The stalled economic engine of our country would begin rolling again, we would see a surge in loans to the construction industry, increases in production and (hopefully) sales of autos, large and small manufacturing, people would be called back to work and everything would be great again.
Well... there is one not-so-small problem with that scenario.
For those who have been following the roller coaster ride in the energy industry, you already know how close our current supply and demand is. Since the global economy started to significantly slow last fall, we have reduced our global consumption of oil by over 3 million barrels per day (bpd), to about 83 million bpd. This is about 2.4 million bpd less than in 2008 and the lowest level since 2004. A real reduction, but nothing like the collapse in demand we have been hearing about. On top of that the work to secure both additional sources of oil and investment in alternatives has almost come to a standstill. Billions of dollars of new projects have been delayed or cancelled completely and the oil services industry, those companies actually doing the exploration and drilling, has cut back almost 50% since last year. According to the Rig Count industry website who follows the changing number of active oil and natural gas rigs:
The year-over-year oil exploration in the US is down 42.3 percent. Gas exploration is down 48.0 percent.So if our economy begins to ramp up again it will not take long for our demand to outpace our supply. When that happens prices go up. Oil has already risen from a low of $35 per barrel to the low $50's while demand has been low. This cycle of economic activity causing higher energy prices is a relationship we have not seen in the past.
We simply do not have the option to just re-start our economy in the same fashion we have been doing for the past 100 years. We are being forced to re-structure our economy to be more resilient to these supply constraints while increasing our local self-sufficiency. This will result in reducing our dependence on massive amounts of energy from faraway countries in order to bring us our food, to heat our homes, and to manufacture the items we truly need for a high standard of living.