The price of oil: the future has arrived

Posted November 7th, 2007 in Blog

Fostering Ecological Hope
Today from Margaret Swedish:

[WARNING: Today's post is on the lengthy side.]

The price of crude oil passed $98 per barrel this morning on its way to, where? by the end of the day. The day that many have predicted for a long time will arrive soon — the day we reach $100 and the world changes forever.

Well, it already has as the price of oil has doubled since the beginning of this year. We have wondered for weeks why the price at the pump has not been matching the rise of crude — why hasn’t it also doubled — but that discrepancy appears to be ending swiftly — just in time for the holidays.

So gas has gone well over an average of $3 per gallon across the country, and it is happening at a time of year when usually the opposite is happening. Said Erin Roth of the Wisconsin Petroleum Council, quoted in an article in this morning’s Milwaukee newspaper, entitled Grim buyers absorb rising gas prices:

It’s the first time I’ve seen where the two curves [the price of crude and the price at the pump] didn’t follow each other for a long time. The market is now readjusting as refiners and retailers adjust for the additional cost for crude oil.

In other words, this escalation in price is barely getting underway. A good time, friends, to change life habits and return the holidays to the family-oriented, restful, bonding, community, simplicity sort of time that once marked Thanksgiving and Christmas. We won’t be able to afford anything else, what with our mortgages stretched or in crisis, our credit card limits at their max, our monthly payments on everything clobbered with interest rates and higher fees, etc.

(Will anything stop us from our unsustainable and unaffordable consumer ways?)

Imagine the impact these oil prices will have on the price of everything, since there is no consumer good that does not involve oil either in its manufacturing or transport.

Once again, this has been predicted, and we have done little or nothing to prepare. Here in Wisconsin, I am impressed by the number of gas guzzling vehicles on the road. Here around Milwaukee, I am grimly and somberly impressed by the utterly irresponsible car-dependent exurban sprawl that continues apace, as affluent, and, let’s say this, affluent white folks, flee the city.

Many of these same folks also oppose building mass transit systems out to their burbs, for fear — once again, can we just say this? — of who might ride from the city out to their affluent communities.

The Milwaukee Journal Sentinel’s Metro section article containing the above quote notes some of the local jitters and frustrations. One of the fastest growing high-end development areas in the region is around the town of Oconomowoc. It is completely car-dependent and for some time many of us have been trying to say that this type of development is not sustainable.

Here is one local view of this insanity from a guy named Steve Hiniker, a cleverly titled article, The Dangers of Autobesity, on The Urban Conservancy website.

Last year, Wisconsinites racked up an unbelievable 60 billion miles behind the wheel. Each one of us drove, on average, twice as many miles as drivers 25 years ago. We spend, on average, $7,000 a year per car on our addiction - plus parking costs.

Our driving addiction is costing us lives, dollars and destroyed communities every day….

Like most addictions, we are often oblivious to the consequences our habit has on others. Motor vehicles are the principal cause of ozone air pollution and contribute to about one-third of our global warming gas emissions. Highways have destroyed vibrant neighborhoods throughout the state, and more neighborhoods are at risk because of expansion plans. Farmland, wetlands and cultural resources are all-too-frequent victims of road expansion.

Our fixation with driving leads us to build new housing, shopping centers and job centers that are entirely auto-dependent. It is no longer an option to have a car in the typical new development in Wisconsin; it is a requirement….

One could just consign that approach to development to our human stupidity if it wasn’t also tragic, leading us to economic collapse in many of these kinds of communities across the country over the next couple of decades.

Here’s what another expert, Fatih Birol of the International Energy Agency, had to say about the impact of rising oil prices on the global economy, this time as quoted in the New York Times in an article 6 days ago, Energy expert sees hazard in costly oil:

We may see very high prices that will come to a level where the wheels may fall off. I definitely believe that if prices stay at these levels, there will be a slowdown of the global economy.

Back to the Journal Sentinel Metro section article, a man who retired five years ago and moved to Oconomowoc has kids that live 30 miles away in Menomonee Falls. He’s feeling the bite of gas prices.

When you have to drive 30 miles to visit the kids, it adds up, but what can you do? You have to drive a car.

Yes, Mr. Grabko, you have to drive a car if we have built and continue to build communities where you have to drive a car. And that is what is wrong with us, wrong with the choices we make about how to live, as if these limits will not ultimately catch up with us.

Meanwhile, the front page article, Economies quivering from petroleum prices, makes note of another phenomenon represented by rising gas prices. The US, as you know, is no longer a major producer of oil. We have pretty much tapped out our fields. The steep rise in prices is creating enough financial incentive to go back and pump out what is left, but that won’t last long.

Global trends being what they are, the countries with oil are the ones that will be sitting on a vast store of wealth. Let’s remember who they are — Russia, Venezuela, the Middle East, for example. These countries will determine how the global economy goes because oil is still the blood that runs through the veins of that economy. Meanwhile, because we did not wean ourselves from oil in time for this crunch, we will be dependent on the suppliers, just as they need us as consumers. Just imagine the conflict and tension in the days ahead, the wars for oil, for example.

That’s because, 30 years ago, we were stupid. Thirty years ago, when President Jimmy Carter, seeing this future, tried to start the policy dialogue on oil and our energy future, this country elected “Morning-in-America-Ronald Reagan.” He was much cheerier about our future.

Now we come to this not at all prepared for the impacts. These prices are being driven in large part by the rising economies of China and India, whose economic growth far outpaces ours and as they make greater and greater claims on the world’s oil supply. This is also driving global warming, of course, and so you can see how we are headed for a very turbulent period in human history.

The US, with 5 percent of the world’s population, consumes 25 percent of the oil supply. We are facing a great comeuppance from letting the oil industry control our nation’s energy policy. This, of course, was reaffirmed by Cheney’s secret energy policy meetings way back in 2001, and by the rise of oil people like George Bush and Condie Rice into positions of power in our nation’s politics.

We have all chosen this, all of us, by not trying to make the changes in time to save us from this harsh encounter with reality. In a decade, more or less, world oil supply will peak. Then we could be talking about something far more than $100 per barrel.

Remember this, too. While affluent folks out in the car-dependent suburbs and exurbs grumble about paying more at the pump, the impact on poor people this winter could be quite severe. While we let development role along for those who can afford it, poor people who depend on heating oil to stay warm in the winter could be in serious trouble, either through inability to afford rising prices, or because of supply problems.

Some expect the price of gas to hit an average $4 per gallon by Christmas. We’re in trouble folks. Can you feel it — these many impacts of our way of life coming down on us all at once? What are we going to do, not just in our personal lives, but as a society, as a nation?

So, for God’s sake, let’s do something different this time around. As we face the shock of rising prices for everything, let’s also take a deep breath, ponder these things, and then let’s begin to figure out how we are going to live differently, and very soon.

[tags] record oil prices, price of gas at the pump, four dollars per gallon, world oil supply, exurban development, car-dependent communities, the urban conservancy[/tags]

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3 Responses

  1. dude

    Well the united states and the uk have the second largest oil field surrounded.Iraq to the west of Iran and afghanistan to the east.With the united states pulling every trick in the book and using its stooge the united nations (united states imperial senate) to get its own way again,things are not going to be pretty for both oil prices and the world in general.Things will go wrong this time because if you know anything about the nuclear non proliferation treaty you will know that iran is completley in the right and has done nothing wrong.dont get me wrong im british and proud and have no time for me armedinajad and his cronies.The point is ,its now extremly obvious that the united states warmongering is entirely about oil.thats fine but what with china and india and to a certain extent the russians with there finger in the iranian pie ,things could and i think will get out of hand very quickly

  2. The price of oil - “…we are headed toward really bad days” : Spirituality and Ecological Hope

    [...] tell a voter that they can’t simply go on as they please any more. No one wants to tell that guy in Oconomowoc, Wisconsin, that we mentioned the other day, who complained about the rising cost of the 30-mile trip to visit his kids, that the problem is [...]

  3. Steve

    Dude hit it bang on the nail, and so does this article.

    Iraq being for WMDs was a joke on the world, and Bush and Blair got away with it.
    Fool us once, shame on you.

    But Iran, despite me also not liking the way their way of life, has done nothing wrong.
    Bush trying to poke the fire slowly and steadily all the time is a joke and a blatant propaganda slur-machine intended to build up enough hate against iran the same way they already had against iraq.
    Enough for the majority of ignorant US voters to say ‘meh why not’ to war against them for their Oil.
    Problem is, the rest of the world has caught onto this now in the information age where we can all share info.
    Many folks wont stand it anymore.
    Fool us twice, shame on us.

    This dispicable way of treating other countries then backfires in a dramatic way for the Nuclear Prolifiration people, because it ENCOURAGES other nations to want Nuclear Weapons. A finishing line to get over (like North Korea currently), a “we’ve made it over the nuclear line, the US wont make any excuse to attack us now.”

    US folks wonder why the rest of the world hates them these days. It’s because with the fall of russia it’s the only schoolyard bully left, and it’s greed is going to bite it in the ass soon if it doesn’t change its ways.

    Oil is the problem, and greed the catalyst. Compounded with a capitalistic society, it’s a tough hole to dig out of.

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