Oil supply could kick economy down

A new study indicates that oil supply has stagnated while world economies still want to grow. The oil dilemma could hold growth back. That might be mild good news for climate, but it's not good news for the economy.

Oil prices threaten economic recovery and growth

 

"Historically, there has been a tight link between oil production and global economic growth," the co-authors wrote. "If oil production can't grow, the implication is that the economy can't grow either."

Calculations from the International Monetary Fund, for example, say that to achieve a 4 percent growth in the global economy in the next five years, oil production must increase about 3 percent a year.

"Yet to achieve that will require either an heroic increase in oil production, ... increased efficiency of oil use, more energy-efficient growth or rapid substitution of other fuel sources," according to the commentary.

"Economists and politicians continually debate policies that will lead to a return to economic growth. But because they have failed to recognize that the high price of energy is a central problem, they haven't identified the necessary solutions: weaning society off fossil fuel."

Nuclear, anyone?