Peak Oil and Product Costs
Everyday, there is more news about peak oil. Some of these give me a little chill when I read them. Here is a short look at how rising oil prices (probably due to peak oil) are impacting the costs of plastics and other petroleum derived products.
Take this NPR story from yesterday.
Dow Chemical, which is basically the number one or two petrochemical user in the USA, has raised prices a third (?) time this year, this time by 25%. This appears to be on top of a 20% increase only last month.
Dow's oil and natural gas consumption is just under one million barrels per day, the same as the extraction rate of Qatar. The bill may be $32 billion per year, up from $8 billion in 2002. The president of Dow is, of course, advocating for finding more oil, using renewables, and conservation.
Another interesting bit, which I'll just mention, is that for a 1% increase in global demand for oil, the price has to go up 20% so that the consumption stays at the same level. That is quite amazing, and shocking really, given that an increase of 1.5% for demand has been common. This might suggest that we can expect a 30% annual inflation rate (increase in the price of oil) as a baseline. Notice, according to the rule of 70, this will double prices in just over two years... Do the math, and you can see what I'm getting at.
Take this NPR story from yesterday.
Dow Chemical, which is basically the number one or two petrochemical user in the USA, has raised prices a third (?) time this year, this time by 25%. This appears to be on top of a 20% increase only last month.
Dow's oil and natural gas consumption is just under one million barrels per day, the same as the extraction rate of Qatar. The bill may be $32 billion per year, up from $8 billion in 2002. The president of Dow is, of course, advocating for finding more oil, using renewables, and conservation.
Another interesting bit, which I'll just mention, is that for a 1% increase in global demand for oil, the price has to go up 20% so that the consumption stays at the same level. That is quite amazing, and shocking really, given that an increase of 1.5% for demand has been common. This might suggest that we can expect a 30% annual inflation rate (increase in the price of oil) as a baseline. Notice, according to the rule of 70, this will double prices in just over two years... Do the math, and you can see what I'm getting at.