Thursday, June 20, 2013

China recession will be disaster for oil industry

As China slips into recession (less than 7% growth), oil demand will drop. Low oil prices are more a threat to the oil industry than high prices. Billions of dollars in hard, fixed assets are tied up in the chase for unconventional oil. These assets would be stranded. In addition, reserves are defined as recoverable oil at current market prices, these would drop as well, reported or not.

This means the oil industry is desperate to keep demand up. They need public transit to suck, and fares to be high. They need you in a car.

When demand falls in China this will get even worse. There will be more government subsidy of oil, leases allowed to easier oil, wars, pipeline approval, direct subsidy, the works.

We can fight back. Move to town. Sell your car. Ride the bus, walk, bike, use carshare. Join a transition group.

Join the fight for free public transit. Free transit will break the critical mass of the autosprawl system and set us on the path to the post carbon world. 

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