Welcome to the 'New Somerset and Dorset Railway'
Wednesday, May 28, 2008
I had an interesting message on the message board yesterday claiming that the rising cost of oil was a 'bubble'. Sorry to bring economics into this blog, but it is my degree subject and somebody else started it, and I don't believe we should leave false statements unchallenged!
In a bubble demand continues to increase as supply does, demand keeps just short of supply - otherwise of course the bubble would burst.
But look at the Supply Versus Demand chart above (for oil) courtesy Moneyweek magazine. (full article) .
I'd recommend Moneyweek to anyone who wants a fresh view on economics, finance etc! It knocks the staid and leftie Economist into a corner!
The blue line continues to rise, but the red line (supply) actually starts falling slightly from its height in 2005. It may well be that 2005 was the year of Peak Oil - this chart certainly seems to support this.
Even our unelected prime minister Gordon Brown today admitted that oil will now become scarcer and scarcer. This will all have an effect on future government policies, which will inevitably (now the cat's out of the bag!) revolve around increasing public transport provision as road traffic contracts due to the ever-increasing cost of fuel. That can only be good for the S&D. We're not asking much, only that planning permission is automatically granted for rail reinstatement and that the cost of land is pegged so that the reinstatement can proceed quickly.
And for those (non-economists) who insist we'll all be driving electric cars in the future - forget it, it's a pipe dream. Our electricity generating capacity is already under great strain, this will only get worse as oil becomes scarcer and the Chinese buy up all the coal and uranium. There are of course renewables, but these will also be affected by rising commodity costs. If lucky we'll be able to maintain generating capacity, though it's going to be a big challenge and will require about 20 new nuclear power stations. But the idea we'll all be able to drive magical little Noddy cars is a fantasy, cruelly encouraged by the media and some politicians. In any case the road infrastructure itself will begin breaking down soon, as the oil for asphalt becomes scarcer and more expensive, and first lorries, then cars, then buses begin to vanish from our crumbling roads.
The outlook for the S&D has never been brighter.