24's Doomsday Scenario Realized: Oil Over $100 A Barrel

After being found out by Secretary of Defense James Heller, Logan justified his actions by saying: "This country needs energy more than you or anyone in this gridlocked government cares to admit. We'll see how you judge me when the cost of oil goes up over $100 a barrel and the people who put me in office can't afford to heat their homes or run their cars."

Well, guess what? Oil just went over $100 a barrel in real life. Is this a bad thing? Yes. Is it as bad as many people think? No.

For one thing, we have to consider inflation. In December 1979, the monthly average price of oil peaked at $38 per barrel. This works out to $100.28 in January 2007 dollars, so $100 oil is nothing new. Furthermore, the overall economy is in much better shape now than the stagflation of 1979. Many of today's homeowners couldn't even imagine mortgage rates in the high teens.

However, oil prices dropped sharply in the early 80s, and they've been rising sharply since the late 90s. Higher oil prices obviously mean you pay more for gasoline and oil heat. But oil prices effect the broader economy in many other ways. For example, goods cost more because it costs more to transport them, and higher jet fuel costs mean less tourism.

The effects of the recent run up in oil prices, while not pleasant, have been quite small compared to what will happen when the world really starts to run out of oil. "Peak oil" refers to the point in time when the world is producing as much oil as it possibly can or ever will. Before that point, we lived in a world of increasing abundance, and after that point, we'll live in a world of increasing scarcity. What happens when oil gets too scarce? Remember that lack of oil was one of the reasons Japan bombed Pearl Harbor.

When will we reach peak oil? Some people think it will happen in the 2020s or 2030s, while some people think it has already happened. It's hard to say when it will occur or what the effects will be. Many people predict that a global depression will occur at some point. Some people even predict the complete collapse of modern civilization. Unfortunately, this is very likely to happen if we don't solve our energy problems in time.

For now though, life will go on. Oil hitting $100 a barrel is a psychological milestone only, and 24 was just being dramatic. But there is a crisis brewing, and we'll need to reduce our energy consumption and develop alternate energy sources before it's too late.