This chart is from the Economist.
I thought this was interesting. It is proving that we are working towards an independence from oil. Since the 1970s oil shock the price has gone down from the mid 80s to about 2001 and yet we still reduced consumption of oil.
They call this “Rising price, falling impact” but it seems that even when the price is not rising there is a falling impact.
What could have caused this?
Well since this is because it is consumption per unit of GDP. (GDP being the basic output of the countries.)
Total consumption has not gone down. We are still consuming more oil everyday. It is just taking less oil to produce things in our country.
This might be because other sectors don’t require oil or it could be that the sectors that do use less gas, through innovation. Or this could be a combination of both.
So what does this mean for me and you?
Well it proves that we can not easily change into different energy sources. It does prove however that we are beginning to move away from oil as being the driving force of our economy. This means that if we were to have another oil shock or you could even say we are in one now. That it doesn’t have the same effect on the economy as it once did in the 70s.