Americans Feeling Pain At the Pump, But That's Only Half the Story

It's amazing how unaware Americans are of the extent to which our economy is dependent on oil. Amazing not only because of the consequences--geopolitical, environmental and social--of oil addiction, but also because oil prices affect every aspect of our daily lives. I was reminded of this fact the other day when I went to my local bike shop. There, the talk wasn't about carbon fiber and chainrings, but rather about how the cost of shipping has skyrocketed over the last few months (fortunately for the bike shop, high gas prices also mean business is booming). Meanwhile, food riots in Haiti, Egypt and Mexico have made headlines, and the airline industry, hit particularly hard by fuel costs, has gone so far as to begin charging $15 per checked bag.

From high-end bike shops in Providence, Rhode Island, to the slums of Port-Au-Prince, and everywhere in between, people are directly feeling the effects of $130 a barrel oil. Yet there is still no sense of urgency in American political discourse. President Bush was recently on his hands and knees begging OPEC to pump more oil (which they declined to do), and both John McCain and Hillary Clinton have been touting a federal gas tax holiday. Some believe that once oil gets expensive enough America will be forced to truly seek out new sources of energy. But that kind of thinking belies a fundamental problem: the switch to an economy based on renewable energy won't happen overnight, and it will require far more than a mere policy fix. Just try to think of one product you buy that can be manufactured and delivered without fossil fuels and you'll see that the scale of the problem dwarfs our current proposed solutions.

Finally, consider this: without oil our agricultural system would literally collapse. And while we won't run out of oil anytime soon, expensive oil--combined with increased use of biofuels and drought--has put nearly a billion human beings on the brink of malnourishment. Seen in this light, getting off oil is not about carbon dioxide or geopolitics; it's about figuring out how the world is going to feed, clothe, transport and provide energy and water for 9 billion people in a just, sustainable manner. As Al Gore likes to say, climate change is not an environmental issue, it is a generational challenge--and opportunity--that will entail a paradigm shift in how the world operates. Real change won't come about until we stop looking to OPEC, Canadian tar sands and the Alaskan National Wildfire Refuge to drill our way out of the problem. Real change will come from what I call the three I's: Invention, Investment and Implementation. We've got to put our minds, money and hands to work in search of cleaner, more efficient, more equitable ways of doing just about everything. In order for that to happen we have to first understand how integral oil is to everything we do.

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Comments

[cylindar]

When the automobile came of age it was amazing how fast stores began to supply gasoline rather than horsefeed to supply the demand. Hydrogen is the key to the future. Remember that word "HYDROGEN'

[Cathexis]

Sorry, I have to disagree -- that trades one problem for another. Water vapor is a greenhouse gas and may well have additional unforeseen climactic effects.

Solar! Free. Unlimited. Sustainable.

That is the way to go.

[noneIn2008]

Gas prices up, good deal, it achieves the goal of reducing consumption. The Pols want to add a tax of $4.00/gallon to reduce consumption. Prices increases can do it alone, but then what can the pols tax.

[Cathexis]

An incredibly short-sighted approach that assumes all/most driving is discretionary. Sky-high gas prices may well change behaviour but it will be a pyrrhic victory that leaves a swathe of economic destruction among the most vulnerable strata.

[SamThornton]

One major component of the current food crisis that doesn't get enough mention is the role played by U.S. trade policies as implemented through the WTO/World Bank and the IMF.

First, target countries have been forced to accelerate debt repayments to bizarre levels (over 40% of Mexico's total budget, for example), paid for by making huge cuts in social spending and food supports.

Then, target countries have been forced to eliminate agricultural "trade barriers" so imported food -- most of it heavily subsidized by U.S. and European nations -- becomes cheaper than locally grown food, effectively destroying their local food production.

Once the farmers leave the lands, the price of imported agricultural products explodes. Lacking the safety nets of social spending, target populations suddenly are placed at risk of starvation. It's effectively economic colonialism with food as the weapon and it's been going on since the Clinton Administration. Now, of course, we are shocked, deeply shocked by all the unfortunate starvation.

[The Hedonistic Pleasureseeker]

Thank you. Everyone needs to read that book written by the self-described "Economic Hit Man," including me.

[mpkirby]

I think any solution to our energy crisis (and that's what we have to manage it as -- An energy crisis, not an oil crisis) will need 3 separate solutions.

1) Insurance -- We need to plan for the possibility that oil shortages will shut down critical functions of our economy. Agriculture, transportation, winter heating in the northeast. If oil goes to 150, 200, 300 dollars per barrel, what is the point where government will intervene, and what are the plans for that intervention.

2) Investment -- Re-organize the tax code to drive the behaviors where we want them to be. Tax excessive energy use, reward conservation. Invest in eletrical distribution (e.g. recent issues in texas where electricity is being thrown away because of the lack of power lines). Invest in basic research towards alternative energy. Better transportation systems, new building standards, etc.

3) Conservation -- This is ridiculous people. Republicans and Democrats alike should believe conservation is a critical part of any solution. How do we save? Where do we get the best bang for the buck? It used to be considered patriotic to conserve. How do we get back to there?

Mike

[The Hedonistic Pleasureseeker]

Snap your wallet shut. There ya go!