Sometimes it feels as if America is a huge ocean liner, much like the Titanic, steaming full speed ahead on dark nights through treacherous iceberg-filled waters. So far, we have clipped a few icebergs, and are taking on water, but we are still managing to stay afloat. Like the Titanic, we are a lumbering beast with such gargantuan momentum that it takes us considerable time and effort to slow down and change direction.
The ongoing bank bail out is just one example of our desperate efforts to change direction and avoid cataclysm. In spite of injecting hundreds of billions of dollars into the system, it shows little signs that these massive efforts are actually benefiting the average Joe. Credit is no more available now to small businesses and consumers than it was before the bailout, and last month's horrific loss of 533,000 jobs shows few signs of turning around.
And what about the Detroit bailout? Will our government simply write a blank check to Detroit, just like they did for the banks, and will we continue to see more of the same? One definition of insanity is doing the same thing over and over again, and expecting a different result. If Detroit keeps doing more of the same thing, will we see billions more in losses followed by a stream of never ending bailouts? The ongoing economic crisis presents a unique opportunity for congress to make sure that our bailout dollars get spent on developing the infrastructure and technologies that will help get America off the oil habit, start reducing our carbon emissions, and shift our businesses in the direction of sustainability (see my article, 12 Tips for the Sustainability Shift).
Why is it so critical right now that we do the right thing? Because we may well not get a second chance! In spite of the current economic crisis, for the time being our global economy is still working reasonably well. The electricity is staying on throughout most of the western world, freighters are still sailing the oceans, and the oil that our world's economy so depends upon is still flowing. The recent radical drop in the price of oil has American consumers overjoyed, but this euphoria may well create a false sense of security that "the good old days" are just around the corner.
The recent crash in oil prices is really a double edged sword. In the long run, low oil prices could hurt the economy more than they help, if the result is significant delays in the development of renewable and sustainable alternatives. Most people don't realize it, but the world's production of regular crude oil actually peaked in 2005-2006, and it has only been through a giant leap in bio fuel and tar-sand processing that the world's liquid oil equivalent production has been able to compensate for the loss of nearly 10% of its regular crude oil production. The potentially economy-busting hitch is that when oil prices drop below $60-75 a barrel, it is no longer economical to process much of the tar-sands and bio fuels that we currently rely upon to fill the crude oil gap. This fact, combined with the recent crash in the supply of capital for investment, has forced many energy companies to table their planned new energy developments, such as deep ocean oil wells, bio fuel facilities, and expanded tar sand refining.
The reason that we must be so concerned about this huge delay in new liquid fuel development projects is that, according to the International Energy Agency's (IEA) recently released authoritative study, the output of the world's oil fields is declining faster than previously believed. It turns out that without investment to boost oil field production with special "enhanced oil recovery" (EOR) measures, such as injecting sea water into oil fields, this rate of decline is currently 9.1%. When the capital investment is made to implement EOR methods in flagging oil fields, this figure decreases to an improved, yet still dismal, 6.4% annual decline. To keep up with this rate of depletion, it would take the discovery and development of an entire Saudi Arabia's worth of new oil fields every year or two from now until eternity, and this impossible fantasy will never happen!
As it has for nearly 100 years, our American economy still eats, sleeps and sh-ts oil. Unless we play our cards right, as the world's existing oil fields continue their rapid decline there will be even less than was previously projected in the way of new liquid fuel developments coming on line to at least partially make up for the inevitable global oil field depletion. We will be in for quite a rude shock if we don't take advantage of Detroit's current financial crisis to proactively shift America's massive automotive industry's focus away from gas guzzling cars and trucks, transforming our lumbering automotive giants into producers of windmills, trains, hybrid buses, and super efficient 100+ mpg cars. Did we cry when the horse-and-buggy was replaced by the automobile? Should we cry when today's gas guzzlers are replaced by sustainable environmentally friendly alternatives?
If we focus our efforts on developing renewable and sustainable options, as oil production falls, oil demand will fall and our energy dollars will stay in America, spent on energy made in America, and we will see a new American renaissance! If we pretend and hope that today's low oil prices mean a return to the "good old days," then as oil production falls, our oil based civilization will also fall. Just as the past eight years of failed leadership in America made it quite clear that we needed a change in our government's leadership, it is equally clear that we need a change in America's auto industry leadership, direction and focus.
Wake up America, and tell Obama to "Do the Right Thing" with Detroit!
Matthew Stein is the author of When Technology Fails: A Manual for Self-Reliance, Sustainability, and Surviving the Long Emergency from Chelsea Green. For more information, visit chelseagreen.com and whentechfails.com.