A Crying Shame | Green Energy News

March 13, 2005 – Vol.9 No.51

A CRYING SHAME.

Oil hit record highs this week: expect higher numbers to follow in coming weeks.

The U.S. Senate has voted to include authorization to drill for oil in the Arctic National Wildlife Refuge (ANWR) in a budget bill. If the budget passes, exploratory drilling could begin in less than a year.

General Motors has posted a profit warning for the upcoming year: Sales are down. Competition and costs are up. Analysts see more troubles ahead for GM, possibly bankruptcy.

Oil is getting expensive because traders think supply will not meet demand. Yet there are no gas lines, no shortages. Higher prices haven’t slowed consumption measurably, but have forced consumers to spend more on fuel and possibly spend less elsewhere. (Some - with the financial ability - are shifting to more fuel-efficient vehicles.)

Industries heavily reliant on oil and oil products are forced to raise prices or see profits - and possibly the businesses themselves - fall. GM is losing ground in part because it is heavily dependent on the high profits from the sales of fuel-hungry trucks and SUVs. Sales are sliding because of the climbing cost of gasoline. Ford is apparently in similar trouble.

Economists say that oil is still cheaper than it was at an inflation-adjusted peak above $90 a barrel set in 1980 and that consumers should be able to afford it. Economists don’t mention that the peak in 1980 was only for a short period of time - a matter of months - prices fell after that.

Oil analysts think that rising prices for oil will continue for a long period of time, into 2006. Isn’t the length of time high prices stay in effect damaging? It’s one thing for consumers and businesses to endure a few months of price hikes. They can recover. But if prices stay high - or climb - for more than a year then a significant chunk of cash will be removed from people’s bank accounts. The length of time prices stay higher than expected is probably more important than a price peak adjusted for inflation.

Those who voted to give permission for drilling in ANWR should be ashamed. Forget about the environmental damage, the damage to habitats and the industrial blight on the pristine landscape for a moment and consider this:

Politicians tell us they are looking out for our immediate needs AND our future. Despite its problems oil is a versatile resource. Burning it for a trip to the mall is a waste. But using it to make life-saving drugs or to build durable products is worthwhile. Using all the oil up now, or in the next few decades may deprive future generations of a useful and unreplaceable resource. We may need the oil 100, 500,1000 years from now. Aren’t politicians supposed to think that far ahead? Our Founding Fathers did.

The crying shame?

America is losing its respect, admiration, and possibly some industries because of its addiction to oil.

First it was the abandonment of the Kyoto treaty to cut back on greenhouse gas emissions.

Then the war in Iraq, which many see as move to secure oil supplies.

Now, the permission to industrialize a portion of an untouched wilderness only because the nation’s leadership doesn’t have the guts to demand that the nation’s fleet of cars and trucks get better fuel economy or use a different fuel.

And, it’s not just government. The U.S. auto companies can take the blame for their own problems: Their inability and failure to recognize a growing problem - the availability of oil - and adjust their product offerings to reflect that reality.