<News Deposit/Open Thread The Oil Drum Shepherd Bliss: Hurricane Katrina, New Orleans and Peak Oil>

29 comments on Yergin: The Katrina Crisis, a hurricane produces an integrated energy disaster

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louGrinzo on September 3, 2005 - 1:12pm Permalink | Subthread | Parent | Comments top
Without diving into the details of Yergin's comments (because I haven't read them yet), let me add one observation: "Crisis" is in the eye of the beholder.

Widespread gasoline shortages that last more than a day or two would create a crisis.  But what about gasoline in the $4 range (just slightly higher than the US price as I type this), but with only a very few, localized outages?  If you're a lower-income person, then the higher gasoline price could indeed be a very sizable and immediate burden, but for the economy overall, I don't think it qualifies as a crisis.

What if gasoline hit $6/gallon, and stayed there until late 2006?  I would probably consider that a crisis, even without shortages.

My point is that it's ferociously difficult to decide what is and isn't an "energy crisis", and for each of us it's a function of several factors (availability, longevity of the higher price, anxiety produced by uncertainty about future prices, etc.).  

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JLA on September 3, 2005 - 2:26pm Permalink | Subthread | Parent | Comments top
Lou,
My sense is that the prices we are seeing now (>$3) are ample to produce a good old-fashioned energy shock.  Even without the drag on consumer spending (which is substantial), firms from many sectors will be reeling at these prices--especially given how quickly we have gotten here, leaving little time for adjustment.  

That, combined with the heating fuel/natural gas crisis we are sleepwalking into, qualifies as a crisis in my book.  

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JLA on September 3, 2005 - 2:47pm Permalink | Subthread | Parent | Comments top
A bit optimistic about the long term, but a good article from the Post:

"Storm's Economic Shock, Job Losses Likely to Rival Worst
Hurricane Katrina, by forcing an exodus of workers and families from New Orleans and surrounding areas, appears likely to rank alongside Sept. 11, 2001, and the Arab oil embargo of 1973 as one of the nation's most serious and sudden economic shocks -- particularly in terms of job losses -- in recent memory."

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/02/AR2005090202468.html

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Donal on September 3, 2005 - 6:51pm Permalink | Subthread | Parent | Comments top
It's a recession when your neighbor can't afford to buy gas or heat his home; it's a depression when you can't afford to buy gas or heat your home.
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29 comments on Yergin: The Katrina Crisis, a hurricane produces an integrated energy disaster

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