Barnett on the "oil crisis"

Thoughts and good links at More on the great oil shift:

To me, a crisis is unforeseen, not one of my own, long-term making. As for "power," casting natural resources as some sort of ultimate trump card or wealth machine is just plain bad history and economics. As we know, most of what constitutes wealth is intangible. I don't make a lot of money because I have a lot of stuff, and I wouldn't tell my kids to go out and get stuff to become powerful. I'd tell them to get educated to the max extent possible.

Still, the first one has a killer chart that plots consumption and price.

On average, oil today costs about what it did in the 1979-1983 timeframe, with today's $100 per barrel matching the 1980-81 spike--in real terms. When you see that the average price in 2007 stands at around $70, you realize the level of speculation going on right now.

The most interesting bit? Oil consumption peaks in 1979 at about 65mbd and then retreats slowly back to about 58 mbd in 1983, reaching a new consumption height only in 1988. So for basically a decade we held oil consumption static.

How so? Market price did everything required.

But, of course, once you get past the Cold War and those 3 billion new capitalists start cranking, demand takes off, going from 70 to roughly 90 in about a dozen years, when the rise from 50 to 70 took roughly twice that long (1970ish to 1995ish).

In the land where everything is a "crisis," those who keep their heads can be kings...