Fuel Price Morons

Every day now, my timeline is filled with howls of rage from both sides of the Atlantic about the high cost of gas/petrol. There are some local differences: US screams tend to be louder, reflecting their greater exposure to crude oil prices, and they tend to blame Obama for the global price rises, believing (incorrectly) that more drilling at home will fix the problem (search for the #DrillHereDrillNow Twitter hashtag to see some real-time stupidity). British morons are generally more aware of the global nature of oil pricing, so instead they turn their rage on government-imposed fuel duties. Both sides miss the key points: that rising global oil prices are outside the control of any individual or nation; that more US-based drilling will at best slow down the rise while wrecking the environment; that addiction to oil won’t be cured by further addiction; and that Europe has actually avoided the worst of oil addiction by imposing high fuel duty (although our price-per-gallon is much higher, our overall spend on fuel isn’t because we use less).

I used to love driving; I loved my car, and drove it as stupidly as a typical 19 year old wannabe racing driver could do. Then, I found a great job – the only downside being that I had a minimum 80 miles per day commute (much more if I had meetings outside the office). The cost wasn’t an issue for me; my employment package included a company car and fully-expensed fuel; but my minimum of 2.5 hours a day in the car soon started eating away at my enjoyment of driving. Despite the fact that most of my commute was on motorways with a speed limit of 70mph, my average speed was around 25mph, and lower if there had been a serious accident.

Day after day, I sat on the M25 (London’s massive ring road, often referred to as “The World’s Biggest Car Park” and subject of the Chris Rea song, Road To Hell), and pondered the wisdom of Britain’s long-term shift from rail to road. I was surrounded by thousands of other people, mostly sitting alone in their own metal boxes, all facing in the same direction, all burning fuel in their own personal engines, and moving very, very slowly.

It slowly became obvious to me that this wasn’t sustainable, either for me personally or for the country. However many lanes were added to the M25, the traffic never sped up significantly – more cars simply arrived to fill the new space. Car ownership and mileage were growing constantly. People were abandoning urban life for the suburban dream. It was clearly impossible to fit cars into a human-sized town or city; the space has to expand to cater for all the cars, whether moving or parked. Car addicts were being offered American-style shopping malls in the middle of nowhere, and town centres were beginning to wither and die as commercial places. And this was long before I first heard about Peak Oil – the (in hindsight) obvious idea that if we keep using more fuel, one day we won’t be able to get it out of the ground quickly enough to serve demand.

My long hours spent behind the wheel took their toll, and I developed back problems and asthma. I grew to hate the car, and became jealous of people who didn’t have to drive to work. Changing to a job where I had to buy my own car made the problem worse. Eventually I moved to a London-based job, sold my car, bought a new bicycle and moved home close to good public transport. On a conservative estimate, I saved £5,000 ($8,000 at today’s rate) a year, my weight fell, my health improved and so did my quality of life.

After 9/11, Osama bin Laden was very clear about his strategy to undermine American power in the Middle East: provoke US revenge attacks, create instability and drive oil prices up to $200 a barrel, thus destroying America’s oil-addicted economy. The 2000 Bush election win had been an effective coup for the oil industry; in the 2003 invasion of Iraq, Bush and the neocons did what bin Laden had invited them to do, and the seeds were sown for a disastrous end-game of rising demand and unstable supply.

The oil industry is doing what it needs to do: convince us to keep using its product. It does so by lying about the risks of our continued addiction, by denying that peak oil is near, by overstating oil reserves, and by continually lobbying against any new energy source or form of transport that may threaten sales. In 2000, it even installed its own oil-friendly regime in the White House in order to preserve its revenues for another eight years. A Saudi oil minister, aware of the threat to his nation’s future if the world turned its back on oil, is quoted as saying: “The Stone Age didn’t end for lack of stone, and the oil age will end long before the world runs out of oil.”

Smart individuals can act in their own interests – primarily by abandoning car-based, suburban living. We need to appreciate that destroying more nature for a little more oil won’t change anything; and Europeans should understand that high fuel duty is what has saved us from an even worse disaster to come as oil prices keep rising. We’re driving ourselves fast towards a cliff. We need to stop moaning and start steering.

Nationally and internationally, change is much harder to execute; America in particular is so far down the route of de-urbanisation that it would take decades of concerted leadership to move society back to a high-density, low-energy style of living. And while the oil industry retains its political power, and pumps its anti-peak-oil, anti-climate-change propaganda via outlets like Fox News, this can’t even begin to happen.

Those morons who continue to ignore the obvious deserve their looming fate: suburbia and exurbia will become the new ghettos and ghost towns as their oil-based lifelines to civilisation shrivel away. They can tweet their hatred of Obama forever, but it’s the oil industry, its conservative friends, and our blind acceptance of their lies, that got us to this point.

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.