The Environment be Damned, I want Cheap Oil

With the conservatives banging the green drum in an effort to call bearded liberals (of which I am one, including the beard for anyone who hasn’t seen me in a while) to their banner it’s surely time to take a long hard look at The Environment issue. Frankly I think that the campaign for environmental change needs to take a step back and reframe the whole issue. It’s not Global Warming, which too many people either don’t believe in or are powerless to effect or are apathetic about, that we need to look at but scarcity because that will hit us in the pocket long before the ice melts.

I use energy. You use energy. Our entire Western civilisation is founded firmly on the use of energy. We heat and cool our homes with it. We run our businesses with it. We transport ourselves around using it. We make our crops, harvest and distribute them using it. Without energy we are quite firmly fucked.

Let me just frighten you with some statistics: In the US, which has one of the most efficient agriculture systems, it takes thirteen gallons of fuel to produce one ton of wheat. Taking into account farm machinery, the oil used in the production and distribution of fertilizer and transportation costs and you get closer to 20 gallons which is about the amount of gas you get out of a 42 gallon barrel of crude oil. That’s right, the raw energy cost of a ton of wheat is about one barrel of oil.

We of course have a commodity market for things like food, we are dependant on food coming from all over the world and that transportation is built on the assumption that there is cheap energy avaialble to do all of this transportation.

A barrel of light crude is around $70 at the moment but this price is already artificially low; oil companies are given tax concessions to off-set their exploration and discovery costs or the US’s insane “Oil Depletion Allowance” and the military might required to ensure the safe transportation of oil nor securing the areas from which it is pumped is not taken into account. Neither are the health care costs associated with increased instances of asthma or emphysema included. Neither are the costs of dealing with any future environmental impact included.

When Peak Oil will occur is a matter of some debate. In the US oil production peaked in 1970. In the North Sea production peaked in 2000. Indeed all but eight oil producing countries have already past their peak production of oil and are able to pump less and less each year. Two others, Canada and Kazahkstan are only pre-peak assuming their plans for production from oil shale go well for the former and the latter is only beginning to develope it’s resource. The two big pre-peak players are Saudi Arabia and Russia. Saudia Arabia actually produces a million barrels a day less than it did in 1980 though it claims it could produce more, however it’s major oil fields are over half empty and new discoveries do not fully off-set the amount it now pumps, if the peak has not yet occured here it will soon.

So we can conclude that peak production will occur soon, within a decade at most and more likely sooner, but our demand for it is insatiable. Currently we use about 84 million barrels, if the increase in use continues at the same rate we’ll need 120 million barrels by 2030 which means we need another four Saudi-Arabia-worths coming on stream. It’s not possible. Next take into account the booming Chinese and Indian economies, if their populations were to achieve a western level of civilisation (and therefore a western per-head energy consumption) that figure will be even higher, this is a process that is under way.

The future, and it is not even long term – it’s coming soon will see us competeing for a very scarce commodity and the price will rise and rise sharply. Are we living in an economy that can handle that without collapsing?

Here’s why we need to reframe this issue: if we don’t get energy efficient in every way from reducing transport use to reducing food miles to reducing waste (supermarkets throw out about 40% of their fresh fruit and vegetables in this country) then our civilisation will cease to be affordable. Forget the seas rising or the skies burning, the price of a meal will cost you a weeks work if you don’t get this sorted out. The real reason for the reframe is that we can already see the edges of this happening, oil prices are creeping up and this is the beginning of a trend that will continue and accelerate, we’ll begin to really feel it in the pocket soon and the action we need to take is the same action as broader environmental action requires: reduce energy use, reduce waste. It’s just easier to understand and feel the effects than stories about disappearing polar bears or ice caps.

Incidentally, the Torys haven’t convinced me to vote for them, they still don’t really grasp the importance of this issue. It’s not important because it’s a fashionable issue for the middle classes to be concerned about, and therefore vote about, it’s important because our civilisation is under threat.

Further reading: Plan B 2.0 by Lester R. Brown