The end of cheap oil means the end of easy economic growth”

So said Jonathon Porritt in Capitalism as if the World Matters (2007, 2007):

“(T)he end of cheap oil means the end of easy economic growth, and the end of that whole `historic interlude’ in which cheap oil fuelled fast growth, high living standards and the kind of `live for today, live for yourself’ lifestyles that have now become so destructive.

“This will be a crunch point for politicians in every party in every country.

“Conventional economic growth and cheap oil have marched hand in hand for the best part of 60 years; within just a few years, it will become increasingly apparent that both are on their last legs.”

Today in the FT :

“The cost of premium quality crude varieties in the physical market, such as Tapis of Indonesia and Bonny Light of Nigeria, surged on Wednesday above $100 a barrel . . . the sharp rise has also heightened concerns about the impact of soaring commodity prices on the global economy, particularly in emerging countries, as it comes on top of high costs for agricultural commodities and metals.

“Brent crude, the global benchmark, hit an intraday high of $98.8 a barrel on Wednesday, the highest since September 2008, when oil prices were in the midst of a collapse from their $147-a-barrel record. “Brent can hit $100 any day now. There’s a lot of upward momentum,”  Michael Wittner, at Société Générale, said.

Time for change? 

Even if the oil price eventually drops, beneficial changes in our economic policies will be valuable. As Michael Hanlon – a writer commended by the Royal Institutionadvises:

“the only price we will have paid is to have conserved precious fossil fuels and invested in innovative new technologies.”