CHEAP OIL, POST-EASY OIL, AND DEMAND DESTRUCTION

Cheap oil has passed, never to return. Lots of oil is locked up in oil shale, true, but it is exceedingly expensive to extract and refine. The production costs of oil shale and Canadian tar sands are such that energy-industry corporations understand that it would probably cost more energy to extract and refine those two sources than the energy produced. The only way they will ever be (theoretically) profitable to use those two sources would be when the price of energy is so high it might pay to develop them. Yet, "demand destruction" would also ensue: Demand nosedives because of the high price.

Same with future production of "plentiful" reserves of oil: There are huge amounts left that will never be used because of the price of extraction and refining. There will be all the oil we ever care to use at a price that will increasingly negate our use of it--demand destruction, again. That day will come soon, or so say many oil economists.

What you label as "environmentalists" are resource scientists, marine and conservation biologists, State tourism officials, the fishing industry, and State and local leaders who want to preserve biodiversity, marine habitat, fish stocks, local tourism, public health and a clean environment. Take a look at the preservation of the California Channel Islands and the myriad forces who were all for preserving the islands and surrounding habitat. It has never been only about "environmentalists."

Let me ask you a question. When an "American" oil corporation takes out a lease for future oil exploration and develops it--to whom must it market? If I obtain a fishing license from Mississippi (like an oil lease), and catch a fish (like extracting oil)--to whom do I sell my catch? It is a global market that the oil corporations market to; none of the oil is reserved for the U.S. market. It is a global market, not a dedicated one. (And, I sell my "American" fish to the highest bidder.)

The easy oil reserves are no more and the U.S. demands way too much for our economic viability. If you read Forbes, it marshals data recently that say lots of oil reserves remain in the U.S. True, as I said above; but those recent, extremely short articles and the data they use are oversimplifications which include oil shales and reserves on the outer continental shelf and even deeper waters that probably will never be extracted, not because of environmentalists, but because of economics.

Cheap oil is no more; and sufficient alternative-energy sources are probably many, very uncomfortable, years away. In the meantime we are sleepwalking through a hallucinated petroleum-based economy in which Nature will increasingly bite our butts in a deadly combination of destructions: environmental, resource, demand, economic, and social. Can psychological be far behind?

I have said that the rampages of global late-capitalism is a like a disease. More accurately it is not so much an "-ism" (or a disease) as it is a set of practices that, of course, has as its (unthinking) basis the making of profit no matter the environmental consequences. Disease, instead, is confined to social forms, cultural beliefs, economic practices, and human lifestyles which are non-sustainable. Surely, this does not require being 'liberal" or "conservative." Not when it is a matter of life and death.

The (mental) disease, then, is not knowing how to survive on a long-term basis. For that we can look to past civilizations, none of whom we can ask directly what they did wrong. Always, though, it probably was a matter of energetics: They depleted their energy sources (including food) without prescient and timely adjustments to their lifeways.

If we are counting on oil from the near (or even outer) continental shelf, then there is serious concern about the future of civilization as we know it now.

SCAPEGOATING FOR OIL

As you take respite from reading the latest conspiracy theory about the cause of high gasoline prices, you might consider these facts:
1. The U.S. is still the third-largest oil producer in the world. The U.S, or rather the private oil companies operating within the territory of the U.S., produces 8.37 million barrels per day. For comparison, Saudi Arabia, the top producer, pumps 10.72 mb/d. (Russia is between the two.)

2. Gasoline prices in the U.S. are still about one-third lower than Canada's (at $6) and less than half Europe's (at up to $11).

3. An "American" oil company sells oil--a highly fungible commodity--on the world market at WORLD PRICES.

4. Global demand for oil is accelerating with the overheated economic growth of especially China and India and other emerging economies. This puts upward pressure on oil supplies (and prices).

5. We are in an era of "post-easy" oil. Much of the remaining reserves lie in technologically demanding fields. In addition, national oil companies around the world are holding the easy fields for themselves, increasingly pushing private companies into the technically challenging fields. Other factors coming into play are that the private companies are having to work in more off-shore fields and in politically and environmentally difficult areas. And another factor: More of the oil is heavier crude, which is more expensive to refine. In short, most of the remaining reserves will be expensive to produce.

Observations: 1. I do not understand the reasoning by some people who say that oil from Alaska would undercut and thus lower oil prices in the U.S. This is not a situation of two corner grocery stores competing to undercut the price of each other's salami sandwiches. Again, oil is a fungible GLOBAL commodity sold on a GLOBAL market. Unless American oil companies are nationalized (like in Mexico and Venezuela and other countries), then it is not "American" oil and the oil companies decide for themselves what to do with it. Which means the oil is marketed to the highest bidder at the highest price.

2. Americans are still ignoring that we are as profligate as a teen at the local mall with $20 in his pocket. Or, perhaps more relatedly: As profligate as a DC pimp after the oil corporation lobbyists have convened.

What do you drive? What is your diet?

Fact: Raising the average mile-per-gallon of the American fleet by 10 mpg would save 4 million barrels per day. That's almost one half of current U.S. production. Observation: It would not be difficult to do, if we stop looking for scapegoats and push our politicians into passing the requisite legislation. For example, within a fairly short time, say two years, we could have every new automobile sold in America running a hybrid engine. Subsidy programs could take the older autos off the streets. We could conserve a huge heap of oil.

Ladies and gentlemen: If you are truly interested in actually solving an extremely serious problem (that relates to several important others), let's ignore the side issues and lower our energy consumption. Fuel efficiency is one of the big answers. We CAN do it. Not just on an individual level, but as a SOCIETY, with our citizens leading the way to require PUBLIC POLICIES (yes, this means political action) that are rational.

Save the goat and contact a politician.