Posted By RichC on June 27, 2005
I read and interesting article this weekend that detailed the events and price points of oil adjusted for inflation. Without including the Subscription copywritten Data, I found it interesting to note that during the years 1979 – 1985 we actually sustained prices higher than our current $60/barrel. (peaked at $90/barrel* adjusted for inflation according to the WSJ)
Information not included in the data were that most consumers in the 70s and early 80s had already experience high inflation for several years which had greatly zapped their buying power (different from current conditions) and most had less excess income in which to devote toward energy costs that peaked a 1/3 higher than today’s. Point two is that the vehicle choices, housing, office building, lighting, appliances, etc. were less efficient as a whole in comparison to what most Americans have available today. I don’t mention this to belittle $60 oil … but to question whether we really should be complaining?
I did not realized that only 15 years ago in 1990 that the adjusted price per barrel was on par with the current price. Hopefully the attention we are seeing devoted to our current energy cost will create an attitude of conservation and promote alternatives aggressively that stick this time … but frankly looking at history, I’m not holding my breath.
A final point is that if we compare the economic boom in China (not that we can), to Japan in the 90s … a collapse in the Chinese economy like Japan’s in mid 1997 could easily ‘half’ the price of crude just as in the late 90s when we saw $15/barrel oil.