Sure Petrol

It’s June. We’re almost halfway through another year. It’s time to start complaining about something different. We could sure use a heat wave.

Time flies, but a quick look at the opinion page shows we’re still worrying about the same stuff. No, not indoor winter sports leagues that go on and on, never seeming to end, way past the point where the ice melts and I stop caring.

When I read the Citizen News last week I saw that Natalie Sirkin was arguing (not for the first time) that environmental protection raises prices and loses jobs. It takes a brave woman to argue against protecting the environment these days.

I agree with Natalie that we don’t need more government regulations. We do just fine cutting CO2 emissions by ignoring the regulations we have, which would only get in the way of our collapsing coal mines and leaking oil wells.

But this could be the perfect time for a severe CO2 cap. After all, right now there are no more jobs left to lose. And if prices go up maybe that will include home prices. That’s what everyone seems to want more than anything else.

The big surprise last week was seeing Doug Thielen’s Common Cents again. For some reason it felt like Doug had never really been gone.

Ellen Burnett called it a reprise, but it felt more like a re-run. It was a clever way for Doug to dodge “Judge” Ellen’s ban on any more letters about The Most Important Issue In The World.

Doug called the ban “a slap in the face to objective journalism.” I never expected that. It was like OJ Simpson speaking out against spousal abuse. I thought objective journalism had a restraining order to keep Doug three pages away at all times.

After reading Doug’s piece, it was a joy to read that Ellen has convinced Susan Szold to write more than just her column. You’ll have to dig for it (section 2, page 3) but it’s worth it.

I like reading Susan’s stuff because she hasn’t started to repeat herself like the rest of us. Also, there is the opportunity to learn something embarrassing about Seth.

A couple of weeks ago I was talking with Cheryl Reedy about how hard it is to find new things to write about. Cheryl asked me if I ever started something that seemed like it would work, only to get halfway through and feel totally lost.

Yes, I have had that feeling before. I would not be surprised if the people who read these columns get the same feeling, more often.

Like, right now.

Halfway through the year or halfway through this column, I have to admit that I worry too much. I especially worry about one specific thing. It’s become a bit of a joke with the people close to me who don’t see it the way I do.

All I talk about is peak oil and disaster.

Petroleum is washing up on beaches in the Gulf of Mexico. The shore patrol is there, in plastic coveralls and surgical masks, to scoop up tarballs and gunk along with dead fish and birds and turtles. We’re drilling in water so deep we can’t do it safely. We’re digging for coal as fast as we can. Between accidents we try not to worry about safety. All we want is cheap energy, and a barrel of oil produces more of it at less cost than anything else. But it takes energy to get that barrel. It takes more energy to get it from places like Alaska, or the bottom of the ocean.

People don’t worry about this as much as I do, or they just don’t talk about it. But it’s taking more energy to get a barrel of oil at the same time that there’s less barrels to be gotten and more barrels needed.

Yes, I am as bad as Natalie and Doug. I feel as strongly about my Issue as they do about theirs.

Forgetting about it, even for just a little while, would be nice. But then insurance giant Lloyd’s releases a report that is full of things I have been trying to tell everyone around me, like how we need the equivalent of a new Saudi Arabia every three years to make up for the depleting production of our existing oil fields. I’m glad that someone respectable like Lloyd’s is talking about this, but it does not really make me feel better.

All it means is that the problem can no longer be ignored.

The thing to do now is to start understanding how this energy crisis is going to change the way you live. Lloyd’s is blunt about this. If you prepare, you may find a way to prosper. Failure to prepare could be catastrophic. Unfortunately it seems like many people think things aren’t going to change that much or that fast, or that all we need to do is get out of the way and let that Invisible Hand of the free market do its thing.

Here in Connecticut, a couple of weeks ago Natalie wrote that the precautionary principle (in the absence of scientific consensus that an action is harmful to the environment or human life, the burden of proof falls on those taking the action) gets in the way of industrial growth. It pits the marginal protection of health against “other values like freedom, justice, and excellence.” In other words, it raises prices and loses jobs.

Elsewhere, in western New York and Pennsylvania and across broad parts of this country, BP and other companies are extracting natural gas from the ground using a procedure that involves injecting millions of gallons of water at high pressure into shale formations, fracturing the rock to release the gas. The water used for this is not safe to drink.

Ready for the next disaster? In 2005 we passed an energy bill that exempts from the Safe Water Drinking Act any company using that hydraulic fracturing technique to get gas, among other benefits the bill gave to big oil companies at the expense of American citizens/taxpayers. BP is one of those companies.

So it looks like we’re not going to bother with the precautionary principle, again. Natalie wins this one, or maybe we all lose. Sure petrol—guaranteed gas—is what we want more than our health. It’s hard to imagine life without this stuff.

Dare to imagine life without a car.

All of us need to start thinking and doing something about this. This isn’t something we have to wait for. We don’t have to let a real energy shortage throw the first punch. Let’s strike first.

Yesterday is when we should have started, but today will be soon enough.

Posted in Peak Oil, SMNO | 2 Comments

The Last Bailout

Millions of barrels of oil are leaking into the Gulf of Mexico, and it appears that there is little anybody can do. People are frustrated. They are angry at BP for causing the leak and they are angry at our government. They want the government to do something… anything.

Thousands of birds are covered in oil, and the government has yet to send one deep fryer.

We have become so addicted to oil that even now many people don’t see anything wrong with drilling a well a mile below the surface of the ocean to get to oil that lies another couple of miles below that. We just want to know why we can’t turn the damn thing off.

Some are calling the uncontrollable leak Obama’s Katrina. Dmitry Orlov, who survived the collapse of the Soviet Union, is calling it Obama’s Chernobyl. It’s a better analogy for a couple of reasons.

Katrina was a natural disaster that the federal government was slow to respond to. Chernobyl was a technological disaster, the result of the need for more energy and a willingness to ignore risk. Response time is not the problem. We are having a hard time figuring out what to do next.

Sending a deep fryer makes as much sense as holding a press conference to announce we’re in control. And if you’re expecting the government to be able to do something about this, you might as well be calling for a deep fryer.

The experts all work for the oil industry. That’s where the money is, unless you can get a job at Goldman Sachs. The experts get paid to figure out how to get oil. They don’t worry too much about how to stop getting it. There’s no money in that.

There are government agencies that are supposed to review what the oil companies are doing and make sure no laws are being broken. But these agencies are not there to stop the oil companies from getting oil.

All the easy ways to get oil are gone, so we’re forced to stick miles-long straws into the sea floor, or buy oil from people that hate us. Deepwater oil is better than foreign oil, but it turns out drilling is easier than deepwater repair.

The experts are going to try another containment cap. They are hoping this one works; eventually something similar worked for Chernobyl. I’m not sure what comes next.

Matthew Simmons, an investment banker who specializes in energy, thinks a small nuclear bomb would stop the leak.

That sounds like something out of an episode of Lost. The leak does look sort of like the Black Smoke Monster. Maybe BP should send Desmond down there next.

Maybe BP should try to plug the leak with an upside-down statue of St. Joseph. Then the US could sell the Gulf of Mexico to China for about half a billion dollars. This would cancel some of our debt.

It seems everyone thinks this leak could have been easily plugged by now. James Carville said that if this happened in the ‘90s, Bill Clinton would have swum down and fixed the thing himself. Carville visits this planet every so often to remind us how good things were under his old boss.

Many people want to blame the president for not fixing this yet. The last time so many Americans counted on Obama to fix things this fast was the week after his inauguration.

Then he won the Nobel without really deserving it, and everyone said that you couldn’t possibly reward someone who has not had the chance to prove himself first. We don’t reward expectations.

It turns out to be okay to punish you if you don’t meet those expectations.

Now, people who complained that Obama was running an out-of-control, big-spending government that took over private companies like General Motors are complaining that he isn’t taking over British Petroleum fast enough.

People who thought government should not get involved in health care, that to do so would cripple the ability of big insurance companies to make a profit, are outraged that government has not gotten involved in the business of oil.

They want an immediate government response. It doesn’t seem to matter anymore that when the government gets involved in anything, it gets bigger. That a big government bureaucracy can’t get anything done efficiently. That we can’t afford to increase the size of the government. Or that if we can only keep the government out of it, entrepreneurs will step in and innovate, and new businesses will get created, and the Invisible Hand will fix everything.

We face a serious problem. If we stop the oil leak we are only dealing with a symptom. The problem is so serious that I should not be making jokes about it. That would seem like a waste of time. It would be better now to focus on solutions.

The solutions are not easy or obvious. They often appear contradictory. We are going to disagree.

In recent weeks I have heard candidates running in November’s elections talk about how government needs to get smaller and needs to create jobs. They have said that if they get elected they are going to slash the budget by shutting down unnecessary parts, and at the same time they will fight to protect Connecticut workers by keeping naval bases open.

We want all these things. But we can’t have them all.

In the past few decades the idea that there is no such thing as good government has taken hold among many of us. That becomes a self-fulfilling prophecy. We govern ourselves until enough of us no longer think that is possible.

But most of us still believe there is a United States that can find a way to overcome any challenge.

It can be a waste of time for us to argue about whom to blame, to endlessly critique the performance of our leaders. It’s a great sport when times are good. And we should be watchful that our leaders don’t make mistakes that go uncorrected or ignore our will. We can disagree about how we get things done, as long as we eventually make a decision and work together.

But that is all we do now. The solutions are not easy or obvious. They are going to take time and sacrifice. If all we do is argue, then we are guaranteed to fail.

Posted in Peak Oil, SMNO | 2 Comments

Return of the Invisible Hand

We are stuck with two big crises that we can’t get free of. The first is the financial meltdown. The second is the environmental disaster in the Gulf of Mexico (coming soon to a beach near you). The common threads between the two events: they are man-made, and they happened because we thought it would be better to trust the free market to regulate itself.

We lurch from disaster to disaster like an out-of-control addict looking for our next fix, looking a mile or more under the sea and spending too much time in bad neighborhoods. That’s where the dealers are. America has been acting like a dazed, starving crack whore. It takes a French newspaper, Le Monde, to report that the Department of Energy is quietly preparing for a decline in world oil production starting in 2011.

World Liquid Fuels Supply

The “unidentified projects” this chart is referring to are oil fields that we have not discovered yet. That doesn’t include those recent discoveries in deeper parts of the Gulf of Mexico or off Brazil that we haven’t quite figured out how to get to yet. Given how well we manage with oil that’s only one mile below the surface of the ocean (to clarify, a mile below the surface is where we start drilling, but the oil is actually farther down), you might as well put those recent discoveries in among the imaginary “unidentified projects” and then just stare at that chart for a few minutes and let it sink in.

That’s the third thread, and the important one that ties this all together. We haven’t been regulating the oil industry because if you are a desperate crack whore you don’t regulate your drug dealer. We need all the oil we can get. Cheap and plentiful oil drives growth. And we haven’t been regulating the financial industry because oil is no longer cheap and plentiful. The only way our economy grew over the past decade or two was to rely on financial legerdemain to create wealth out of thin air. Now that bubble has popped. As we sober up we notice that we’ve sold most of the furniture, the jewelry and other valuables are with our friends the pawnbrokers, and we trashed the place pretty good. The only people flashing any bling are the dealers and pimps in the financial and oil industries.

There is no safe place to go for rehab. Mars would have been nice but it’s out of our price range, maybe forever now.

A free market only works in an environment without constraints and with infinite resources. That environment does not exist. The planet we live on is dangerously overpopulated, something that happened only in the past 150 years — coinciding with our ability to get at and use first coal and then oil. The planet we live on is dangerously stressed and abused. Its oceans are overfished. We are wearing it out. We can’t leave it by the curb, and drive over to Wal-Mart to pick up a new one. We face what is known as the Tragedy of the Commons. Our addiction will stop. It will stop not because we can control ourselves, but because we can’t, and because pretty soon now we are going to find that the liquor stores and the crack dealers are all gone. At that point, as the withdrawal symptoms kick in and the guns come out and as the invisible hand manifests its physical presence in a cold grip around our throats, most of us will long for some regulations.

Posted in Journal, Peak Oil | 7 Comments