The Upside and Impact of High Oil Prices
I listened to a great give-and-take on the upside and changes that go along with having really high oil prices -- a world where oil costs $200 a barrel. Such a spike, if permanent, could have far-reaching changes for societal organization. Some of the more interesting long-term changes that we might expect, according to the experts:
- Civil unrest, especially in oil-producing nations.
- Increased protectionism and a drawback from globalization.
- Market winners in cleaner energy industries.
- An increase in public transit use and demand, which will expand systems. An interesting effect of expanded systems is that it leads to economic growth in the expanded areas, so cities will grow faster than they are.
- Exurbs will decline in population and value because their designs around automobile use will no longer be feasible for many.
- Walkable urban areas could see a huge increase.
- Telecommuting will expand in a big way, which will allow people to choose where they live based more on personal preferences than work factors.
- Greater percentages of people living in urban places, with numbers possibly as high as 70% in the coming decades.
I had a couple reactions here. The first is to the decline of a place like Palm Desert, where I grew up. It's really a kind of strange to think that all of the growth over the past couple of decades there could be erased just as fast if oil prices stay high and a reasonable fuel alternative for automobiles doesn't pop up.
A second is the cultural and political changes that come with having 70 percent of the country living in urban areas. Hello, progress.

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Comments
That's just speculation right? The world has never been in a situation like this before, right? I'm not so convinced that anything will change beyond how much we all complain about the price of oil. Perhaps people already living near an urban area are more likely to move to the city to save in gas, but I just don't see people living in cabins on lakes in Maine moving to Portland to save some money on oil. Plus, no matter how much we save on gas in New England, we still have to heat our houses with oil.
Posted by: Brianna | June 13, 2008 9:23 AM
We've never been in this situation ever. The piece envisions a world where oil costs $200/barrel, and we're not there yet. You have to think about how much society is organized around oil being cheap. Think about all the transportation costs of trade and how much a suburban family spends on gas.
Sure, some older folks especially will stay out there in the boonies and refuse to change their habits no matter the cost. That's the 30 percent of non-urban dwellers that the article predicts. But their kids will want to live differently, for the most part anyway. It wouldn't happen over night. It would be a gradual change or habits that derives from the simple economic choices people would have to make.
See here, too (thanks, Lindsay):
http://wsj.com/public/article_print/SB121366811790479767.html
Posted by: Ryan | June 17, 2008 4:05 PM