End Of Cheap
Oil Is A Blessing
By Mitchell Anderson
15 April , 2005
Toronto
Star
Enraged about the high price of gas? A
trip to the corner store might provide a much-needed reality check to
the indignation over excessive fuel costs. Have a quick look at what
you can buy for a dollar a litre. Milk? Nope. Bottled water? Not likely.
Roofing tar? No way. For all the shrill outrage about rising prices,
gas remains by far the most outrageously underpriced commodity in the
world.
Consider the long
journey that a litre of gas makes from faraway oil fields to your local
filling station. Oil deposits must first be found often on the
other side of the world or on the bottom of the ocean.
After massive infrastructure
is developed, oil is extracted, transported across the globe, refined,
and trucked thousands of kilometres to where you live. Let's not forget
the massive military expenditures from countries like the U.S. to secure
foreign oil supplies and the political and human turmoil that this creates.
Considering all that, why then should gas cost about half as much as
bottled water?
One reason is "perverse"
government subsidies that promote things we are actually trying to discourage,
such as fossil fuel consumption.
Last year, Ottawa
shovelled $5.9 billion of your tax dollars to the fossil-fuel industry.
This is far larger than current government support for sustainable energy
technologies that will no doubt become the cornerstone of our future
economy.
In the absence of
either political will or personal restraint, we should be grateful that
high gas prices might save us from ourselves. For instance, there is
little doubt that governments would continue with perverse subsidies
for fossil fuels, imperilling the future of the Canadian economy by
hitching our wagon to the dying horse.
Likewise, we would
continue to endanger the future health of our planet by driving vehicles
that actually get far worse mileage than the Model T did for the simple
reason that gasoline happens to be cheaper than water.
Artificially low
gas prices have long stifled conservation efforts and alternative technologies,
while fuelling a boom in vehicles so grotesquely inefficient that I
suspect our children will someday marvel at them in a museum.
SUVs are a fine
example of the irrational behaviour in the waning days of cheap oil.
The only reason such gas-guzzlers are even legal is that technically
they are considered "farm implements." Rather than investing
in innovative technologies that would produce more efficient cars, automakers
have invested in highly successful lobbying efforts in order to ensure
that they don't have to.
The recent accord
between the federal government and car makers is a good case in point.
After literally years of gentle coddling from the federal government,
the automakers agreed to voluntary efficiency requirements that will
actually allow emissions to rise by 18 per cent between 1990 and 2010.
The last time Ottawa
signed such a non-binding agreement in 1982, it failed completely to
improve the average fuel efficiency of Canadian vehicles because there
was no legal requirement to do so. It is noteworthy that governments
possess a unique power called "regulation" that makes such
protracted and fruitless negotiations unnecessary.
Not to fear, the
market of Adam Smith will succeed where all else has failed. Higher
fuel costs will foster much needed interest, innovation and investment
in conservation and alternative technologies.
Some oil companies
may turn their massive resources to developing these clean-energy alternatives
rather than choosing to go down with their ship. A study by Shell International
found that renewable sources could supply 50 per cent of the world's
energy needs by 2050.
Rather than posing
for photo ops with the car industry, the federal government should seize
the opportunity to make some long overdue policy changes. These include
shifting gasoline tax revenue to public transit, increasing green infrastructure
investment in cities, and expanding investment in renewable energy
the fastest growing energy sector in the world.
A side benefit from
this vast global shift away from oil is the small matter of the fate
of the planet. Aside from a few well-known pseudo-scientists shilling
on behalf of big oil, virtually the entire scientific community is united
in the knowledge that climate change is real, it is happening right
now and that it is very, very dangerous.
Some, like our beleaguered
farmers, should be insulated from ballooning fuel costs.
As for the rest
of us, rather than griping about how much it costs to top up your SUV,
consider instead the fact that you might well have been an idiot to
buy such a vehicle in the first place. Times change and we must change
with them. The end of cheap oil is a blessing and we should welcome
it.
Mitchell Anderson
is a freelance writer who lives in Vancouver.
© 2005 Toronto
Star