EnergyInsights.net 
Rising oil prices seen as 'peak' opportunity 13-05-2008 8:08 pm
April 27, 2008


MONTPELIER – The number of political screeds against "Big Oil" seems to be rising about as quickly as prices at the pump these days.

The rhetoric predictably casts local motorists as victims of a price-fixing scheme designed to reap multi-billion dollar profits for companies such as Exxon-Mobile.

Sen. Bernard Sanders this week condemned "outrageously" high oil and gas prices and called for a windfall profits tax on oil companies.

About two weeks ago, surrounded by reporters in the Statehouse, a group of Vermont senators announced a resolution directing Vermont's Attorney General to open a criminal investigation into illegal price-fixing by "big oil" companies.

And earlier this year, Rep. Peter Welch, flanked by a Vermont truck driver paying $4 per gallon for his diesel, demanded that Congress close the "Enron loophole" that allows for unregulated offshore oil speculation, a practice that by some measures adds as much as 25 percent to the price of sweet crude.

Then there's Richard Heinberg.

All that rhetorical bluster, however well-intentioned, misses the point entirely, according to Heinberg. The high gas prices prompting a shift in consumer behavior, he says, could be the precursor needed to wean Americans off their addiction to a resource in irrevocable decline.

"Sometimes crisis is opportunity," Heinberg says. "And I think we'll be all right if we see it that way."

Heinberg, author of eight books, including four on "peak oil," is a motivational speaker of sorts. Espousing the benefits of early action against the impending fossil fuel crisis, Heinberg believes, may encourage the kind of cooperative planning that brings out the best in human nature.

"It could be a great boom for society," Heinberg said at a Statehouse hearing Thursday. "We could have a greater sense of community, more connection with the natural world, more fulfilling work."

Historically, of course, increased demand for shrinking resources breeds war, not peace. And after his talk with lawmakers Thursday morning, the Santa Rosa, Calif., resident conceded that the future of energy is likely more apocalyptic than utopian.

"The most likely scenario is global war over dwindling resources," Heinberg said. "If we're going to avert the likely scenario, it means we need to act together in ways that are unfamiliar and uncomfortable."

If Heinberg is correct, and he is not alone in his projections, the world will see oil production drop irreversibly beginning sometime in the next decade. The supply-demand ratio that has driven up oil prices tenfold in the last decade, he said, will only grow more disproportionate in coming years.

"Peak oil is not a theory, it's simply an observation that the production of non-renewable resources always follows some kind of roughly bell-shaped curve," said Heinberg, noting that oil is on the declining end of that curve. "Demand is growing but supply isn't … total available world exports could collapse in the next 10 to 15 years to a very low level."

Heinberg isn't so upset about high gasoline prices, which hit a national average of $3.59 Thursday. According to a study by economic consultants for the Legislature, Vermonters will spend $800 million more on liquid fuels this year than they did five years ago.

While targeting the companies that sell oil has become de rigeur for Vermont statesmen, Heinberg says the more appropriate battle cry offers a decidedly less attractive political platform.

Calling for onerous changes in personal behavior generally doesn't win many votes, a fact Heinberg attributes to politicians' reluctance to attack the underlying problem, rather than its symptoms.

"Policy makers tend to shy away from tough decisions," Heinberg says.

Heinberg says the situation demands the same kind of multi-billion dollar federal investments used to fight World War II – an event he says can be aptly compared with the risk posed by shrinking oil resources. Even with the government-aided proliferation of wind, solar, tidal, geothermal and other renewable energy sources, he says, the crisis will require more austere lifestyles from Americans who have grown accustomed to their largesse.

"Even with the development of new technologies, we'll never have as much energy resources as we have in the fossil-fuel era," Heinberg says.

More local farming, dramatically less driving and the abolition of things as mundane as plastic bags, he says, are all necessary concessions.

"We'll certainly see a less mobile society," Heinberg says. "Cheap air travel is soon going to be a thing of the past. Air freight and tourism are going to be pretty hard hit."

Rep. Warren Kitzmiller, a Montpelier Democrat, said he agrees with Heinberg's assessment.

"I absolutely believe in the truth of what he told us," Kitzmiller said. "The post-peak era is coming. The question is when and how severe will the changes be."

Even so, Kitzmiller said, that knowledge isn't likely to engender the kind of unpopular political stands needed to measurably improve Vermonters' preparedness.

"He said it well when he observed the reluctance on the part of legislators, both state and national, to do much about it," Kitzmiller said. "The tendency is to stick our heads in the sand and hope it won't show up."

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