Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
... but what the end result would be is highly path dependent. It would mean gasoline at 1.5 to 2 times European prices, as opposed to merely closing much of the current gap, as in fall of 50% in the tale above.

If it were to drive the US toward energy independence, which is of course feasible for the US, oil becoming 4 to 5 times more expensive for Americans than for Europeans would lead to a reversal of the sluggish investment in productive capacity of the last three decades.

And of course it would lead to declining global oil demand so could well stave off global oil price shocks for a while as we enter the downward slide part of Peak Oil.

However, clearly, while a sudden fall by 50% would be a shock, it would be easier to accommodate than a sudden fall by 75% or 80%.

I don't follow the "foreign students or exports" - foreign students are in the story as one example of export earnings.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 10:24:25 AM EST
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