In recent weeks, we have seen the cancellation of industry plans to exploit the Arctic and Antarctic, build new pipelines, and force financial dependence on a single source of supply. At $50 a barrel, the justifying prediction of continuous exorbitant profit make no sense. It is an incredible opportunity for change.
Remember "Peak Oil?" The world was running out of oil, prices would soon skyrocket, and we had better find other fuels. Well, that argument didn't work out so well for environmentalists, did it? As oil reserves and those of other carbon fuels became scarce and prices rose, the law of supply and demand kicked in. The industry invested the profits from those higher prices in new technologies, and the oil barons found even more destructive ways to extract oil and gas -- by exploiting the muck from tar sands, inventing hydro-fracking, and despoiling Third World sources. So now, oil is cheaper than it's been in years, about $66 a barrel. Regular unleaded gasoline can be had for well under $3 a gallon. One of the few things sustaining U.S. consumer purchasing power in the face of dismal wages is close to $100 billion saved in energy costs. OPEC's pricing power has been broken and the United States is about to surpass Saudi Arabia as the world's largest oil producer.
Climate change economics have shifted practices in every industry, perhaps most notably in insurance, agriculture and the military. For the first time, most Americans are experiencing the kind of extreme weather that my classmate saw in subtropical Florida. Now, the ethics component is gaining widespread public acceptance too.
Dealing with resource scarcity will compel companies to adopt new technologies, new manufacturing processes, and new management practices -- all of which will drive innovation faster and faster. As the global middle class expands, there will be massive opportunities for entrepreneurs to create more efficient industries and more productive business ecosystems. Technologies and industries will collide in new and unexpected ways, and these entrepreneurial mashups, inspired in part by scarcity, will potentially produce greater utility and prosperity for society at large.
A recent bill up before the Hawai'i County Council would have criminalized Big Island farmers for using biotechnology to grow their crops with less fertilizer and fewer pesticides. A second bill is still on the table, and I almost cannot think of anything that would take us further away from where we need to be heading.