In the past few years, petrol price increases have so angered consumers, such as truckers and fishermen, that they blockaded petroleum refineries — in Britain and France, for instance.
Within days, food distributors and other essential services had run out of fuel. Whole industries were hit, and the economic losses were calculated in the billions.
Our economies rely on cheap oil. When its cost goes up, we lose stability. One of the things that is expected to happen if future oil production falls is that we will pay more to supply ourselves.
Whether the world has already reached that so-called ‘peak oil’ point is disputed, notably by the big energy companies. But there is no denying that we are drilling deeper and deeper at sea and transporting our daily supplies overland great distances.
Caspian Sea oilfields lie some 4,000 km from European end-users. Saudi oil travels more than 10,000 km by sea to reach the US.
An uninterrupted flow of oil is vital for economies to grow. It is inevitable that competition between the world’s established industrial economies and fast-developing ones will bring more price challenges. And it is evident that governments are currently giving spending priority to consumption well before paying to cut carbon emissions.
Difficult equations need to be worked out if there is to be any global agreement on carbon caps or pricing carbon. It is also clear that part of the answer lies in diversifying energy sources, to reduce our reliance on oil.