By Mark A. Goldman
07/05/08 "ICH" -- - These are interesting times. With oil trading above $100/barrel, a larger portion of our national wealth is being spent on the cost of energy.
We are very near or already at what geologists call peak oil. Peak oil is the point at which the maximum rate that oil can be extracted from the earth’s crust can only relentlessly decline from that point forward, due to geological and technological realities. Prior to peak oil it was usually possible to extract as much oil as we needed to meet growing demand while keeping prices relatively low. After peak oil it will be impossible to do that. From now on, oil will become increasingly scarce. The black gold will still be allocated according to price, but as supplies dwindle and prices increase, more and more people will become less affluent, i.e., poorer than they used to be. The age of cheap energy is over. Unfortunately, soon this will be true for all non-renewable resources as well.
This means that our economy, which runs on oil, will not be able to sustain past levels of growth indefinitely, if at all. Pundits on TV are discussing how long it’s going to take before the current recession will turn around and we come out the other side ready for the next round of growth. In my view, this recession is not going to end any time soon and without appropriate leadership it might not end in our lifetimes. The result might easily look like an economy in the middle of a very long slow motion train wreck.
If this sounds like a dire prediction, it doesn't have to be... but it very well might be. Americans, in general, seem averse to contemplating reality. Up until now it’s been easy to get away with it, for as long as energy was cheap we were all free to pursue personal interests and put most everything else out of our minds. But soon reality is going to confront us at every turn. For some, it's already happening.
For example, without cheap oil our food supply will begin to contract. American corporate agriculture runs on oil. It takes oil to prepare the earth, it takes oil to fertilize the fields, it takes oil to harvest the crops, it takes oil to kill the bugs, it takes oil to ship the produce, it takes oil to keep things cold, and it takes oil to cook our food. Meanwhile, bees are dying, bats are dying, while our oceans are being over-fished, polluted with non-biodegradable plastics, and poisoned with PCBs and other chemicals.
Now consider, the cost of fuel is not going to go down except for short-term market fluctuations. Producing energy efficient cars will help, but our oil based, combustion engine based economy, is coming to a close. Replacement technologies are not in place and it takes time to build infrastructure. The longer we delay the development of enlightened energy and transportation strategies, the longer and deeper economic dislocations will be.
A lot of people don’t have much money now and they have less credit and are less credit worthy than they used to be. We are the only industrialized nation with a zero to negative savings rate. Very few industries do not in some way depend on energy and at the same time nearly every corporation in America is committed to growing their profits at double-digit rates. There is not going to be double-digit growth in America. If significant growth occurs it will probably take place in emerging markets but only to the extent that energy allows. In the US, where citizens, government, and corporate executives are somewhat delusional, without society reinventing itself, the economy will decline or stagnate. You can argue these points with me, and I'm always open to it, but in the end, reality will settle the argument.
As corporate executives confront this reality, one can only imagine what kinds of strategies they will use to try to insure their double-digit goals. Their strategies have been evolving for a long time. Look how much effort and money they expend corrupting government policy and officials with their teams of lawyers and lobbyists. Why do they do that? Because they don’t know how to earn double-digit growth legitimately. The only way they can do it is to dip into our pockets and extract our wealth through deceit, corruption and back door government collusion.
Peak oil has been kept a corporate and government secret since 1956. We could have been planning for it all along had not a cadre of corporate and government power brokers diverted our public wealth into their self serving strategies.
So now we have some very severe problems facing us. From government we get lies, secrecy, and obfuscation to prevent what citizens might do if we only understood how we’ve all been cheated.
Officials are not stupid or uninformed… They know and accept that we are in Iraq to control resources. They knew if they had told us what they were up to in the beginning, we wouldn’t have let them get away with defacing the Constitution, murdering a million people and injuring and displacing millions more to take control of the oil. They sugar coat and lie now about almost everything they do. No matter what the politicians tell you, we are not leaving Iraq, at least not until we are sure that we will have certain unfettered access to the oil… or until we have some enlightened leadership.
It’s important to understand this: If we approach these problems with anger, fear, and knee jerk responses, we will surely make things much worse. And yet for an awful lot of people, that will be the initial response to being confronted with, and being awakened by-- reality. The problems we face are solvable. Human beings are capable of great creativity, compassion, and sacrifice. But we can’t solve problems if we are afraid to talk about them, and we can’t manifest a creative environment for developing solutions if we are afraid to tell the truth. The truth about what? In this case, the truth about everything! It should be obvious by now, that you can’t lie about some things and expect that those lies will not eventually poison or corrupt most everything else. The health and well being of every human soul is in some way dependent, interconnected and related to ever other.
We can’t arrive at optimum solutions if we are so afraid to think for ourselves and examine our preconceived ideas and accepted myths. I don’t think we will be able to find meaningful solutions to the problems we face, unless the great majority of us become willing to change our interests, our habits, and our attitudes. This is not going to be easy.
At first, very few politicians, corporate executives, or religious leaders will look kindly on the prospect of examining the delusions and myths we grew up with. In fact they will probably go to any extreme to tell you what I’m saying is just a lot of nonsense. No one who has influence and power over others will want to give it up. But make no mistake… as Dr. Barlett1 says, the problems are all going to get solved… the only question is how painful is it going to be and will these problems get solved with any semblance of compassion, justice and fairness?
If we attempt to look out only for ourselves, we can be pretty sure that’s what others will do too. And if we do that, I can assure you, the suffering will be unprecedented. We are all members of one family. We need to remember that and realize that every one of us has a stake in finding viable solutions, where no one is left out, and where no one will be asked or be required to sacrifice their basic rights or dignity.