The price of a barrel of oil surged to over 80 dollars Monday, the highest level in seven years. The price at the pump across Southeast Louisiana now sits at three dollars a gallon, up nearly ten cents in a week per AAA.
One energy industry expert warns these kinds of price shocks could be our future given current global policies aimed at restricting fossil fuel extraction and refinement. Tulane Energy Institute Associate Director Professor Eric Smith told WWL that drivers should start preparing for a world with higher prices, and far more volatility.
“You’re going to have to watch the pumps more closely than you have in the past,” said Smith. “What you are going to see is more volatility and higher prices for hydrocarbons.”
Climate scientists compiled a report this year demonstrating that unless the world hits carbon neutrality by 2050, irreversible, catastrophic levels of climate change will occur.
Smith said this new future of higher prices and volatility means in the near future we could see prices regularly ricochet between about $2.50 a gallon and four dollars several times a year. That’s because of federal policies restricting domestic production combining with global banking policies that have made it hard to obtain new capital for oil ventures.
Smith said because of that lack of supply and capital to keep up with rising demand seasonal demand swings will have bigger impacts on prices. Unlike in the past, these ballooning oil prices won’t be as big of a boon to the state budget as they have been.
“Unfortunately oil production is way, way down compared to what it was 20 years ago and we are still suffering from Hurricane Ida’s impact on some of the production facilities,” said Smith.
