Dec 02, 2014
Remember "Peak Oil?" The world was running out of oil, we were told: Prices would soon skyrocket, and we had better find other fuels.
Well, that argument didn't work out so well for environmentalists, did it? As oil reserves and those of other carbon fuels became scarce and prices rose, the law of supply and demand kicked in. The industry invested the profits from those higher prices in new technologies, and the oil barons found even more destructive ways to extract oil and gas--by exploiting the muck from tar sands, inventing hydro-fracking, and despoiling sources in developing countries.
So now, oil is cheaper than it's been in years, about $66 a barrel. Regular unleaded gasoline can be had for well under $3 a gallon.
One of the few things sustaining U.S. consumer purchasing power in the face of dismal wages is close to $100 billion saved in energy costs. OPEC's pricing power has been broken, and the United States is about to surpass Saudi Arabia as the world's largest oil producer.
Whoopee, energy self-sufficiency! Take that, enviro-pessimists.
World daily oil production has surged, from about 75 million barrels in 1999--when peak oil predictions were popular--to more than 90 million barrels today. Estimated reserves keep increasing, as well.
Conservative economists like to crow that projections based on current technologies are invariably too pessimistic.
Conservative economists like to crow that projections based on current technologies are invariably too pessimisticIn 1990, environmentalist Paul Ehrlich lost a famous bet with economist Julian L. Simon, on whether prices of five rare commodities would rise or fall over a decade. Simon was right that high prices and technology would create substitutes, and prices duly fell.
By the same token, technology has allowed more sophisticated exploration of carbon fuels, and falling energy prices. All of which totally misses the larger point, namely that the market can't competently price the environment.
Cheap oil, of course, is a curse. It promotes increased use of carbon fuels at a time when we should be investing massively in substitutes. And the apparent plenty of oil and gas takes the spine out of most politicians.
The smart money thinks it's only a matter of time before President Obama (speaking of spine) caves on the Keystone Pipeline. After all, if Canada doesn't pump all that crud in our direction, the Chinese are happy to take it. And there are those tens of thousands of jobs for the Gulf coast. They might as well go to Americans, right?
It's true that a blowout of the pipeline somewhere along the route would be catastrophic, just as it's true that the pipeline symbolizes everything wrong with the current energy path. But we could block that pipeline and still face catastrophic climate change.
Obama, to his credit, did belatedly allow the Environmental Protection Agency to tighten standards on health-destroying smog (ground-level ozone)--more than three years after the White House killed similar proposed regulations--in a craven suck-up to business after the Democrats' 2010 mid-term defeat. Still the new ozone regs are but a baby step.
The fact is that markets price energy wrongly. They price oil and gas based on current demand and supply, and not based on the costs to the planet in pollution, global climate change, sea level rise, and more. This is, as Lord Nicholas Stern famously put it, history's greatest case of market failure.
Recent events demonstrate the sheer radicalism of the necessary cure. Business as usual is just too convenient, too easy, and incremental change will not save the planet.
Sure, oil production will peak at some point. But by then the earth could be a very unpleasant place. Sorry, folks, but the argument that we are running out of oil just doesn't cut it. If only things were that simple.
Join Us: News for people demanding a better world
Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place. We're hundreds of thousands strong, but every single supporter makes the difference. Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. |
© 2023 The American Prospect
Robert Kuttner
Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe and Huffington Post. He is the author of Everything for Sale: The Virtues and Limits of Markets, The Stakes: 2020 and the Survival of American Democracy, and his newest Going Big: FDR's Legacy and Biden's New Deal.
Remember "Peak Oil?" The world was running out of oil, we were told: Prices would soon skyrocket, and we had better find other fuels.
Well, that argument didn't work out so well for environmentalists, did it? As oil reserves and those of other carbon fuels became scarce and prices rose, the law of supply and demand kicked in. The industry invested the profits from those higher prices in new technologies, and the oil barons found even more destructive ways to extract oil and gas--by exploiting the muck from tar sands, inventing hydro-fracking, and despoiling sources in developing countries.
So now, oil is cheaper than it's been in years, about $66 a barrel. Regular unleaded gasoline can be had for well under $3 a gallon.
One of the few things sustaining U.S. consumer purchasing power in the face of dismal wages is close to $100 billion saved in energy costs. OPEC's pricing power has been broken, and the United States is about to surpass Saudi Arabia as the world's largest oil producer.
Whoopee, energy self-sufficiency! Take that, enviro-pessimists.
World daily oil production has surged, from about 75 million barrels in 1999--when peak oil predictions were popular--to more than 90 million barrels today. Estimated reserves keep increasing, as well.
Conservative economists like to crow that projections based on current technologies are invariably too pessimistic.
Conservative economists like to crow that projections based on current technologies are invariably too pessimisticIn 1990, environmentalist Paul Ehrlich lost a famous bet with economist Julian L. Simon, on whether prices of five rare commodities would rise or fall over a decade. Simon was right that high prices and technology would create substitutes, and prices duly fell.
By the same token, technology has allowed more sophisticated exploration of carbon fuels, and falling energy prices. All of which totally misses the larger point, namely that the market can't competently price the environment.
Cheap oil, of course, is a curse. It promotes increased use of carbon fuels at a time when we should be investing massively in substitutes. And the apparent plenty of oil and gas takes the spine out of most politicians.
The smart money thinks it's only a matter of time before President Obama (speaking of spine) caves on the Keystone Pipeline. After all, if Canada doesn't pump all that crud in our direction, the Chinese are happy to take it. And there are those tens of thousands of jobs for the Gulf coast. They might as well go to Americans, right?
It's true that a blowout of the pipeline somewhere along the route would be catastrophic, just as it's true that the pipeline symbolizes everything wrong with the current energy path. But we could block that pipeline and still face catastrophic climate change.
Obama, to his credit, did belatedly allow the Environmental Protection Agency to tighten standards on health-destroying smog (ground-level ozone)--more than three years after the White House killed similar proposed regulations--in a craven suck-up to business after the Democrats' 2010 mid-term defeat. Still the new ozone regs are but a baby step.
The fact is that markets price energy wrongly. They price oil and gas based on current demand and supply, and not based on the costs to the planet in pollution, global climate change, sea level rise, and more. This is, as Lord Nicholas Stern famously put it, history's greatest case of market failure.
Recent events demonstrate the sheer radicalism of the necessary cure. Business as usual is just too convenient, too easy, and incremental change will not save the planet.
Sure, oil production will peak at some point. But by then the earth could be a very unpleasant place. Sorry, folks, but the argument that we are running out of oil just doesn't cut it. If only things were that simple.
Robert Kuttner
Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe and Huffington Post. He is the author of Everything for Sale: The Virtues and Limits of Markets, The Stakes: 2020 and the Survival of American Democracy, and his newest Going Big: FDR's Legacy and Biden's New Deal.
Remember "Peak Oil?" The world was running out of oil, we were told: Prices would soon skyrocket, and we had better find other fuels.
Well, that argument didn't work out so well for environmentalists, did it? As oil reserves and those of other carbon fuels became scarce and prices rose, the law of supply and demand kicked in. The industry invested the profits from those higher prices in new technologies, and the oil barons found even more destructive ways to extract oil and gas--by exploiting the muck from tar sands, inventing hydro-fracking, and despoiling sources in developing countries.
So now, oil is cheaper than it's been in years, about $66 a barrel. Regular unleaded gasoline can be had for well under $3 a gallon.
One of the few things sustaining U.S. consumer purchasing power in the face of dismal wages is close to $100 billion saved in energy costs. OPEC's pricing power has been broken, and the United States is about to surpass Saudi Arabia as the world's largest oil producer.
Whoopee, energy self-sufficiency! Take that, enviro-pessimists.
World daily oil production has surged, from about 75 million barrels in 1999--when peak oil predictions were popular--to more than 90 million barrels today. Estimated reserves keep increasing, as well.
Conservative economists like to crow that projections based on current technologies are invariably too pessimistic.
Conservative economists like to crow that projections based on current technologies are invariably too pessimisticIn 1990, environmentalist Paul Ehrlich lost a famous bet with economist Julian L. Simon, on whether prices of five rare commodities would rise or fall over a decade. Simon was right that high prices and technology would create substitutes, and prices duly fell.
By the same token, technology has allowed more sophisticated exploration of carbon fuels, and falling energy prices. All of which totally misses the larger point, namely that the market can't competently price the environment.
Cheap oil, of course, is a curse. It promotes increased use of carbon fuels at a time when we should be investing massively in substitutes. And the apparent plenty of oil and gas takes the spine out of most politicians.
The smart money thinks it's only a matter of time before President Obama (speaking of spine) caves on the Keystone Pipeline. After all, if Canada doesn't pump all that crud in our direction, the Chinese are happy to take it. And there are those tens of thousands of jobs for the Gulf coast. They might as well go to Americans, right?
It's true that a blowout of the pipeline somewhere along the route would be catastrophic, just as it's true that the pipeline symbolizes everything wrong with the current energy path. But we could block that pipeline and still face catastrophic climate change.
Obama, to his credit, did belatedly allow the Environmental Protection Agency to tighten standards on health-destroying smog (ground-level ozone)--more than three years after the White House killed similar proposed regulations--in a craven suck-up to business after the Democrats' 2010 mid-term defeat. Still the new ozone regs are but a baby step.
The fact is that markets price energy wrongly. They price oil and gas based on current demand and supply, and not based on the costs to the planet in pollution, global climate change, sea level rise, and more. This is, as Lord Nicholas Stern famously put it, history's greatest case of market failure.
Recent events demonstrate the sheer radicalism of the necessary cure. Business as usual is just too convenient, too easy, and incremental change will not save the planet.
Sure, oil production will peak at some point. But by then the earth could be a very unpleasant place. Sorry, folks, but the argument that we are running out of oil just doesn't cut it. If only things were that simple.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.