There is a quarter hour podcast about the Lima climate change talks that is as good as it gets in terms of bringing complex issues to a bearable level of simplicity (spoiler alert: our maven of doom is at her best in terms of realism), and that dose of information pairs well with this dose by Michael Specter, the New Yorker‘s other “tough truths” guy:
Just before the turn of the millennium, I met a man who had recently invested a fortune in wind power. He said he wanted to do all that he could to slow the course of climate change. He was also convinced that, as the world began to run out of oil, alternative sources of energy would offer a unique entrepreneurial opportunity. “Oil prices will fluctuate for a while,” he told me. “But, eventually, they can only move in one direction. Up. Oil is a finite resource and, as supplies dwindle, the costs will have to rise. That will make alternatives like wind power much more attractive.”That sounded sensible, and, for the many people who have long argued that our addiction to oil and gas is destroying the planet, so did the much discussed concept of “peak oil’’—the theoretical moment when half the world’s oil reserves had been consumed and fossil fuels began to become scarce. The date of peak oil is hard to pin down, but most suggest we passed that point a decade ago. In a Times column titled “The Finite World,’’ Paul Krugman said that the magic moment had arrived in 2010.
High oil prices would force governments, corporations, and consumers to find another way to power the world. It was a nice dream, but it’s over now. We are awash in cheap oil. Propelled largely by a boom in domestic production, due to hydraulic fracturing, or “fracking,’’ and horizontal drilling, oil prices fell below $70 a barrel on Thursday—from a high in June of $112.12. Prices have fallen nearly every day for the past two months, and some economists predict that we will soon see oil selling for less than fifty dollars a barrel.
That’s good news for consumers; it means that they will have more disposable income. More gas means more travel and more spending, which our sluggish economy clearly needs. But the costs may be enormous. In 2008, a barrel of oil cost $147, more than twice today’s price.
Many economists and geologists predict that prices are unlikely to rise again soon. Fracking technology has transformed the United States from an importer of gas and oil to an exporter. In fact, the International Energy Agency has predicted that the United States will produce more oil next year than Saudi Arabia; we might even pass Russia, which, at ten million barrels a day, is the world’s biggest producer. (We already produce more natural gas than Russia.)
Fracking is not a magic fix, or even a benign one: the technology poses clear risks to the environment. It would be hard to make the case that it would be better to rely on Syria, Russia, Iraq, or Saudi Arabia to fuel the nation, as we have in the past. We have endured unpredictable oil prices since OPEC imposed an embargo on the U.S. soon after the 1973 Arab-Israeli war. That punishment led to the first oil “shock,’’ and, since then, prices have been influenced by politics as much as by demand. But the cheaper fossil fuels become, the more challenging it will be for cleaner forms of energy—like solar and wind power—to become competitive.
Many environmentalists had assumed that if neither fear nor reason helped us to lessen our reliance on oil, then at least we could count on scarcity. But scarcity is not an economic or environmental policy…
Read the whole post here.