Oil And Morons

Oil: wherever you find it, you’ll find morons. And wherever there are morons, there are people talking crap about oil.

The History Of Oil In One Short Paragraph

In the Middle East, so much oil was lying on the surface that people have been using it in small quantities for centuries. And when in England the industrial revolution was born, coal became popular, and shipping converted from wind to coal. But some bright spark realised that oil was a more useful shipping fuel, and when WW1 broke out in 1914, the British converted the naval fleet to oil; the only problem being that there were no known oil supplies in Britain. So the jolly old Brits occupied (what are now) Iraq, Iran and other Middle Eastern places in order to secure an oil supply. Later, as the British Empire collapsed, the US Empire moved in to replace it. The world’s biggest oil producer, Saudi Arabia, was denied democracy and put into the hands of limb-chopping Western-friendly morons. And so in 2001, 19 Arabs (of whom 16 were Saudi) flew planes into tall buildings in America… which was used an an excuse to re-invade Iraq, and while the Americans occupied Baghdad, the British occupied Basra which (not coincidentally) they had first done back in 1914. Which brings us more or less to the present day.

Addiction?

It turns out the winner in this game may actually be the loser. Easy availability and low fuel taxes have encouraged Americans to behave as if oil is forever cheap and plentiful. With 5% of the global population, the US consumes about 24% of the oil supply (about 20.6 million barrels per day, of a global total of 85 million). In contrast, European countries have taxed fuel more heavily, with the result that Europeans are far more fuel-efficient. An American uses more than double the oil a German does, and almost 12 times a Chinese person. Of course, that would be fine for Americans if oil supplies were plentiful and cheap forever…

And now here comes a perfect storm. Several things are happening simultaneously that will cause a series of increasing shocks to the oil-dependent economies unless there is intelligent, decisive action to reduce oil addiction.

  1. Oil is becoming harder and more expensive to extract. The easy supplies are already used up.
  2. The Asian, Latin American and African economies are growing much faster than the developed world, and so is their demand for oil.
  3. It may be that oil producers can no longer extract oil fast enough to reach rising demand – this idea is known as Peak Oil. While 1 and 2 above would cause a gradual rise in prices, this one could cause huge, rapid leaps in price. The only question mark is about when this happens.

It’s not as if any of this is secret. Jimmy Carter understood the addiction problem in the 1970s. Obama, in his book The Audacity Of Hope, said:

It is hard to overstate the degree to which our addiction to oil undermines our future. Without any change to energy policy, US demand for oil will jump 40% in 20 years. Over the same period, worldwide demand will jump 30%.

A large portion of the $800 million we spend on foreign oil every day goes to some of the world’s most volatile regimes. And there are the environmental consequences. Just about every scientist outside the White House believes climate change is real.

We cannot drill our way out of the problem. Instead of subsidizing the oil industry, we should end every single tax break the industry currently receives and demand that 1% of the revenues from oil companies with over $1 billion in quarterly profits go toward financing alternative energy research and infrastructure.

Of course, this is easier to write when you’re not President. The oil industry wields real power in the Land Of The Free – probably more than the President does.

Morons In Denial

The oil industry, sensing a threat, denies that peak oil is near. An admission would prompt a rush to invest in green energy, which would limit future oil profits. (Similarly, admission of man-made climate change would lead to a collapse in oil profits which is why it invests so much money in denialist propaganda). From the twisted world view of big oil, a few decades of profits prior to global economic collapse are worth it.

America’s moron politicians, many funded by big oil, repeat the lie. And most Americans, tricked into leaving urban areas for the open spaces of exurbia in previous decades, are addicted to their cars, many facing ruin if the cost of fuel rises substantially. Together, big oil, many politicians and most consumers continue to wish the problem away.

Every small bump in the oil price prompts an eruption of tweets from morons, trying to apportion blame. They blame Obama, China, terrorism. They need to know that the problem is a temporary one and can be fixed. What they can’t accept is that oil prices will rise, and rise and rise, never reaching a stable peak but accelerating, until the world finally invests in sustainable alternatives to oil. Osama bin Laden is recorded as saying that a $200/barrel oil price would wreck America’s economy – his strategy is to provoke US wars, causing instability, costing America money and pushing up oil prices. America under the neo-cons seems to have gone along with this plan.

The oil industry, of course, says that the solution is to drill more. Moron politicians, led by Sarah “Drill, Baby, Drill” Palin take up the cry. And morons, desperate for a solution that doesn’t involve them reducing their fuel usage, scream at Obama to do so. More drilling can only postpone finding a solution, leading to an even greater crash when domestic oil fails to meet demand.

Moronic “just keep burning oil” messages can be seen on blogs such as Fausty’s. In one amusing post, he trumpets a “fall” in the oil price, posting a graph that shows the price of Brent Crude dropping from $97.6 to $97.2 (that’s a fall?!). Morons like this attribute every rise to “speculation” and every fall to “common sense”. Judging from the continual rise, there must be a lot more speculation than common sense… see this chart for the long-term trend.

And Now?

America needs a huge plan of re-urbanisation (cities are far more fuel-efficient places than suburbs and exurbs). But that would require political consensus, which would require that moron politicians (primarily but not exclusively Republicans) stop taking oil money and turn their back on the oil industry’s lies. It would also hurt the war industry, who would much rather spend $1 trillion on a war for Iran’s oil than spend $1 trillion on becoming the world leader in renewable energy. Will America make the change in time? Maybe, but not without removing corporate power from government. Perhaps it’s already too late for America to avoid an oil-price-induced depression. In that case, all the rest of the world can do is try to insulate themselves from America’s coming oil crash.

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