Publications: Notes at the Margin

Energy's China Syndrome (August 24, 2015)


The China Syndrome was a 1979 movie starring Jane Fonda, Michael Douglas, and Jack Lemmon. The film concerned the cover-up of faults at a nuclear power plant. The term “China Syndrome” described the potential for a reactor meltdown to burn all the way through the earth to China. This, of course, was an exaggeration, as we learned from the Fukushima nuclear disaster. Here the China Syndrome refers to the economic meltdown that began in China at the start of July and now threatens to engulf the world. As in 1998, economic contagion in Asia endangers economic activity everywhere. The consequences for oil will be significant global surpluses should the problem spread. Some believe crude prices will fall into the low thirties. We suggest here that the floor may be $20 per barrel or even lower absent serious production cutbacks.


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