Scenario planning of removing 3.5 million barrels of oil per day

Martin Tobias points us towards a simulation that was done by some highly credible people. One of the key take-aways for me is this would further accelerate a shift not only to bio-fuels but a shift towards electricity being a larger part of the energy mix. For an already stressed grid, this means that the grids 20-30% efficiency will no longer be acceptable. The businesses forming around this need (i.e., increasing the grids efficiency) would dramatically benefit -- e.g., MicroPlanet, Itron, etc.

More on the simulation...The premise is that a series of geopolitical (terrorist attacks, political unrest) and natural (cold winter) factors combine to remove 3.5 million barrels per day of supply from the market. Any of those are very plausible. Among the negative outcomes beyond the obvious expected price hikes for gas, oil, etc.

• Fall of gross domestic product for two consecutive quarters;

• Drop in consumer confidence by 30 percent;

• Spike in the consumer price index to 12.6 percent;

Participants aren't people you'd expect to be alarmists so it makes this all the more credible. They included the following people:

• Robert M. Gates, former Director of Central Intelligence;

• Richard N. Haass, former Director of Policy Planning at the Department of State;

• General P.X. Kelley, USMC (Ret.), former Commandant of the Marine Corps, member of the Joint Chiefs of Staff;

• Don Nickles, former U.S. Senator;

• Carol Browner, former Administrator of the Environmental Protection Agency;

• Gene B. Sperling, former National Economic Advisor;

• Linda Stuntz, former Deputy Secretary of Energy;

• Frank Kramer, former Assistant Secretary of Defense for International Security Affairs;

• R. James Woolsey, former Director of Central Intelligence.