What are the economic implications of oil dependence?

Oil dependence has considerable economic implications. Shrinking petroleum supply and rising demand translate into higher costs. Both American consumers and the U.S. economy are already suffering from the cumulative effect of recent increases in gas prices. Fully one-quarter of the U.S. trade deficit is associated with oil imports. By some estimates, we lose 27,000 jobs for every billion dollars of additional oil imports. Serious domestic and global economic dislocation would almost certainly occur should disruption of supply take place.

For a discussion of the hidden cost of oil click here.

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