Sunday, December 20, 2009

Denial, conspiracy, and the state of the environment

(I just can't figure out where all the oil is going.)

We have all done it. We want to blame someone for nearly everything bad that happens to us. In the case of oil prices, there are several likely suspects. Exxon-Mobil is making huge profits, speculators are driving the price up because of their trading in oil futures, there is too much oil in the U.S. Strategic Petroleum Reserve, and China is hoarding oil.

In fact, a CNBC poll last year during the peak of gasoline prices showed that respondents believed that only 15% of our oil problem was due to consumers; the remaining 85% believed it was due to speculators, OPEC, President Bush, Congress, or big oil companies. It could not possibly be the case that demand exceeds supply, because that would mean that they, or we, or I am using too much oil. If we are using more than can be produced, that might mean that economic growth has a limit of some kind, and that is nothing we have ever had to contemplate.

In fact, we still reject the notion that there is a limit to growth, because, if true, it would adversely affect all types of measures of our “quality of life”: the creation of new jobs, the increase in the value of my stock portfolio, the nation’s GDP, same-store sales this year over last year, and so on. We reject this unpleasant scenario and replace that specter with an attempt to find out who is doing this to us. Once we identify the criminals, we can alert our government who will punish the offenders or pass new legislation and, thereby, fix the problem, or so the thinking goes.

On the other hand, that same week I heard three “experts” on financial markets, all of whom I have come to respect over the past 8 years, come down on the side of basic supply and demand as the fundamental cause of high oil prices---Warren Buffet, Jim Cramer, and Boone Pickens. Pickens, the legendary oil man from Texas, actually said that the world can produce 85 million barrels of oil per day at present, but the global demand is currently 87 million barrels per day. And the International Energy Agency report released earlier that week estimated that by 2030 we will be able to retrieve about 100 million barrels of oil from the ground per day, but the demand then will be about 116 million barrels per day. If the latter number is greater than the former, then there will be demand pressure on the price of oil. Of course, this is not to say that speculation has nothing to do with the exact price of oil at any given moment, but as the adage goes: “Speculation gets the price of a commodity to where it was going anyway, only faster.”

I hear this same conspiratorial sentiment when discussing global climate change with the man in the street. It is all a scam perpetrated by ivory tower scientists and left-wing liberals like Al Gore and weirdo environmentalists. Someone is lying to us because THEY want US to behave differently, so THEY can benefit from our changed behavior. THEY are making up this grand story so THEY can become rich and famous. If THEY were correct that humans are causing climate change and this change is going to be bad for us, then WE would have to do with less, WE might have to curb our growth as a society, WE would have to drive less or drive smaller cars, or WE would have to turn off the lights frequently. THEY are doing something to US!

It should be obvious at this point in this little tirade that I believe as Pogo stated several decades ago: “We have met the enemy and he is us.” There is really no one else to blame for this state of affairs but us: our individual consumption and, likewise, the collective consumption and waste of a huge and growing human population currently numbered at nearly 7 billion. Remember that there is a net annual increase in the human population of about 80 million people per year; a decade ago, the net increase was about 100 million people per year. Currently, that means that every year there are about 100 million new people reaching driving age, regardless of what the driving age is in the country in which they reside. Now, most of those people will probably never drive a car, but I think you get the idea. It is tough to increase the supply of oil, or to reduce the effects of anthropogenic climate change, when the demand is increasing inexorably.

Supplies and prices of commodities or other necessities of life will not be resolved easily or quickly. And neither will global environmental problems like climate change or conservation of biodiversity. But I continue to believe that no problem is likely to be solved unless we understand the true cause. Pogo was a wise opossum.

(For a thoughtful essay on economic growth and population growth by Steve Kurtz, click on the title of this blog to find Growth: Salvation, addiction and cessation.)


  1. Good posting. Interesting, even you re old. you still can still doing what the other young man do. Writing and share idea.

    Im still research what cause oil price rising. I think, mostly on american war on Iraq and Afghanistan, The last time Gulf war, Saudi Arabia sponser USD 40 Billion to US army. On 2003 Iraq and Afghan invasion, Saudi can't afford on that such big amount. The amount is around USD 945 billion. That why President Bush repeatly said at U.N, we will recover the loses by taking Iraq oil. The national debt rising to USD 1 Trillion. highest rising ever.

    This all about political and their ambition.

  2. Great Sales: thanks for your thoughts. I may be old, but I'm feisty.