Tuesday, November 08, 2005

Why fuel prices must keep going up

Why fuel prices must keep going up until we hit $2+/litre

Mother nature was ever so kind to leave the products of millions of years of processing biomass sequestered in vast oil reserves all over the world. Pity that we realize too late that this gift is a limited resource that should have been sparingly allocated to be enjoyed over several generations rather than squandered in one. We have now reached that point in the supply and demand curve when, for the first time, oil supply is falling short of demand.. ..and we need to face the fact that we've been wasting a valuable resource that will never ever be cheap again.. ..and never should have been priced so low to begin with.

Oil is and has been the cheapest and most convenient source of fuel for decades. ..concentrated energy just sitting there.. ..add a pump.. ..and a bit of refining capacity and you have low cost fuel able to keep hundreds of millions of us awash in cheap energy.. ..ridiculously cheap energy in fact.. ..and we've had it for so long that we have taken it for granted. Now we are in trouble. The extraordinarily low cost of fuel has spawned all kinds of addictions and habits that will be hard to give up.. ..big cars and SUVs, thousands of Kg each that we drive nonchalantly to the grocery store to pick up milk.. ..or fire up to take us tens of thousands of miles annually back and forth in pursuit of a mobile lifestyle. Aircraft that whisk us off from one place to another. Goods and services from food to VCRs that are cheaply transported from one place in the world to another.. ..all enabled by mother nature's gift of cheap fuel ready to be pumped.

But who ever gave us permission to use all this fuel at our whim? Does it really all belong to us?.. ..a single generation of humans? ..Oh sorry.. ..more precisely, the privileged top 10% of the wealthiest humans of a single generation.. Who ever said that all this oil was ours? ..and who decided to let the price be driven by market forces at a time when supply far outstripped demand? ..and the price reflected the cost of pumping, refining and distributing with virtually no consideration for its intrinsic value.

Did you know that the two jets that plowed into the world trade centre each carried more than 1 ton of fuel/passenger for their aborted transcontinental journeys? Who said that it was okay for a handful of passengers to consume over 1 ton of high grade aviation fuel each for a single trip in less than 1 day? ..more fuel than our ancestors consumed each in a whole year..!

Did you know that the average Canadian consumes over 250 times more fuel per annum than the average 3rd world peasant? Who gave us permission to do that? Incidentally we also consume several hundred times more water and other resources than a third world peasant.. ..and generate several hundred times more waste as well. We may have the dubious distinction of being the biggest pigs in history.

And now what? With our heads deep up our asses, all we can come up with is indignant outrage that the orgy is coming to an end.. ..we will wage war on those that threaten to withhold our next energy fix.. ..and demand of our politicians to keep the party going.. any cost as long as it is not our own.

Alas, not even the cumulative outrage of all of humanity spawned by self righteous indignation and entitlement, and armed with deadly weapons of mass destruction can change the indifferent reality that we are consuming energy beyond the earth's capability to deliver it cheaply. The supply has finally peaked and now the sobering increases in prices will force us to do what we should have been doing all along.. ..treating it with reverence as a precious resource to be used sparingly.

The price of fuel will top $2/litre and stay there. Why? ..because that's what it costs to produce energy in alternative ways.. ..wind, solar, nuclear, biofuels, geothermal.. ..and we need those prices to make it cost effective to generate these alternative forms of energy in large quantities. Had we had greater foresight and wisdom, we may have demanded higher prices sooner so that the adjustment would have been more gradual and more easily accepted.. ..rather than wait for the supply/demand curve to reverse on us suddenly as it has. With even a modicum of common sense, we'll realize that we've been living far beyond our energy means and paying far less than its cost of replacement. The free ride is over and it is time to start taking the necessary measures to reduce our consumption.

John Saringer
Reprinted by Permission

Reminds me of some lines from a song that truly resonates with me (Bright White Light by Adrian Borland)

The sun doesn't shine here
It just signifies the day
We take this life for granted
And we throw this world away
Using up the good things
Until we wonder where they went

Topic: Environment


Joe-in-Texas said...

A 'Generation' - The average span of time between the birth of parents and that of their offspring - let's jut say about 20 years.

Petroleum was discovered in the U.S. in 1853 and expanded in 1859. Petroleum use did not become significant until the invention of the internal combustion engine. But for all practicality - petroleum did not begin to be used in serious quantities until the 1920s in the U.S.

So - it would seem that your statement about 'Pity that we realize too late that this gift is a limited resource that should have been sparingly allocated to be enjoyed over several generations rather than squandered in one. . .' is a bit overstated.

We in the U.S. have used considerable amounts of petroleum products (including plastics, fuels, etc.) for more than five (5) generations - not just one (1).

Now this doesn't make it a whole lot better - but the use of hyperbole in discussing our energy crisis should be avoided.

Cordially - Joe-in-Texas

John Saringer said...


You're absolutely right and I should have been more careful in my wording. I should have said lifetime. In any case, the rise in petroleum consumption has been geometric. The cumulative consumption prior to 1950 is less than what we're using now in a decade.