I don’t think there are many must-reads in US MSM these days, but this piece yesterday is it. Finally, we’re getting sensible journalism questioning the Obama administration’s rush to claim the patient (the US Economy) is out of ICU. It’s not.
Op-Ed Contributors – The Economy Is Still at the Brink – NYTimes.com.
Long Wave Theory has been saying this for months. What everyone is fixated on is the short term, hoping the stimulus plan will stop us from going off a cliff. Except long term, we’re doing more damage to our society. This is a depressing scenario, but I think until we get real policy change, this bleak forecast is all too likely.
I was watching CNBC the other morning and they had Dr. Robert Hirsch who is a very respected senior energy analyst with a very impressive resume spanning decades of consulting, corporate, and government energy policy positions http://en.wikipedia.org/wiki/Robert_L._Hirsch. His experience at places like SAIC, The RAND Corporation, and big oil companies have given him true credentials in the energy policy field.
His discussion with the host of Squawk Box was eye-opening. Finding Alternatives 2 hrs ago
These days he is one of the foremost authorities on the question of Peak Oil. Peak Oil is the thesis that at some point the world’s geological reserves of oil and gas will plateau and then enter a long period of decline. Despite the attempts by some (declining) declining number of oil companies, the thesis is well regarded as scientific fact. Oil, for example, is a finite natural resource. The scariest aspect of Peak Oil, is that when it becomes commonly accepted by the mainstream media, governments, OPEC, the EIA, and other leaders in the energy field, a massive wave of psyschological panic will ensue. Why? Because our global transportation infrastructure is so dependent on oil and petroleum based products, that to shift the base of capital equipment to other technologies will be massively disruptive.
If you want to get the real deal on this, Dr. Hirsch recently gave a presentation at a Nanotechnology conference in Boston. His slides can be viewed here http://www.csievents.org/Cleantech2008/pdf/72026.pdf
Here is another resource for media coverage of Peak Oil:
http://www.jordomedia.com/RSS/l_op=viewrss/lid=181625.html
The bottom line is if we don’t get our act together fast, the economic consequences of Peak Oil are going to make the Great Depression of the 1930s seem like a day at the beach. For those of you who might be thinking this is somewhat of an alarmist statement and think we’ve been here before with the two oil shocks of 1973 and 1979, you need to take a hard look at the causes and effects of those events. First, the 1973 oil crisis was a direct result of the Arab-Israeli War. The effect of the oil embargo was unemployment, inflation, rationing, oil shortages, and GDP decline. Like 1973,the 1979 oil shock was caused by political conflict–this time the fall of the Shah of Iran and the assumption of power by Islamic Revolutionaries. Again, the effect on the US economy was similar in both the duration and nature of the problem.
With Peak Oil we will not be so lucky. Peak Oil will signify the beginning of a decline in oil availability at a time when consumption will be increasing. And Peak Oil is not a temporary shock to the system.
Nobody likes to see the recent spike in oil. It conjures up memories of the 1970s, gas lines, stagflation, and reactionary politics (like mandating 55 mph speed limits). But what if $150 a barrel oil was a good thing? What if $4.00 per gallon gas is the tipping point at which private industry gets off its collective asses and realizes we need a viable longterm solution to our dependency on oil–foreign OR domestic. Oil is a finite resource, it is environmentally irresponsible to continue to explore, drill, refine, transport, dispense, and combust it. It creates a geo-political chess game with potentially catastrophic outcomes should things turn south. Society needs technology that frees us from the dependency on oil. It’s only been a part of civilization since 1857. Depending on whom you believe there’s a good chance that by it’s 200th anniversary it may be entirely depleted. Regardless, we know there is a day when oil cannot sustain the planet’s appetite and need for motorized transportation. We need something else and corn-alcohol based fuels are not the answer. Buying cars with 10% more gas efficiency is not the answer.
Maybe $4.00 a gallon gas will spur innovation and investment in something that actually can sustain us. I say bring on $5.00 a gallon…our friends across the pond are paying $10!
Hydrogen, solar, battery…there are plenty of great technologies out there, maybe with the right economics we’ll finally have real movement toward a sustainable transportation paradigm.