Folks should take note of this article that will appear in the Tues. edition of the WSJ:
DiColo, Jerry A., Baskin, Brian, 2011. The stealth return of $100 oil. The Wall Street Journal, eb. 22.
Higher oil prices will be a drag on the US economy as the following quote from the article indicates:
"Economists watch oil prices closely because a rise in the cost of oil can crimp economic growth. Each $10 move higher in oil prices can knock a few tenths of a percentage point off any increase in gross domestic product, though economists differ as to precisely how much."
Even more concerning:
"Nobuo Tanaka, head of the International Energy Agency, said Friday that if oil prices remain above $100 a barrel, that could create a significant burden on the global economy. At current levels, the amount of money the world spends on oil could hit 5% of GDP, or the total value of all goods and services produced, a level last seen in 2008, when oil briefly hit $150 a barrel."
Higher oil prices means there will be significant impacts for American agriculture. Commodities are already experiencing rapid price increases. Higher energy costs will add to the rise.
We began the Regional Food Systems project in Mar. 2008. Had the project been fully funded by the USDA, there would be a solution in place by now. For those interested in this topic, please see:
As petroleum prices increase, Americans will cut back driving. However, it is hard to cut back on transport of food given the geographical concentration of agriculture in the US.
Technologies for Regional Agricultural Systems are an important national priority.
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