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A barrel of oil: $250
THE CANADIAN PRESS
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It promises to be a whole new world if oil prices continue their relentless upward spiral
June 19, 2008
Tamsyn Burgmann
The Canadian Press
TORONTO
When a wiry, bearded man tried to enlist Pennsylvania labourers to punch deep holes in the earth in 1859 in search of oil, they thought he was crazy.
But what may have appeared foolhardy to the workers seemed worth a shot to Edwin L. Drake, who went on to strike black gold, launching the modern petroleum industry.
Not even Drake could have predicted how oil would transform a civilization, let alone that one day, the head of the world's largest utility would forecast that the price of a barrel of oil could eventually skyrocket to $250 US -- possibly by as early as next year.
Though largely dismissed by industry analysts, the wild card $250-a-barrel scenario -- floated last week by Alexey Miller, chief executive of Russian gas producer Gazprom -- would have far-reaching implications and change life in Canada on nearly every level, experts and observers say.
"It would really rewrite the map of the way we live our lives,'' said Richard Worzel, a financial analyst, author and one of Canada's best-known futurists.
"You can pick any aspect of our lives, and it would change it significantly.''
Energy infuses everything Canadians do, from the most basic travel and home-heating needs to pervasive applications in food production, manufacturing and industry.
Such a sustained increase in oil prices would result in widespread inflation and dramatic lifestyle changes, Worzel said.
Fresh produce in the winter would be costly and difficult to come by, as would most products manufactured overseas, he said. Home-schooling and telecommuting would become commonplace, while manufacturers would develop new means of mobilizing their workforces.
"Half the workforce is wired with a BlackBerry now, anyway,'' said Robert J. Sawyer, an award-winning science-fiction author based in Mississauga.
With the proliferation of computers and high-speed broadband Internet access, Canadians and their families are already hard-wired for a more virtual lifestyle, Sawyer said.
"Instead of people in single-occupant vehicles pouring into the downtown and spending their money to do that, they're the ones telling their boss, 'I don't even want to come in, unless you're going to pay me to do that."'
Sawyer said he envisions a resurgence of national rail service for passengers looking to traverse the country.
Worzel said hybrid buses, high-occupancy vehicle lanes and carpooling would dramatically rise in popularity in the short term before Canadians, unable to bear the situation much longer, would be forced to make more dramatic lifestyle changes.
Real estate prices would soar in the cities, while the value of country homes would depreciate as people moved to a more compact, European model of living, he said.
The local pub would be a central social hub in a new, neighbourhood-oriented society, while smaller homes would become commonplace.
"We'd value our agricultural lands, and not pave them over,'' said economist David Foot, co-author of the bestselling book Boom, Bust & Echo.
Outrageous oil prices would finally push Canadians into truly more sustainable practices, as the gains from global trade are reversed and society turns back to local production, he said.
"The world isn't flat anymore, it becomes very lumpy,'' Foot said. "At last, we may be able to create jobs at home rather than in some other country.''
As consumption and production come together, Foot said, pollution might fall off as society comes face to face with the immediate environmental consequences faced in countries like China and India. Solar energy and wind power would move to the forefront.
A soaring Canadian dollar would likely result, however, decimating exports, spurring uneven growth and triggering political turmoil, said David Detomasi, an assistant business professor at Queen's University in Kingston.
"It would radically change the politics of Canada,'' said Detomasi, who predicted a widening of the gap between rich and poor, and increased polarization between Canada's so-called "have'' and "have-not'' provinces.
Nonetheless, said Sawyer, it's highly unlikely oil prices would ever hit $250 a barrel or that North Americans would ever have to give up oil entirely
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