With oil prices, as I write this, comfortably above 60 USD a barrel it seems an appropriate time to discuss man’s wanton destruction of his own planet.
High oil prices are not simply a function of diminishing supply; there are admittedly a multitude of factors. First of all is the weakness of the US Dollar itself. America’s flagrant inflationist policies, which have unleashed an unprecedented flood of cash into the global money markets, has lead to a direct increase in all commodity pricing – gold, copper, platinum, silver and of course oil. Put simply, those involved in the extraction of natural resources are unwilling to accept that their efforts should be rewarded with a currency that has no backing whatsoever and zero protection from the perils of the Federal printing press.
Secondly, hedge funds awash in the aforementioned liquidity have chosen Black Gold as their current speculative play of choice and “hot money” has poured into oil futures. This kind of speculation has the ability to create pricing extremes in a very short space of time. That said, the speculators have good reason to believe that their bets will be rewarded – the truth is we are running out of oil. We are not however, going to run out of oil tomorrow or even in the next decade. We are a few decades away from actual reserve depletion even if the oil we are now finding is expensive to extract and difficult to refine. You can guarantee that a sharp correction in oil prices lies ahead even if sub-40$ oil is a thing of a past. Plenty of inexperienced or indeed experienced traders will lose their shirts on oil trading. This will partly happen because oil is a self regulating commodity over the short term. If prices spike too quickly demand will wane and prices will contract to reflect the change. Meanwhile, medium term demand will continue to rise, as people adjust to the new pricing brackets, accept them and oil reserves will continue to deplete, leaving us exposed to a massive energy crisis within several generations.
Most scientists agree, if National Geographic is to be believed, that there is no “silver bullet” replacement for oil. There is basically no other substance we are aware of that is as useful for generating energy. Scientists talk in “clusters” or “combinations” – wind plus solar plus nuclear plus hydro and so on.
Ultimately, what is surprising about rising oil prices is the reaction of human nature. It is not that we are using so much oil and crying about the prices we have to pay that surprises but rather that we do not seem to make a connection in our daily lives with prices and electricity usage. The average person talks in terms of prices at the petrol pump and that is the extent of their discussion. People seem either ignorant of, or unable to make the connection between daily electricity usage and oil consumption. The fact is that fossil fuel-powered electricity plants, including oil fired ones make up the majority of our sources of electricity.
It would therefore seem logical to make a change of basic electricity usage habits if one wants lower oil prices. Yet, if you drive through any suburban or city area you are bound to see hundreds of thousands of lights burning each evening for citizens who left their offices or houses hours ago. Our cities radiate with light serving no purpose other than to glorify the mercantile edifices of our corporate giants. Computers, fax machines, water coolers and countless other modern machines remain powered each evening for no useful purpose whatsoever. In our own homes TVs, radios and other modern conveniences continue to drain power each day whilst in standby mode as we are too lazy to turn them off properly; or worse, poor design prevents one from doing so.
This unnecessary drain on our electricity grid accelerates our depletion of fossil fuels and generates excess heat which, surely contributes to global warming.
I am not advocating a luddite solution where we turn our backs on modern appliances and their countless uses; far from it! What can’t be denied is that we are plundering the earth’s resources to maintain our lifestyle while a simple change would slow that process down allowing us time to find cleaner, renewable sources of energy.
If we want to glimpse the future, it is worthwhile to take a look at our past. It is in this analysis that the reading becomes so depressing. Take the example of Easter Island. At its developmental peak, around 1100 AD, the island had 10,000 citizens and was a flourishing civilisation. The island was covered in trees, useful vegetation and vital topsoil. Yet, by 1400 there was not a tree left on the island and it was devoid of life. In the intervening years the Polynesian inhabitants utterly destroyed every single tree and living thing on the island save the grass, for one idiotic reason: they wanted to build bigger statues than their neighbours. The immense resources it took to build the legendary ancestry statues on the islands consumed everything. The tragedy is not ultimately that everything was destroyed but rather the fact that in the final years the islanders knew it was going to happen and did nothing to avoid the complete devastation wrought by their own actions. The folly of their egotistical statue obsession was thrown into relief by the fact that when seafaring Dutch travellers “discovered” the island in 1722, “they mistook its barren hills for dunes”.
Man is destined to use his resources without restraint and without concern that goes beyond kitchen table gossip. When the last oil well has been bled dry and the last coal seam has been mined with our earth a scorched remnant of its current beauty, our descendants will muse that our generation like those before it had the chance and did nothing. We are Easter Islanders obsessed with building bigger statues and nothing more.
