005, they had reached $60, and then, in a truly spectacular, almost theatrical, display of economic volatility, they peaked at a staggering$ 147.30 in July 2008.

Commentators, predictably, offered a smorgasbord of explanations for this meteoric rise. Among the usual suspects were:

Geopolitical Tensions: The ever-present instability in the Middle East naturally played a role, a constant hum of unease in the global energy market.
Soaring Demand from China: The insatiable appetite of a rapidly industrializing China, a new titan on the world stage, was a significant driver. Their demand was like a black hole, pulling in resources.
Declining U.S. Dollar: As the value of the American dollar weakened, it took more dollars to buy the same barrel of oil, contributing to the nominal price increase. A falling currency is rarely good news for commodity prices.
Reports of Declining Petroleum Reserves: Whispers of dwindling accessible oil reserves, whether entirely accurate or not, stoked fears of scarcity. It’s amazing how much power perception holds.
Peak Oil Concerns: The persistent, and for some, terrifying, notion of peak oil – the point at which global oil production reaches its maximum rate and begins to decline – loomed large. The idea that the well might eventually run dry.
Financial Speculation: The murky world of financial markets, where futures and derivatives dance, was also implicated, with accusations that speculation was artificially inflating prices. Money chasing money, as it often does.

For a period, dramatic events and natural disasters exerted a palpable, albeit short-lived, influence on oil prices. Think of North Korean missile tests, the 2006 conflict between Israel and Lebanon, anxieties surrounding Iran's nuclear program in 2006, and the destructive force of Hurricane Katrina. These were the sharp, sudden jolts.

However, by 2008, these geopolitical tremors and meteorological tantrums seemed to lose their punch, overshadowed by the looming specter of the global recession. The economic downturn, like a suffocating blanket, choked off demand for energy. Oil prices, which had been soaring, then performed an equally dramatic U-turn, collapsing from their July high of $147 to a December low of$ 32. A six-month freefall of nearly 80%. It begs the question, could simple supply and demand really account for such a drastic swing? The market, it seems, has a flair for the dramatic.

By August 2009, prices began to stabilize, finding a semblance of equilibrium. For the next few years, they settled into a range between $70 and$ 120, a period of relative calm before the next storm. This continued until early 2016, when prices dipped back to pre-crisis levels. This shift was, in part, due to a dramatic surge in U.S. production, a testament to the ever-shifting sands of the global energy landscape. By 2018, the United States had ascended to become the world's largest oil producer. A remarkable turnaround, wouldn't you agree?

New Inflation-Adjusted Peaks

Let's look at the numbers again, because they're rather illustrative. In 2003, crude oil prices danced between $20 and$ 30 a barrel. Then came the climb. By late 2007, they had crossed the $100 threshold, flirting with the previous inflation-adjusted peak set in 1980. But 2008 was the year of the grand finale. A steep, almost absurd, rise, mirroring a broader [2000s commodities boom](/2000s_commodities_boom), culminated in an all-time high of$ 147.27 on July 11, 2008. That's more than a third higher than the prior inflation-adjusted record. It was a peak that seemed to defy gravity.

These stratospheric oil prices, coupled with a general economic malaise, began to exert a noticeable drag on demand in 2007–2008. In the United States, gasoline consumption experienced a slight dip of 0.4% in 2007, followed by a more significant 0.5% drop in just the first two months of 2008. The combined effect of record-high oil prices in the first half of the year and economic weakness in the latter half led to a substantial contraction in U.S. petroleum product consumption – a decline of 1.2 million barrels per day. This represented a 5.8% drop, the most severe annual decrease since the 1979 energy crisis. It was a stark reminder of how sensitive economies are to the price of black gold.

Possible Causes

The reasons behind this unprecedented price surge are as complex and intertwined as the global economy itself. It wasn't a single villain, but a confluence of forces.

Demand

The engine of this price rise, in large part, was a relentless increase in global demand. From 1994 to 2006, world crude oil demand grew at an average of 1.76% annually, spiking to a formidable 3.4% in 2003–2004. The U.S. Energy Information Administration (EIA) projected in 2007 that global demand would surge by 37% by 2030, reaching an ultimate high of 118 million barrels per day from 2006's 86 million, with the transportation sector leading the charge.

A 2008 report from the International Energy Agency (IEA) acknowledged that while developed nations might curb their petroleum consumption due to high prices, developing countries were expected to see a 3.7 percent rise in demand by 2013, ensuring a net increase in global demand overall.

The transportation sector, a voracious consumer of energy, has been the primary driver of this growth, fueled by the proliferation of cars and personal vehicles powered by internal combustion engines. This sector accounts for roughly 55% of global oil use, according to the Hirsch report, and a staggering 68.9% of U.S. oil consumption in 2006. The projected increase in oil consumption by India and China between 2001 and 2025 was expected to be driven by cars and trucks, accounting for nearly 75% of that rise. China's auto sales, for instance, were anticipated to grow by 15–20 percent annually, fueled by over a decade of more than 10 percent economic growth.

While demand growth was most pronounced in the developing world, the United States remained the globe's largest consumer. Between 1995 and 2005, U.S. consumption climbed by 3 million barrels per day, from 17.7 to 20.7 million. China, in the same period, saw an even more dramatic increase, more than doubling its consumption from 3.4 to 7 million barrels per day, an increase of 3.6 million barrels. Per capita, however, the U.S. consumption remained vastly higher: 24.85 barrels annually compared to 1.79 in China and 0.79 in India.

As nations develop, industrialization, rapid urbanization, and rising living standards inevitably lead to increased energy consumption, with oil often being the fuel of choice. Thriving economies like China and India were rapidly becoming major oil consumers, with China's oil consumption doubling between 1996 and 2006, growing at an 8% annual rate since 2002.

While rapid growth in China was often predicted, some analysts foresaw potential headwinds, such as wage and price inflation and reduced demand from the U.S., potentially tempering that growth. India's oil imports, meanwhile, were projected to more than triple from 2005 levels by 2020, reaching 5 million barrels per day.

And then there's the relentless march of population growth. The sheer increase in the world population outpaced oil production, leading to per capita production peaking in 1979. With the global population expected to double from 1980 levels by 2030, the pressure on finite resources like oil only intensifies.

Role of Fuel Subsidies

State-sponsored fuel subsidies played a curious role, acting as a buffer for consumers against rising market prices. However, as governmental costs mounted, many of these subsidies began to erode or disappear entirely.

In June 2008, reports indicated that China had joined a growing list of Asian nations curbing energy subsidies, hiking retail petrol and diesel prices by up to 18%. This followed similar moves in Malaysia (41% hike), Indonesia (around 29%), Taiwan, and India.

A Reuters report from the same month highlighted the significant contribution of subsidized economies to global consumption growth. Countries like China and India, along with Gulf nations, accounted for 61% of the increase in global crude oil consumption between 2000 and 2006, according to JPMorgan. The report pointed out that where fuel prices were kept artificially low, the impact of high global oil prices on reducing demand was muted, forcing governments with weaker finances to be the first to capitulate and dismantle their subsidy programs.

The Economist estimated that "Half of the world's population enjoys fuel subsidies," implying that nearly a quarter of the world's petrol was sold below market price. U.S. Secretary of Energy Samuel Bodman stated that approximately 30 million barrels per day, over a third of global consumption, was subsidized. This created a distorted market, where demand remained artificially high, irrespective of global price signals.

Supply

The tightening grip on supply was another critical factor. Since oil production surpassed new discoveries in 1980, the growth in supply had been steadily decelerating. The looming prospect of peak oil – the point at which global production capacity begins its irreversible decline – was a fundamental driver of rising prices, a long-term fundamental cause of rising prices. While the exact timing of this peak remained a subject of debate, the majority of industry insiders acknowledged its eventual inevitability. Some, however, argued that growing awareness of global warming and the development of new energy sources would curb demand before supply constraints became critical, rendering reserve depletion a non-issue.

A significant contributor to this supply slowdown was the declining Energy Returned on Energy Invested ratio for petroleum. As a limited resource, the most accessible and cost-effective reserves are depleted first. Remaining reserves are increasingly difficult and expensive to extract. Eventually, only the most costly extraction methods will be economically viable. Even if total supply doesn't decline, experts increasingly believed that easily accessible light sweet crude reserves were nearing exhaustion, forcing the world to rely on more expensive unconventional oil and heavy crude oil, alongside renewable alternatives. Figures like energy economist Matthew Simmons posited that prices could continue to rise indefinitely until a new market equilibrium was found.

Timothy Kailing, in a 2008 article for the Journal of Energy Security, highlighted the challenges of increasing production in mature regions, even with substantial investments in exploration. His analysis of historical drilling efforts suggested diminishing returns, where increased drilling yielded progressively less oil. This implied that even a massive increase in drilling activity was unlikely to significantly boost production in established areas like the United States.

The Canadian oil sands serve as a prime example of investment in non-conventional sources. These reserves, while vast, are significantly less cost-efficient than conventional crude. However, when oil prices surpassed $60/bbl, they became an attractive prospect for exploration and production companies. Despite estimates suggesting Canada's oil sands hold as much "heavy" oil as all the world's "conventional" reserves, the economic viability of exploiting them lagged behind the surging demand.

Until 2008, CERA, a prominent energy consulting firm, had maintained a more optimistic outlook, not foreseeing such immediate supply issues. However, in May 2008, Daniel Yergin, a figure previously known for predicting oil price drops, revised CERA's stance, forecasting prices to hit $150 in 2008 due to supply tightness. This shift in perspective was significant, as CERA's projections often influenced long-term energy planning by various official bodies.

In contrast, organizations like the International Energy Agency (IEA) had long held a more cautious view. In 2008, the IEA drastically revised its prediction of production decline from existing oilfields, increasing the annual rate from 3.7% to 6.7%, based on improved accounting methods and direct research into individual oil field performance globally.

Furthermore, terrorist and insurgent groups increasingly targeted oil and gas infrastructure, disrupting substantial export volumes, particularly during the height of the American occupation of Iraq from 2003 to 2008. Such attacks were often carried out by militias in regions where oil wealth had failed to translate into tangible benefits for the local population, as seen in the Niger Delta.

A confluence of factors – the post-9/11 war on terror, labor strikes, hurricane threats to offshore platforms, refinery fires, and terrorist threats – contributed to concerns about reduced oil supply. While these events could cause temporary price spikes, they were not typically considered the fundamental drivers of long-term price increases.

Investment/Speculation Demand

The role of financial speculation in driving up oil prices became a contentious issue. This refers to investors purchasing futures contracts – agreements to buy a commodity at a set price for future delivery. As one observer noted, "Speculators are not buying any actual crude. ... When [the] contracts mature, they either settle them with a cash payment or sell them on to genuine consumers."

Claims abounded that financial speculation was a primary culprit. In May 2008, a German transport official estimated that 25% of the price rise to $135 a barrel had no basis in underlying supply and demand. Testimony before a U.S. Senate committee suggested that "demand shock" from "institutional investors" had increased by 848 million barrels over the preceding five years, nearly matching the physical demand increase from China.

The influence of institutional investors, including sovereign wealth funds, was also highlighted by Lehman Brothers in June 2008, which suggested a correlation between increased investor exposure to commodities and rising prices. They claimed that "for every $100 million in new inflows, the price of West Texas Intermediate... increased by 1.6%."

An article in The Economist in May 2008 observed that oil futures transactions on the New York Mercantile Exchange (NYMEX) closely mirrored oil price increases for several years. However, the publication also cautioned that increased investment might be a consequence, rather than a cause, of rising prices, citing the example of the nickel market, whose value halved despite speculative interest. It also pointed out that speculators don't actually hoard crude, and that prices of non-futures-traded commodities had also risen significantly.

In June 2008, OPEC's Secretary General Abdallah Salem el-Badri noted the vast disparity between actual oil consumption (87 million bpd) and the "paper market" for oil, which he estimated at 1.36 billion bpd – over 15 times the physical demand.

A U.S. interagency task force investigated these claims, concluding in July 2008 that "market fundamentals" – supply and demand – were the primary drivers of oil prices, and that increased speculation was not statistically correlated. They noted that rising prices with elastic supply would typically lead to increased inventories, but inventories were actually declining, suggesting market pressures were at play. The report also pointed to similar price increases in commodities not subject to speculative trading, like coal and onions.

In September 2008, Masters Capital Management released a study suggesting speculation had significantly impacted prices, claiming over $60 billion in speculative investment in the first half of 2008 drove prices from$ 95 to $147, and that a subsequent$ 39 billion withdrawal by speculators contributed to the price drop.

Effects

The long-term ramifications of the 2000s energy crisis remain a subject of debate. Some speculated that the oil price spike could trigger a recession comparable to, or even worse than, those following the 1973 and 1979 energy crises. The increased cost of oil inevitably rippled through to a vast array of petroleum-derived products and transportation costs, affecting nearly every facet of the economy.

Political scientist George Friedman theorized that persistent high prices for oil and food could define a new geopolitical era, distinct from the Cold War, the era of economic globalization, and the post-9/11 "war on terror".

Beyond the price surge itself, the increased volatility in oil prices from 2000 onwards was also suggested as a contributing factor to the 2008 financial crisis.

The perceived increase in oil prices varied internationally due to currency fluctuations. For instance, between January 2002 and January 2008:

In U.S. dollars, oil prices rose nearly 4.91 times.
In Taiwanese dollars, which gained value against the USD, oil became 4.53 times as expensive.
In Japanese Yen, also appreciating against the USD, oil prices rose 4.10 times.
In the Eurozone, with the Euro gaining value, oil became 2.94 times as expensive.

On average, oil prices roughly quadrupled for these regions, a trend that ignited widespread protests. The parallel surge in petroleum-based fertilizers also exacerbated the 2007–08 world food price crisis, further fueling unrest.

A 2008 report by Cambridge Energy Research Associates suggested that 2007 marked the peak of gasoline consumption in the United States, and that record energy prices would lead to an "enduring shift" in energy consumption habits. Gasoline consumption had been lower year-on-year for six consecutive months by April 2008, indicating that 2008 would likely see the first annual decline in U.S. gasoline usage in 17 years. Miles driven in the U.S. had already begun declining in 2006.

In the United States, oil prices contributed to an average inflation rate of 3.3% in 2005–2006, significantly higher than the preceding decade's average of 2.5%. This inflationary pressure prompted the Federal Reserve to steadily increase interest rates in an attempt to curb inflation.

Less affluent nations, particularly in the developing world, were disproportionately affected by high oil prices due to their lower discretionary income. In these regions, oil was often used for electricity generation as well as private transport. The World Bank documented the impact, noting that in South Africa, a 125% increase in crude oil prices reduced employment and GDP by approximately 2%, and household consumption by about 7%, with the poor bearing the brunt of the impact.

OPEC's annual oil export revenue, however, soared to a record high in 2008, estimated at around US$800 billion. A stark contrast, wouldn't you say?

Forecasted Prices and Trends

By early December 2007, OPEC seemed to be aiming for a high yet stable oil price – enough to generate substantial revenue for producing nations without crippling the economies of consuming countries. Analysts suggested a target range of US$70–80 per barrel.

However, by November 2008, with prices falling below $60, the IEA issued a warning. They cautioned that declining prices could lead to underinvestment in new oil sources and a reduction in the production of more expensive unconventional reserves like Canada's oil sands. The IEA's chief economist pointed out that future production would increasingly rely on smaller, more challenging fields, requiring greater annual investment. A lack of such investment, already evident, could precipitate future supply crises more severe than those experienced in the early 2000s. The IEA also predicted that OPEC states would see their share of global production rise from 44% in 2008 to a projected 51% by 2030, as production declines were most pronounced in developed countries. Demand from developed nations was also thought to have peaked, with future growth expected to come from developing economies like China (43%) and India and the Middle East (each around 20%).

End of the Crisis

By early September 2008, prices had receded to $110. OPEC Secretary General El-Badri attributed this to a "huge oversupply" stemming from declining economies and a stronger U.S. dollar, announcing OPEC's intention to cut output by approximately 500,000 barrels per day. On September 10, the International Energy Agency (IEA) lowered its 2009 demand forecast by 140,000 barrels per day.

As economies worldwide spiraled into recession in the third quarter of 2008 and the global banking system teetered on the brink, oil prices continued their downward slide. In November and December, global demand growth faltered, with U.S. oil demand dropping an estimated 10% from early October to early November, coinciding with a sharp decline in auto sales.

In their December meeting, OPEC members agreed to a production cut of 2.2 million barrels per day, asserting an 85% compliance rate with their October resolution to reduce output.

Petroleum prices dipped below $35 in February 2009 but rebounded to mid-November 2008 levels of around$ 55 by May 2009. The global economic downturn left oil storage facilities with larger inventories than at any point since 1990, when Iraq's invasion of Kuwait disrupted the market.

In early 2011, crude oil prices surged back above US $100/bbl, driven by the [Arab Spring](/Arab_Spring) protests in the Middle East and North Africa, including events in Egypt, Libya, and the tightening of [sanctions against Iran](/Sanctions_against_Iran). Prices then fluctuated around the$ 100 mark through early 2014.

By 2014–2015, the global oil market was again experiencing a significant oversupply, largely due to a near-doubling of U.S. oil production since 2008, spurred by advancements in shale "fracking" technology. By January 2016, the OPEC Reference Basket plummeted to US $22.48/bbl – less than one-sixth of its July 2008 peak ($ 140.73) and below its April 2003 starting point. With Iranian sanctions lifted and markets already oversupplied by at least 2 million barrels per day, OPEC production was poised for further increases.

Possible Mitigations

The impact of soaring oil prices spurred various strategies aimed at mitigating its effects:

Increasing the supply of petroleum.
Developing substitutes for petroleum.
Decreasing the demand for petroleum.
Shielding petroleum consumers from the full impact of rising prices.
Implementing better urban planning with increased emphasis on public transit, cycling infrastructure, and higher residential density.

Mainstream economic theory posits that in a free market, an increasingly scarce commodity will see its price rise, thereby stimulating producers to increase output and consumers to reduce consumption or switch to substitutes. The first three mitigation strategies align with this theory, as government policies can influence supply, demand, and the availability of alternatives. However, the fourth strategy – attempting to cushion consumers from price shocks – runs counter to classical economics, potentially encouraging overconsumption of a scarce resource. To prevent outright shortages, price controls often necessitate some form of rationing.

Alternative Propulsion

The pursuit of alternatives to petroleum gained significant traction:

Alternative Fuels: Economists predicted that the substitution effect would drive demand for alternate fossil fuels like coal and liquefied natural gas, as well as renewable energy sources such as solar power, wind power, and advanced biofuels. China and India, for example, were heavily investing in natural gas and coal liquefaction facilities. Nigeria was working to harness natural gas for electricity generation, aiming to end routine gas flaring. In many applications, particularly stationary energy production, natural gas is a relatively easy substitute for oil. Oil majors also began investing in alternative fuel research, motivated by patent acquisition and the desire to vertically integrate future energy industries.
Electric Propulsion: The surge in oil prices rekindled interest in electric vehicles, with new hybrid and fully electric models entering the market. Countries offered incentives like tax breaks and subsidies to encourage adoption, alongside the development of charging infrastructure.
High-Speed Rail: Drawing inspiration from the original TGV, which transitioned to electric propulsion after the 1973 oil crisis, numerous countries revitalized and expanded their electric high-speed rail networks. The global high-speed rail network nearly doubled since 2003, with plans for further expansion. China, in particular, transformed from having no high-speed rail in 2003 to possessing the world's longest network by 2015.
Bioplastics and Bioasphalt: Petroleum is a key component in plastics, and bioplastics, derived from renewable feedstocks like cornstarch or vegetable oil, offered a potential alternative. These could be used as direct replacements or blends for traditional plastics, particularly in packaging. Japan was a pioneer in bioplastic applications in electronics and automobiles. Bioasphalt also emerged as a petroleum asphalt substitute.

United States Strategic Fuel Reserve

The U.S. Strategic Petroleum Reserve held enough oil to supply domestic demand for approximately one month in an emergency. However, its accessibility could be compromised in severe events, such as major storms impacting the Gulf of Mexico, where it is located. While total oil consumption had increased, Western economies had become less reliant on oil per unit of GDP due to productivity gains and the growth of less energy-intensive sectors like finance and retail. The decline of heavy industry also contributed to this shift, though the import of manufactured goods maintained a degree of oil dependence.

Fuel Taxes

One common, albeit controversial, response in developed nations with high fuel taxes was the temporary or permanent suspension of these taxes during periods of price spikes.

In 2000, France, Italy, and the Netherlands lowered taxes in response to protests, while other European nations resisted, as energy taxes formed a significant part of public finances. This issue resurfaced in 2004 when oil reached $40 a barrel, prompting EU finance ministers to lower economic growth forecasts. Budget deficits led many to pressure OPEC rather than cut taxes. By 2007, European truckers, farmers, and fishermen again voiced concerns about rising oil prices, hoping for tax reductions. In the UK, planned fuel tax increases faced potential protests and roadblocks. In April 2008, a 25 yen per liter fuel tax in Japan was temporarily allowed to lapse.

This approach was less feasible for countries with significantly lower fuel taxes, such as the United States. While local fuel tax reductions can lower prices, global prices are dictated by supply and demand. In fact, increasing fuel taxes, by reducing demand, could theoretically lower prices. However, the relatively inelastic nature of fuel demand (price elasticity between -0.09 and -0.31) meant that price changes had a limited impact on overall consumption.

Demand Management

Transportation demand management offered a promising policy response to fuel shortages and price increases, with greater potential for long-term benefits than other mitigation strategies. Differences in energy consumption for private transport between cities were stark; a U.S. urban dweller used 24 times more energy than a Chinese urban resident. These disparities were linked not just to wealth but to rates of walking, cycling, public transport use, and urban design.

For individuals, remote work presented an alternative to daily commuting and long-distance travel. Advances in technologies like videoconferencing and e-mail facilitated virtual interactions. As the cost of physical travel rose and the cost of electronic information transfer fell, market forces were expected to favor virtual over physical travel. Matthew Simmons advocated for changing corporate mindsets to focus on work output rather than physical presence, enabling more information workers to work remotely. While full adoption of remote work might only reduce energy consumption by about 1%, a 20% increase in automobile fuel economy could yield a 5.4% saving.

Political Action Against Market Speculation

The price surge of mid-2008 prompted various proposals to reform energy and energy futures markets, aiming to curb speculation-driven price increases. On July 26, 2008, the United States House of Representatives passed the Energy Markets Emergency Act of 2008, directing the Commodity Futures Trading Commission to use its authority to immediately curb excessive speculation in energy markets and prevent market distortions.

Notes

"Crude Oil EmiNY Weekly Commodity Futures Price Chart: NYMEX" (Archived).
"Oil price 'may hit $200 a barrel'" (Archived), BBC News.
"US Markets-Oil" (Archived), Reuters.
"Record oil price sets the scene for $200 next year", AME (Archived).
"Peak Oil News Clearinghouse", EnergyBulletin.net (Archived).
"The Hike in Oil Prices: Speculation – But Not Manipulation" (Archived).
"Missile tension sends oil surging", CNN (Archived).
"Oil hits $100 barrel", BBC News.
"Iran nuclear fears fuel oil price", BBC News.
(PDF) fpc.state.gov (Archived).
Gross, Daniel (5 January 2008). "Gas Bubble: Oil is at $100 per barrel. Get used to it", Slate (Archived).
"Oil Prices Fall As Gustav Hits", Sky News (Archived).
Tuttle, Robert; Galal, Ola (10 May 2010). "Oil Ministers See Demand Rising, Price May Exceed $85", Bloomberg News (Archived).
"Leaked Documents Reveal Major Speculators Behind 2008 Oil Price Shock: Hedge Funds, Koch, Big Banks, Oil Companies".
"Europe Brent Crude Oil Spot Price FOB (DOE)", Quandl (Archived).
"The United States is now the largest global crude oil producer - Today in Energy", U.S. Energy Information Administration (EIA).
"Weekly United States Spot Price FOB Weighted by Estimated Import Volume", U.S. Energy Information Administration (Archived).
"What is driving oil prices so high?", BBC (Archived).
Read, Madlen (11 July 2008). "Oil sets new trading record above $147 a barrel", USA Today (Archived).
Marianne Lavelle (4 March 2008). "Oil Demand Is Dropping, but Prices Aren't", U.S. News & World Report (Archived).
Frank Langfitt (5 March 2008). "Americans Using Less Gasoline", NPR (Archived).
"Short-Term Energy Outlook" (PDF), U.S. Energy Information Administration (Archived).
"Global Oil Consumption", U.S. Energy Information Administration (Archived).
"World oil demand 'to rise by 37%'", BBC News (Archived).
"2007 International Energy Outlook: Petroleum and other liquid fuels", U.S. Energy Information Administration (Archived).
Clifford Krauss (2 July 2008). "Oil Demand Will Grow, Despite Prices, Report Says", The New York Times (Archived).
Wood John H, Long Gary R, Morehouse David F (18 August 2004). "Long-Term World Oil Supply Scenarios: The Future Is Neither as Bleak or Rosy as Some Assert", Energy Information Administration (Archived).
"Domestic Demand for Refined Petroleum Products by Sector", U.S. Bureau of Transportation Statistics (Archived).
"Asia's Thirst for Oil", Wall Street Journal (Archived).
Joe Mcdonald (21 April 2008). "Gas guzzlers a hit in China, where car sales are booming", Associated Press.
a b "International Petroleum (Oil) Consumption Data", U.S. Energy Information Administration (Archived).
"BP Statistical Review of Energy – 2008", Beyond Petroleum (Archived).
20.7 Mbpd divided by the population of 304 million times 365 days/year.
6.5 Mbpd divided by the population of 1,325 million people times 365 days/year (figures from the CIA Factbook Archived 13 August 2008 at the Wayback Machine).
2.45 Mbpd divided by the population of 1,136 million people times 365 days/year (figures from the CIA Factbook Archived 13 May 2009 at the Wayback Machine).
Kevin O'Brien (2 July 2008). "China's Negative Economic Outlook", Seeking Alpha.
"China and India: A Rage for Oil", Business Week (Archived).
Richard C. Duncan (November 2001). "The Peak of World Oil Production and the Road to the Olduvai Gorge", Population & Environment.
"Total Midyear Population for the World: 1950–2050", U.S. Census Bureau (Archived).
a b "Chinese cut fuel subsidies but demand fears remain", AFP (Archived).
"The hidden costs of fuel subsidies", Reuters (Archived).
"Crude measures", The Economist (Archived).
"Peak Oil Primer - Resilience", energybulletin.net (Archived).
Peter Davies, Economist for BP (14 June 2007). "World oil supplies are set to run out faster than expected, warn scientists", The Independent (Archived).
Kailing, Timothy D. (December 2008). "Can the United States Drill Its Way to Energy Security?", Journal of Energy Security (Archived).
"Canada: Pinning hopes on the tar sand", EnergyBulletin.net (Archived).
"IHS Energy Acquires Cambridge Energy Research Associates (CERA)" (Archived).
Neil King Jr; Spencer Swartz (7 May 2008). "Some See Oil At $150 a Barrel This Year", Wall Street Journal (Archived).
"Transcript: Interview with IEA chief economist", Financial Times (Archived).
George Monbiot asks Fatih Birol, chief economist of IEA, when will the oil run out? (Archived).
Simmons, Greg (7 December 2005). "Dems Doubt Iraq Progress", Fox News (Archived).
"Oil price 'may hit $200 a barrel'", BBC News (Archived).
a b "Double, double, oil and trouble", The Economist (Archived).
Evans-Pritchard, Ambrose (26 May 2008). "Germany in call for ban on oil speculation", The Daily Telegraph (Archived).
Masters, Michael (20 May 2008). "Written Testimony" (PDF), United States Senate Committee on Homeland Security and Governmental Affairs (Archived).
Chazan, Guy; Neil King Jr. (4 June 2008). "Is Oil the Next 'Bubble' to Pop?", The Wall Street Journal (Archived).
"OPEC chief appeals for calm over oil", Reuters (Archived).
Interagency Task Force on Commodity Markets (July 2008). "Interim Report on Crude Oil" (PDF) (Archived).
"Bodman: Insufficient oil production behind prices", International Herald Tribune.
a b H. Josef Hebert (10 September 2008). "Study links oil prices to speculation", Associated Press (Archived).
Gas costs are reflected in nearly everything you buy, The Dallas Morning News.
Friedman, George (27 May 2008). "The geopolitics of $130 oil", Stratfor (Archived).
a b "Was Volatility in the Price of Oil a Cause of the 2008 Financial Crisis? - Resilience", energybulletin.net (Archived).
To see table and sources: Talk:Oil price increases since 2003#World view.
"High gasoline prices spawning songs, signs, symbolic acts", Associated Press.
Reguly, Eric (12 April 2008). "How the cupboard went bare", The Globe and Mail (Archived).
Ana Campoy (20 June 2008). "Prices Curtail U.S. Gasoline Use", Wall Street Journal.
Clifford Krauss (19 June 2008). "Driving Less, Americans Finally React to Sting of Gas Prices, a Study Says", New York Times (Archived).
"The United States Inflation Rate By Year", Miseryindex.us (Archived).
Economy-wide and distributional impacts of an oil price shock on the South African economy (Report), World Bank (Archived).
"OPEC Revenues Fact Sheet", U.S. Energy Information Administration.
Jad Mouawad (6 December 2007). "OPEC Finds Price Range to Live With", The New York Times (Archived).
IEA warns of new oil supply crunch (Subscription Required). By Carola Hoyos, Ed Crooks, and Javier Blas. Financial Times.
a b Crude Oil Rises After OPEC Agrees to Trim Excess Production. By Margot Habiby and Alexander Kwiatkowski. Bloomberg L.P..
Well Prepared (Archived). The Economist.
OPEC Cut Has Little Zing. By Parmy Olson. Forbes.com.
Dirk Lammers (6 May 2009). "Oil prices jump to high for the year", Yahoo! Finance (Archived).
Assis, Claudia; Lesova, Polya (23 February 2011). "Oil futures extend gains amid unrest", MarketWatch (Archived).
Clifford Krassnov (3 November 2014). "U.S. Oil Prices Fall Below $80 a Barrel", The New York Times (Archived).
"OPEC Won't Cut Production to Stop Oil's Slump", Bloomberg News (Archived).
"OPEC Basket Daily Archives", OPEC (Archived).
Kalantari, Hashem; Sergie, Mohammed (2 January 2016). "Iran Says Post-Sanctions Crude Output Boost Won't Hurt Prices", Bloomberg News (Archived).
"NIGERIAN TRIBUNE - Energy, Oil and Gas" (Archived).
"Climate Justice: 5. Flares out by 2008?" (Archived).
"Demand", Energy Information Administration (Archived).
"Development of a pea starch film with trigger biodegradation properties for agricultural applications", europa.eu (Archived).
Chua, H.; Yu, P. H. F.; Ma, C. K. (1999). "Accumulation of Biopolymers in Activated Sludge Biomass", Applied Biochemistry and Biotechnology.
"Demand" (PDF), Energy Information Administration (Archived).
Barry James (12 September 2000). "Amid Protests, Europe's Leaders Resist Oil-Tax Cut", International Herald Tribune (Archived).
Paul Meller (3 June 2004). "EU states to avoid unilateral oil tax cuts", International Herald Tribune (Archived).
James Kanter (9 November 2007). "European politicians wrestle with high gasoline prices", International Herald Tribune (Archived).
Peter Alford (2 April 2008). "Japanese motorists reap fuel windfall", The Australian (Archived).
Why Are Gasoline Prices High (And What Can Be Done About It)? (Archived).
Tomas Havranek; Zuzana Irsova; Karel Janda (January 2012). "Demand for gasoline is more price-inelastic than commonly thought", Energy Economics.
Gueret, Thomas Travel Demand Management Insights (Archived).
Litman, Todd "Appropriate Response to Rising Fuel Prices" (Archived).
Kenworthy, J R Transport Energy Use and Greenhouse Emissions in Urban Passenger Transport Systems : A Study of 84 Global Cities (Archived).
Lundberg, Jan. "The maturation of Matt Simmons, energy-industry investment banker and peak oil guru", energybulletin.net (Archived).
Matthews, H. Scott (2005). "Telework Adoption and Energy Use in Building and Transport Sectors in the United States and Japan", Journal of Infrastructure Systems.
Energy Markets Emergency Act of 2008 (Archived).

External links

U.S. DOE EIA energy chronology and analysis
Oil Price History and Analysis