Oil Independence

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Unformatted text preview: l bank first deputy chairman, told a conference last week. That’s more than double the net departure of $33.6 billion last year. It would bring the total since 2007, the last year of inflows, to more than $300 billion , according to central bank data. 181 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Economic Decline = Low Prices 182 Oil DDW 2012 1 Economic recessions reduce oil prices and cause instability in markets and producing regions Umbach, Centre for European Security Strategies (CESS), Munich-Berlin, Germany, 09 Frank Umbach, Centre for European Security Strategies (CESS), Munich-Berlin, Germany, 3-6-09, [“Global energy security and the implications for the EU,” Energy Policy Volume 38, Issue 3, March 2010, Pages 1229–1240, http://www.sciencedirect.com/science/article/pii/S0301421509000421] E. Liu Given the high dependence of many oil-producing countries on its oil revenues, a dramatic decline in global energy consumption as a result of an economic recession (like an economic– financial crisis in China) and accompanied by a higher decline of international oil prices could trigger domestic or even regional instability in many of the world’s major energy-exporting countries (Myers Jaffe and Manning, 2000). In 1998 during the Asian financial crisis with its worldwide impacts, several oilexporting countries faced a decline of 50% in their national incomes within a year, which caused severe political and economic repercussions. At the end, governments changed in Algeria, Brunei, Indonesia, Nigeria and Venezuela as those losses exacerbated other national problems. With oil prices up to US$147 per barrel until recently, the global effects of falling oil prices on the social–political stability of many producer and exporter states, compared with the Asian crisis during 1997–1999, could be much harder and more dramatic for their domestic stability. While the present worldwide financial crisis reduces the global energy demand and may ease a number of those challenges and problems linked with high energy prices, it may also decrease further much-needed investments in all types of energy infrastructure and energy efficiency measures for future global energy stability. Likewise, state funding and private risk capital for the worldwide expansion of renewables as well as for innovative energy research and development programs in order to mitigate global climate change are at risk for being reduced, which may slow down the transformation to a global non-fossil energy future. 183 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Fuel Efficiency Doesn’t Affect Oil 184 Oil DDW 2012 1 Fuel efficiency improvements don’t affect oil prices Borenstein, E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business, Co-Director of the Energy Institute at Haas, and Director of the University of California Energy Institute, 08 Severin Borenstein, E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business, Co-Director of the Energy Institute at H...
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This note was uploaded on 01/30/2013 for the course ECON 101 taught by Professor Burke during the Spring '13 term at Southern Arkansas University.

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