Friday, March 12, 2010
Since before World War II increasing a nations production, growing the GDP, and oil consumption have been tied together. So when the demand for oil overtook the world’s ability to produce oil the world’s economies were brought to their knees.
This close correlation between GDP and oil consumption is the justification for the billions of dollar in subsidies the federal government gives oil companies. It was the whole basis of the neo-con economic platform.
That’s why this article on projected oil demand caught my attention. The US oil consumption is expected to decline by 0.3% while GDP is expected to rise 1.1%.
This continues the trend from last year.
Basically, America is growing, slowly, and recovering from the Great Recession while decreasing the amount of oil we use. To put it in the old terms it is as if we expanded the amount of domestic oil production by 1.5% every year. This is roughly the expected amount of oil from ANWR, the proposed Alaskan drilling project.
The proponents of drilling in Alaska and other places that are less likely to generate meaningful amounts of oil or, “drill, baby, drill” have argued that it is impossible grow the GDP while reducing oil consumption. Well it looks like reality paints a different picture.
But wait it gets better, the Federal programs that helped spur this oil savings, Cash for Clunkers, and Cash for Caulkers (lol, I love that name) cost less than the subsidies given to the oil companies.
So not only does encouraging Green Technology work to decrease our demand for oil while letting the economy grow it costs less than supporting the old way.
If the US continues to support Green Technology, we can pull out this recession growing our GDP while decreasing our oil use. Having our economy’s growth no long dependent on oil consumption will lead to a fantastic future.