Corrupt regulatory oversight, cutting corners to save costs, plus citizens and politicians chanting "Drill, baby, drill" -- is the BP Deepwater Horizon catastrophe really any surprise? The spill in the Gulf of Mexico, the worst man-made environmental disaster in the U.S., is a consequence of our addiction to oil. Like an addict resorting to riskier and riskier behavior to get a "fix", we have adopted riskier and more desperate measures to feed our addiction to oil such as drilling in deeper water and extracting oil from sand. Some of us have the luxury of saying we weren't completely aware of the effect of our lifestyles on the environment; certainly prior to the BP spill we could hop into our cars and drive to the store and buy cheap goods and eat strawberries during a snowstorm without seeing the images of the impact of our collective actions. In fact, it is only fairly recently that we have irrefutable data that shows the environmental and health impacts from smog, carbon dioxide and other byproducts of our oil consumption. While BP project managers who cut corners and regulators who didn't do their job are directly to blame for this spill, our collective hands are not clean. It is our addiction to oil that led to an environment in which this spill could happen.
Talk is cheap
In a June speech President Obama paid lip service to reducing our dependence on oil. Starting with Richard Nixon, U.S. presidents have talked about the need to reduce our reliance on oil. The most effective way to curb our appetite for oil would be to cut the subsidies to oil companies and implement a carbon tax which would more accurately reflect the cost to society of the "collateral damage" associated with oil production. In addition, politicians should materially increase subsidies to alternative energy, and make these subsidies reliable and consistent without short-term expiration and renewal concerns. Taking these steps has always been difficult because of massive vested interests in the economic status quo. Critics of alternative energy subsidies complain that alternative energy will never be as cheap as coal, oil and natural gas, however, in the United States, no source of energy was developed without subsidies; between 1973 and 2003, the federal government spent $74 billion subsidizing nuclear power and fossil fuels, during this same time frame renewable energy and spending on energy efficiency research received $26 billion from the federal government.
It is easy to point the finger at politicians, to say they have not done enough to help us conquer our addiction to oil, and certainly they haven't. Politicians have acted as enablers, allowing us to continue our addiction, and making it cheaper and easier to do so. Watching Al Gore's movie, An Inconvenient Truth, reading about ground water contamination from natural gas drilling, or looking at pictures of oil spills; it's easy to get angry and point fingers at the deepwater oil drillers, the natural gas drillers, or the executives at car companies that pushed SUVs. However, if Americans are asked to drive less, buy smaller cars, or turn down their thermostats, few are willing to do so.
The roots of our addiction are deep
Over 150 million years ago, marine plants blanketed the sea floor and sedimentation created sufficient pressure to convert the unoxidized carbon into oil. Over the past 150 years oil products have fueled the fastest growth in material wellbeing in human history. Especially with the invention of the gasoline-fueled car in 1901 and the incredible mobility it provided, oil became our drug of choice. The cost of our addiction has escalated, driving us literally to the ends of the earth to uncover more.
Estimating the economic cost of our addiction is difficult; direct subsidies to oil and oil using systems are often complex and artfully concealed but estimates calculate the subsidy at around $20 per barrel of oil; but what "cost" should we add for a child who develops asthma from breathing in smog? What percent of the hundreds of billions of dollars we spend on defense is indirectly or directly a result of our oil addiction? What is the cost of the environmental damage from the BP spill and from the thousands of spills prior? We do not need to come up with an absolute number to know that the true cost of the gas we fill our tanks with is much, much higher than the $3 per gallon we pay at the pump.
How do we finally break this addiction?
The first step for addicts going through a recovery program is to admit that they are powerless over the substance they are addicted to and their lives have become unmanageable as a result of their addiction. We can talk objectively about the problems we face as a result of our oil addiction but without the realization that our lives have become unmanageable we cannot begin the process of recovery. We are engaged in a counter-productive war in Iraq whose real purpose is apparently to control more oil, we are facing increasing global warming, and we are assaulted by an immense environmental disaster with far reaching ecological implications. Our lives have become unmanageable.
After this first step we need to begin to take concrete action to break our addiction. There is no shortage of energy in the world beyond oil, gas and coal. From the sun and the wind to biomass, geothermal and ocean currents, energy and the means to capture it exist; what we lack is the infrastructure and scale to support the economics of alternatives. We need to demand change. Automakers made SUVs because consumers wanted them. Ask for (and buy) hybrid cars, electric cars and fuel-efficient vehicles and the auto industry will make them. Conserve energy. Realize the implications of driving a few blocks and change ingrained habits. Speak up -- tell lawmakers you do not want cheap gas, you want money spent on viable alternatives and efficiency improvements. The BP spill is no longer front page news and now we are left with a choice: move this disaster to the back of our minds and continue on as before, albeit slightly wiser about the negative consequences of our addiction, or choose to let the BP spill be the proverbial "hitting bottom" that propels us to finally break our addiction to oil.
Follow Robert Zevin on Twitter: www.twitter.com/ZevinAssetMgmt