Tuesday, June 12, 2012
The Resource Shortage Is Real
In late March and early April, as average U.S. gasoline prices climbed above $3.80 per gal., headlines warned that soaring prices could imperil President Obama’s chance of re-election. But just two months later, after average prices dropped by 30 cents per gal., what once seemed a deal breaker for the election is no longer considered an issue. This narrow focus on short-term fluctuations in the price of a single commodity blinds us to one of the biggest threats to the world’s economic progress and political stability in the decades to come: resource scarcity.
Although gas prices, along with prices across the commodity complex, are currently trending downward, the fundamental imbalance between constrained supply and skyrocketing demand continues to point to higher prices in the long term. A recent IMF analysis, for example, suggests that the price of oil could more than double over the next decade, ascending to $180 per barrel by 2022. While this trend is worrying, hundreds of millions of people around the world are already suffering the effects of resource scarcity, as people in places like India and African nations struggle to gain access to potable water. A February report from the National Intelligence Council warns that water shortages will likely lead to political disruptions and many more violent wars in strategically important regions over the next decade.