Global Oil Risks in the Early 21st Century

Energy Policy, Forthcoming

15 Pages Posted: 30 Sep 2011 Last revised: 23 Dec 2011

See all articles by Dean Fantazzini

Dean Fantazzini

Moscow School of Economics, Moscow State University; National Research University Higher School of Economics

Mikael Höök

affiliation not provided to SSRN

Andre Angelantoni

Post Peak Living

Date Written: September 30, 2011

Abstract

The Deepwater Horizon incident demonstrated that most of the oil left is deep offshore or in other difficult to reach locations. Moreover, obtaining the oil remaining in currently producing reservoirs requires additional equipment and technology that comes at a higher price in both capital and energy. In this regard, the physical limitations on producing ever-increasing quantities of oil are highlighted as well as the possibility of the peak of production occurring this decade. The economics of oil supply and demand are also briefly discussed showing why the available supply is basically fixed in the short to medium term. Also, an alarm bell for economic recessions is shown to be when energy takes a disproportionate amount of total consumer expenditures. In this context, risk mitigation practices in government and business are called for. As for the former, early education of the citizenry of the risk of economic contraction is a prudent policy to minimize potential future social discord. As for the latter, all business operations should be examined with the aim of building in resilience and preparing for a scenario in which capital and energy are much more expensive than in the business-as-usual one.

Keywords: Peak oil, Economic risks, Energy transition risks, Government risks, Business risks

JEL Classification: Q30, Q31, Q32, Q34, Q47, Q48

Suggested Citation

Fantazzini, Dean and Höök, Mikael and Angelantoni, Andre, Global Oil Risks in the Early 21st Century (September 30, 2011). Energy Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1935986

Dean Fantazzini (Contact Author)

Moscow School of Economics, Moscow State University ( email )

GSP-2, Leninskie Gory
Moscow, 119992
Russia
+7 495 5105256 (Phone)
+7 495 5105267 (Fax)

HOME PAGE: https://sites.google.com/site/deanfantazzini/

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

HOME PAGE: http://www.hse.ru/org/persons/11532644

Mikael Höök

affiliation not provided to SSRN ( email )

Andre Angelantoni

Post Peak Living ( email )

743 Portola Street, Suite B
San Francisco, 94129
United States

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