Crikey just sent me an email, as they do. In part, it reads…”What generally prevents commodity shortages doing major damage to the economy is the price mechanism. As things get scarce, their price rises, and that provides incentives to (a) produce or discover more of them, (b) find or invent substitutes for them, (c) use less of them, and (d) recycle them or use them more efficiently. The combination of these effects minimises dislocation and allows us gradually to shift to different ways of doing things. But if governments are so short-sighted – or just plain stupid – as to try to keep petrol prices artificially low, then none of this will happen. Instead, we’ll continue happily consuming cheap fuel until we wake up one morning and discover we’ve run out, just as the “peak oil” people say.”
Well d’oh! It’s not that complicated, is it? So why are we waking up in 2006 to the need to price resources properly and avoid market distortions? We pump millions of public dollars into shared infrastructure like roads, seemingly unaware that this is subsidising road transport. We whinge about road tolls. We pay enormous sums in public medical care for car accident victims. We even (in Australia at least) make driving and leasing cars a tax saving!We are subsidising cars in the name of freedom, left right and centre.
The oil took aeons to make, it lies in pools underground. It was always going to run out sometime. Some of the pools are large, some small. Some are easier to get to than others. Some are dirtier, some cleaner. Some are on shore, some off. Some still pump at high pressure, some are losing oomph. More than likely we have found the easiest, cheapest places to pump oil and only with higher prices will it become profitable to extract it. As the price rises it gets cheaper to use not only harder-to-get-to oil but also smaller bodies, gas bodies and finally other alternatives like coal, oil shale and so on. With higher prices we can stretch this out 100, maybe 150 years?
Let’s not forget that it’s not just transport that uses oil. The petrochemical companies use it to make plastics, for instance. Indirectly but pretty importantly tourism is a big current user, too.
But the bottom line is that these are all fossil fuels. It’s not just that we may or may not have reached peak oil, we always knew that would happen. Nor is it that our governments are concerned about price hits and may do something silly like cut excise on the damned stuff. These are all climate-changing fuels. If we keep consuming and pumping carbon dioxide into the atmosphere we will dramatically alter our climate and wreak havoc all around – if we haven’t already done so.
Let’s not quibble about the economic effects of peak oil, let’s look at the bigger picture of our global addiction to cars, and probably air travel as well. Just making cars consumes energy resources, covers arable land in concrete and tar, and adds to the overall carbon problem – without even driving the damned things. We need to wake up and have a really good think about what we want here. And ask what’s sustainable. And price our resource use not just on what they cost to extract plus a margin, but on what they cost in terms of all effects, including climate change and biosphere damage. Unfortunately we are so dependent on selling complex manufactured goods, and cars are such a good employer of people and such a wonderful empowerer, that we all want one. (Indeed I guiltily have 3.)
But is there enough planet to go around?