The Global Oil Rush

Given rising demand and dwindling supplies, consuming nations should look south and east.

Issue: Summer 2006

America cannot depend upon a finite supply of hydrocarbons located in unstable regions of the world for its energy needs. And without energy, economies collapse.

Consider the fate of Georgia. At the time of the breakup of the Soviet Union, the republic was considered to have one of the strongest economies of the USSR, with a prosperous agricultural sector, a strong industrial base and an entrepreneurial culture. Civil war and political strife helped to weaken the economy, but successive energy crises caused both by Georgia's inability to pay for energy and periodic cut-offs of supplies delivered painful shocks to Georgia's energy-intensive sectors. By 2003 the country's income was a scant 40 percent of its 1991 level, with some 52 percent of the population living below the poverty line.

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