McKinsey: The next energy crissis
The one bright spot in this economic crisis for consumers has been the cheap cost of oil, about $2.00 a-gallon, from as high as $4.5o this summer. Will it last? In a recent report the McKinsey Global Institute says no, expecting for the 2010-2020 period global energy consumption to grow by 2.3 percent per annum, compare to 1.0% for the current 2007 to 2009 period, a trend that would drive the price of oil.
McKinsey asks: “What should policy makers do to head off a renewed imbalance between oil supply and demand, and how can they do that at the lowest possible cost?”
But why keep oil prices down? After all its not until crude hit historic highs that consumers started embracing alternative energy. This might be true but high prices are not sustainable and endup hurting the economies of importing nations.
McKinsey identifies a number of solutions to cut oil consumption, including:
- Increase the size of trucks in U.S. and Europe. Larger trucks would mean more goods transported but less trucks on the road
- Enhancing car and truck effciency through fiscal incentive
- Mandate that all cars in the U.S. be flex-fuel cars
