Plenty of oil if price is no object

Beverly Hillbillies

The get-rich days of Texas Tea are over. But if we're not careful, we're all going back to a hardscrabble life, and not in Beverly Hills. Image: Gary W. Tooze.

Last week we reported how the International Energy Agency’s 2010 World Energy Outlook said that world oil production peaked in 2006. Yesterday, guest columnist Tom Whipple, editor of ASPO-USA’s Peak Oil Review, drilled down a little further into that report to show that if you really parse its contents, you see that while the IEA says the world peaked in 2006, they’re also saying it won’t really peak until 2035.

Huh? Where do they get their reporting guidelines, from the unemployment model where we just stop reporting how many folks are really out of work by dumping all those who’ve been jobless for so long that they don’t count anymore?

Should the IEA have just titled their World Energy Outlook 2010 “Peak Oil, Schmeak Oil?”

Look, the wonky term “peak oil” really refers to the end of cheap oil. And, because oil is so important, peak oil will mean the end of cheap energy period.

For that reason, when the IEA comes out and says we’ve not only reached but have indeed gone past the global peak by four years, that’s news, baby. But because the IEA was too wimpy to report in a straightforward manner, instead we got mumbo jumbo that mixed the conventional peak that came in 2006 (the end of the Beverly Hillbillies’ a-bubblin’ crude) with the unconventional peak that’s coming in the future (deepwater drilling or combing the gravelly tar sands of Canada and Venezuela to squeeze out trashy, low-grade oil).

The net result was that lazy media outlets could bypass the urgency of the news or cherry pick the report to suggest a middling concern in the “coming decades” when big, bad China might drive up the competition and the cost, some 25 years hence.

And the band played on

There’s a huge difference between conventional and unconventional oil that shows up in quality, access (or what the industry likes to call recovery), and the ding-dang cost difference between something that’s smooth and easy to get and something that’s cruddy, hard to get, difficult to make usable, and requires many more resources in its production. The bottom line difference is price my friend, and that is not a negligible, shrug-our-shoulders kind of difference. You might almost say it’s the difference between real oil and fake oil.

I interviewed Canadian economist Jeff Rubin earlier this month (watch for the interview in the December issue of Transition Voice), and the way he notes the price difference is that globalization doesn’t work in a world of triple digit oil prices, which is where they’re headed sooner rather than later. We don’t have 25 years before they get there. As Rubin puts it, “distance costs money.”

That will mean our economies will be less global and more local. Now, relocalization may look all charming and inviting as a response—think farmer’s markets, community gardens, shopping at downtown Mom & Pop’s and Five & Dimes instead of Wal Mart and the cavernous Costco. But there’s going to be a lot of pain on the way to getting there as long as millions of us live in far-flung suburbs that we can’t afford to drive to and from at $10 or $12 dollars a gallon (or more).

And all those county soccer leagues with three times a week practices and Saturday games? Fugedaboutit…”kids, go outside and play.” This doesn’t even begin to touch on all the ways the cost of fuel impacts the cost of everything else, from food to clothing to heating your home to sending your kid to college and so much more.

In the face of this huge challenge, our newspapers aren’t covering it? Congress isn’t addressing what the US response to this should be? Instead, several states are so out of the loop that their newly elected Republican governors want to send back stimulus money for high-speed rail because they don’t think enough folks will ride the trains once they’re built. Wow, that’s thinking ahead, technocrats. Maybe your constituents will prefer walking instead. If Rubin is right, millions will be “taking the exit lane” on driving in coming years because it will simply be unaffordable.

Failing to plan is a plan to fail

Conventional oil and unconventional oil hardly inhabit the same universe because their properties and costs are so vastly different. Add to this increasing demand from all over the world as ass-kicking China roars the dragon a little louder and yes, friends, the US had better pick the sand from the corners of its sleepy eyes if it wants to get back in the game. The IEA report isn’t just significant, it’s earth shattering to everything about our way of life. Now is not the time to be asleep at the wheel if we still want to be bragging that the US is the “greatest nation on Earth.” We need to get in freaking gear!

Solar panels at Nellis Air Force Base, Nevada. Photo: theregeneration via flickr.

Solar panels at Nellis Air Force Base, Nevada. Photo: theregeneration via Flickr.

My advice? We’ve got a mighty fighting machine in the US military, giving us a rare bit of breathing room in terms of how much more funding we direct to the outward posture of empire. They already get what peak oil means for security and they’re already doing a lot to cut their energy use. But they could do so much more.

So, how about the military buys 100 megawatts of solar power in the next five years for all military bases in the US?  How about the same amount for wind power? And for all the standard light-duty cars and trucks it buys, what if the military ordered only hybrids and EVs?

Green defense procurement will have collateral benefits in the civilian world to drive prices down for everybody, prompting private industry, local governments, and individuals to buy solar panels. It will get them to buy more electric fleet vehicles, too. Renewables will never replace all the energy we get from fossil fuels today, but we have to begin at least substituting somewhere.

The US can go down in history as sleepwalking into its demise, blindsided by an energy crisis it was too feckless to address and too mired in partisan in-fighting to take seriously. But real energy disaster will motivate us when it comes. Anyway you cut, though, a response at that stage will be a little too little a little too late.

Instead, just up and finally admitting that peak oil might be the great unifier we need right now, and a job-creation machine like no other, could turn the tide on the economy and energy security. It could even make those thieves and hucksters on Wall Street happy for a day. Like Pastor Rick Warren advises, it would be a “purpose filled life.” I think we could use one of those, unless we prefer our purpose remain the weekly voting battles on Dancing with the Stars.

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