The slippery slope is slick with cheap oil

that 1.51 you see is $8.63 a gallon US!!

At 1.51 Euro per liter, gas is $8.63 a gallon over here in Europe.  Somehow, in spite of this, and in spite of the challenges presented by the Euro due to the crisis in Greece and other countries, the German economy is doing well.  Economic growth, it appears, isn’t always tied to cheap oil.

How has this happened?  In part it’s happened because the German government has seen the writing on the wall, the reality that black gold won’t pour from the ground forever, that reduced supply means a higher price.  They, along with the rest of Europe, have also believed the overwhelming science that ties Co2 emmissions to greenhouse gases, and greenhouses gases to global warming.  As a result, they’ve used the power of the centralized government to invest in rebuilding the energy infrastructure of the country, subsidizing and favoring alternative energy.  This led to a 50% drop in the price of solar panels in Germany because so many people have participated – (something about higher volume leading to lower prices)

As a result of these and other policies related to resource use, Europeans use 10-15 acres of resource per person, depending on the country.  The USA, in contrast, needs 24 acres per person, on average, to support our lifestyle.  What do we get for those extra 14 acres?

1. We get addicted to a an economic model that demands we buy more stuff to keep the flames of commerce burning.  This need to buy means we need cash, so now we’re releasing our strategic energy reserves to cheapen gas, in order to address the problem that people don’t shop enough stuff.

2. We get to lead the world in consumption of energy and the contribution to the greenhouse gas problem.

3. We get to rank #23 on the “happiness” scale, while countries like Colombia and Puerto Rico, Austria and Iceland, with much lower resource consumption made the top ten.  Argue about the happiness scale if you like, but at least admit that once basic needs of food and shelter are met, happiness is tied to a host of other factors, most of which can’t be purchased in a store.

I’m visiting a country where public transportation, walking, and biking are all high priorities; so is building an alternative energy infrastructure.  Germany, and the rest of Europe have their share of problems:  immigration challenges much deeper than ours, economic inequities in the EU, and more.  But they’ve managed to see the writing on the wall when it comes to C02 emissions and the end of easy oil.

They’re making hard choices – taxing “old” energy sources in order to subsidize new ones.  The US?  We’re releasing our strategic oil reserves to cheapen gas so that people will go shopping.  Release the reserves if you must.  Raise the debt ceiling if you must.  But please:  make a plan! Releasing these reserves without addressing either a long term energy plan or a long term economic recovery strategy is like refinancing your house to pay the utility bill; it relieves the pain for minute, but the mess that got you there remains.

 

About Richard Dahlstrom

As Pastor of Bethany Community Church in Seattle, Richard teaches with vision of "making the invisible God visible" by calling people to acts of service and blessing. It's working, as a wilderness ministry, homeless shelter, and community meals that serve those living on the margins are all pieces of Bethany's life. "We're being the presence of Christ" he says, "and inviting everyone to join the adventure." Many have, making Bethany one of the fastest growing churches in America in 2009 according to Outreach Magazine.

  • sp

    I would be careful about correlating the rebound in Germany’s economy to its lower consumption of oil or natural resources per capita, or its “sustainable-stewardship” attitude.

    I would argue that Germany’s economic rebound has not come from more people riding bicycles, but instead, due to the fact that they are one of the major countries supplying industrial machinery and equipment to the emerging markets such as China, etc. You know, those countries who seem to have this insatiable demand to become consumers just like us in the West?

    I’m not disagreeing with your end point (be good stewards, be wary of consumerism, etc), I just think the pieces to the puzzle on this post, aren’t causal.

    If there is more bicycle riding there, it only makes sense. Their pocketbooks getting crunched determine behavioral change.

    And for whatever alternative energy sources may ultimately make sense to the energy question, they will become self-evident because they will NOT REQUIRE subsidies. Take ethanol for example. The only reason we’ve used corn to the degree that we have, is because of subsidies. Oh, and by the way, the unintended consequences of that caused the poorest of the poor to suffer to an even further degree, by food prices skyrocketing.

    Subsidizing something that can’t viably stand on its own two feet economically, is a bad idea all around. And this is where we must trust the markets. They are far more efficient and less-biased voting mechanisms than any politicians, interest groups, or mobs, could ever dream of being.

    If you want ultimately sustainable solutions, politicians and governments need to STOP meddling, not increase it.

  • raincitypastor

    I agree with you completely on the subsidy problems related to ethanol, and the impact on the poorest of the poor. But as you state regarding my argument, I don’t see the notion of subsidy per se as causal. In fact, Germany has now reduced the tax subsidies on the purchase of solar panels because the increased production (which came about because of subsidized incentives) has reduced the price per unit, making them more affordable for everyone.

    On the other hand, we subsidize, and thus incentivize, large oil companies and industrial farms, thus tipping our hand in favor of a paradigm favoring continued consumption and growth.

    • sp

      thanks Richard. To clarify, I’m saying that I don’t think Germany’s economic rebound can be tied to its relative lower reliance on oil/natural resources (vs countries such as the US). Sorry for any confusion: I wasn’t believing you were trying to show causality from subsidies (per se).

      I’ll try to put my opinions aside in saying this: if you want high-priced oil, you will get a lot of various results…ONE OF WHICH will be an even wider – materially so – gap between the rich and the poor.

      The prices of food and oil going up doesn’t affect the rich all that much. It drastically effects the poor.

      So, whether it be subsidies (government deciding they want to give), or taxes (government deciding it wants to take) — you get a host of negative consequences associated with meddling.

      I don’t believe those consequences are more attractive than the negative consequences associated with what a free-market would offer. I believe they are less.

      • http://bluedrew.wordpress.com Andrew Viertel

        There is a reason the “invisible hands” are invisible. They don’t exist. The behavior of the market is the aggregate of the decisions of producers and consumers. Those decisions are made in consideration of all sorts of factors, some tangible, some not. Factored into those decisions are things like government policy (active or passive). Just as individuals have the ability to decide whether and how to respond to a given situation, so governments make decisions about whether and how to intervene. The totality of government decisions is what makes up government policy. The question is not whether our government should have a policy that impacts markets. It does. The question must be about the quality of that policy. We elect leaders to lead. They do so by enacting policy. What do we want that policy to be?

      • sp

        if the US has a comprehensive energy policy, you may want to inform our President of that. As a Country, we have talked about having a goal of getting away from foreign sources of oil since at least the late ’60s. Every President from there ’til now has pontificated as such, on that particular subject.

        Maybe once we landed on the moon, they figured they had that as a new hope, so they just choose to say the words instead of actually show resolve to execute on those words.

        Our comprehensive energy policy is focused on expounding massive amounts of hot air. Perhaps that explains this global warming thing…

  • http://bluedrew.wordpress.com Andrew Viertel

    My point is that we have made decisions that constitute our current (bad) energy policy. We subsidize oil and ethanol. We allow the energy companies to bribe our politicians and put out false science about global warming. The invisible hands are not keeping us from investing in renewable. Decisions by our business and political leaders are.

  • alisha

    I applaud Germany for taking a lead on many policy issues related to sustainable energy. Wherever America is on energy policy at any given moment, we all as individuals should be doing our bit to decrease our personal reliance on oil. I’m trying not to be that American who needs 24 acres to sustain my lifestyle, but it definitely takes intentionality. Thanks for sharing your thoughts on this Richard!

  • alisha

    I applaud Germany for taking a lead on many policy issues related to sustainable energy. Wherever America is on energy policy at any given moment, we all as individuals should be doing our bit to decrease our personal reliance on oil. I’m trying not to be that American who needs 24 acres to sustain my lifestyle, but it definitely takes intentionality. Thanks for sharing your thoughts on this Richard!

  • sp

    It seems the central point of this thread is ultimately an argument for central planning.

    I highly recommend Daniel Yergin’s “The Prize” as a GREAT read on the history of oil, and how its importance has morphed over time.

    Another treasure of Yergin’s that I would even more highly recommend, especially as a study on the virtues/perils of central planning vs. decentralization, is “The Commanding Heights: The Battle for the World Economy”. This has been made into a 6 hour DVD, and it is fantastically good. Right around the turn of the millennium, PBS did a week long segment where they repurposed the entire thing. They interview some of the worlds top economists, everyone from the Chicago School, to Jeffrey Sachs, to Hernando de Soto, etc. Fascinating documentary.

    Nothing about this discussion is simple, but history may be a guide. If you’re really interested in this stuff, you’ll love this documentary…and it will give insight to this discussion.

  • http://bluedrew.wordpress.com Andrew Viertel

    I think the argument is for realizing that we are interconnected and we need to make community decisions on issues that impact the community. Individualism only goes so far in an interconnected world. The way to make decisions about the commons is through the government. It is perfectly valid, in a dempocracy, for our elected representatives to decide that we need to shift our economy to one operated sustainably and with renewable resources and to enact policy to that end. The battle cry of the American Revolution wasn’t “No taxation. It was “No taxation without representation.” Freedom does not mean no government. It means that we have a goverment that we elect to act in our interest. I think a compelling argument can be made that it’s in our interest, in many, many ways to skew the market to favor green technologies and renewable resources.

  • sp

    I’m not arguing validity, or invalidity, on the part of our governments. They are elected officials, so we have validated them. Certainly no argument there.

    But what of the issue of responsibility? The responsibility to make decisions based on what we KNOW. What we can rely on. Using history as a guide. And the issue of responsibility to NOT make policy based on speculation, philosophy, ideology, or certainly, fear of our future. The responsibility to maintain objectivity — even if you might be Malthusian to the core! And, responsibility on the part of our legislature HAS TO also include an understanding of the law of unintended consequences! Something they did not, apparently, consider when they chose to subsidize ethanol (as an example). Kudo’s to them, at this point, for reversing their policy on that. Who knows how many more poorest-of-poor people died over the past few years because of their IRRESPONSIBLE policy in the first place.

    That’s why it is called the “Peak Oil Theory”. And rightly so, because it it, only a theory. And even while most politicians seem to view global warming as a fact, responsibility should guide this process to look at all the sides of this global warming hypothesis, using all available science. Which is not happening.

    There is zero scientific evidence that what we have observed in global warming, is anything outside of the realm of normal cyclical ebbing-and-flowing of what Planet Earth has done over the course of large amounts of time. Especially for “old earth” believers, it’s telling that they are reluctant to see this. A scientific study of the Sun’s activity / sun-spots, is a great start to this learning curve. Yet, how much do you hear that story being put forth vs. the story of how evil those who driver Hummer’s are? (yet, we are in love with China…and welcomed them into the WTO in spite of MASSIVE human-rights violations…which continue to this day! And they are one of THE MAIN contributors towards massive industrial and commercial CO2 emission spewing!)

    I’m talking about RESPONSIBILITY here. Validity is the unfortunate reality, when we have uneducated and disinterested legislators running the show.

    /soapbox

    • http://bluedrew.wordpress.com Andrew Viertel

      What we know is that the scientific community has been looking into climate change for a long time. They’ve used direct surface observations, satelite readings, ice cores, bore holes, tree rings, sea levels, glacier measurements, polar ice measurments, atmospheric readings, and probably a dozen other methodologies. They’ve explored the question of solar radiation and dismissed it. All the evidence consistently shows increases in CO2 concentrations and temperature that fall outside the parameters of any natural cycle. The only variable that has shown the ability to create such variations is human activity, specifically our fossil fuel-based society. This is not speculation, ideology or anything other than scientific evidence. When confronted with overwhelming evidence of oncoming catastrophe, the responsible thing is to seek and implement the solutions that have the best chance of averting said catastrophe.

  • sp

    I’m not arguing validity, or invalidity, on the part of our governments. They are elected officials, so we have validated them. Certainly no argument there.

    But what of the issue of responsibility? The responsibility to make decisions based on what we KNOW. What we can rely on. Using history as a guide. And the issue of responsibility to NOT make policy based on speculation, philosophy, ideology, or certainly, fear of our future. The responsibility to maintain objectivity — even if you might be Malthusian to the core! And, responsibility on the part of our legislature HAS TO also include an understanding of the law of unintended consequences! Something they did not, apparently, consider when they chose to subsidize ethanol (as an example). Kudo’s to them, at this point, for reversing their policy on that. Who knows how many more poorest-of-poor people died over the past few years because of their IRRESPONSIBLE policy in the first place.

    That’s why it is called the “Peak Oil Theory”. And rightly so, because it it, only a theory. And even while most politicians seem to view global warming as a fact, responsibility should guide this process to look at all the sides of this global warming hypothesis, using all available science. Which is not happening.

    There is zero scientific evidence that what we have observed in global warming, is anything outside of the realm of normal cyclical ebbing-and-flowing of what Planet Earth has done over the course of large amounts of time. Especially for “old earth” believers, it’s telling that they are reluctant to see this. A scientific study of the Sun’s activity / sun-spots, is a great start to this learning curve. Yet, how much do you hear that story being put forth vs. the story of how evil those who driver Hummer’s are? (yet, we are in love with China…and welcomed them into the WTO in spite of MASSIVE human-rights violations…which continue to this day! And they are one of THE MAIN contributors towards massive industrial and commercial CO2 emission spewing!)

    I’m talking about RESPONSIBILITY here. Validity is the unfortunate reality, when we have uneducated and disinterested legislators running the show.

    /soapbox


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