On Oil

Hubbert Peak Theory
Hubbert Peak Theory (image via Wikipedia)

A while ago, George wrote about the new fees for flying. Lacey pointed out how the price of oil affects the cost of running an airline. Thoughts about these have been lurking in my head ever since. Today I have watched a couple times a speech given by Congressman Roscoe Bartlett on how oil production is about to peak. The transcript helped the second time through. (Wikipedia on Hubbert Peak Theory) I also watched A Crude Awakening: The Oil Crash on Netflix’s Watch Instantly.

Bartlett quoted Thomas Friedman:

Our problem is so much worse than you think. We have no energy strategy. If you are going to use tax policy to shape energy strategy, then you want to raise taxes on the things that you want to discourage — gasoline consumption and gas-guzzling cars — and you want to lower taxes on the things you want to encourage — new renewable energy technologies. We are doing just the opposite.

(Bolded for emphasis; even though italics is emphasis.)

While this may not be a strategy, Bartlett does not point out keeping our economy in a positive growth direction has been the emphasis for the past 30 years. Cheap oil keeps factories running, keeps transportation moving, and forms the basis of our plastic-based society. Without cheap oil, we could not maintain the wonderful society we have today.

In Europe, they discourage the use of oil by much high taxes on it. The cost of this approach is we would almost certainly also enter into a recession for some time. Would it be the end of the world? No.

I don’t think our leaders completely ignored the problem as Bartlett suggests. They gambled on the choice technology would make alternatives cheaper by now and conservation would bridge the gap. They wanted their party to remain in power, so they would not have Instituted policy which would cause voters short-term pain with long-term benefits (despite the long-term benefits once through the pain).

That may be the kind of leader we need, but I would be surprised for such a person to get elected President of the United States.

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