The Truth About Oil | Green Energy News

May 29, 2008 – Vol.13 No.10

THE TRUTH ABOUT OIL.

Foolishly, the nations of the world have built much of their economies around a natural resource they know surprisingly little about. The trains, the planes, the ships, the boats, the buses, cars and trucks even the earth-moving equipment used to extract coal from open air mines need oil to function.

As much as these tools of the world’s economies need oil to operate there is only an educated guess as to how much is left in the world’s reserves. Deep in rock cavities no one has ever seen oil underground with the naked eye. No one can walk around inside an oil field with a dipstick and measure with accuracy how much is still available.

There’s no doubt that the world is in the midst of an oil shock, one that began shortly after the attacks of 9/11. The world has been shocked by oil before and recovered, but this shock has a different flavor to it. When earlier shocks took place the world’s major consumer of oil was just the US. Now the US competes with other major consumers, the European Union, China and soon India for access to oil. Much of the world has basically followed the US economic example of success: build a country around personal transportation, cars. The fuel supply to feed all those cars is stressed to the point of breaking. Perhaps it already has.

Unfortunately it seems most people see the current shock as temporary: oil prices, hence gasoline prices, will drop, happy days will return, they think. Barring a string of new oil discoveries and quick recovery out of ground this seems unlikely. High prices at the pump, though perhaps moderated somewhat with reduced demand or less interest in speculation, are here to stay.

There’s another thing different about this shock: an unwillingness by Washington to do something about it in the short term. Previous shocks brought a national 55 mile per hour speed limit. There’s no substantive talk in Washington now about bringing it back. There’s a reason for this of course: It’s an election year. No politician wants to risk bold legislation that voters might might find unappealing.

Even though Washington refuses to act on oil, industries, the states, communities and consumers at least deserve from the nation’s capital an open and frank discussion on the future of oil. There needs to be some blunt talk with Americans. If oil ain’t what it used to be and will never be again people need to know. They need to know so they can plan ahead.

--- Consumers need to know so they can plan their next vehicle purchase.

--- State and community leaders need to know so they can allocate funds for additional mass transit.

--- Transit agencies need to know so they can plan new bus and rail routes and buy equipment to support them.

--- Building developers and planners need to know so they can plan housing and business developments around transit routes.

--- Airlines need to know so they can plan aircraft purchases around fuel economy.

--- And most importantly, car and truck manufacturers need to know so they can plan and develop new products around fuel efficiency or alternative fuels.

Currently the International Energy Agency (IEA) is in the midst of an investigation of 400 of the world’s largest oil fields to get a clearer picture of what’s left underground. The publication of the report in the Fall - around election time - could open the door to a public discussion on oil - particularly if the report looks grim.

Will this honest discussion - the truth about oil - ever take place? Unlikely. Increasingly Washington is shying away from meddling in the free market. Even though continued high prices at the pump will damage the economy it is now taboo for Washington to offer leadership - that blunt talk on oil - that would help alleviate the economic pain.

The Gulf of Mexico is already warming up nearing temperatures that could support hurricanes. Four dollar a gallon gasoline might seem cheap if another Katrina or Rita rolled through this year.

Links:

International Energy Agency (IEA)
http://www.iea.org