Wednesday, September 19, 2012

The Peak Oil Crisis: A New Malaise

It has now been more than 33 years since Jimmy Carter's famous "malaise' speech given in July 1979. As this speech is often cited as the beginning of the end for the Carter Presidency, no politician in the intervening years has seen fit to offer anything but an optimistic, upbeat outlook on the course of the nation and its economy.

While looking across the global landscape, it is easy to conclude that the situation in 1979 was only a shadow of what we face today. The world's economy is stuck in a slump which shows every sign of continuing indefinitely or getting worse; our climate is spinning out of control and some are seriously talking about the end of life on earth; public debts are skyrocketing and governments around the world have turned on their printing presses to "stimulate" (read inflate) their way out of current economic troubles; the internet has spread so much information to so many that much of the world is inflamed over real or imagined slights; mobs are running through the streets and bombs are going off faster than can be counted.

Closer to home we have very high oil costs. Although rarely mentioned by the media or public officials, persistent $4 gasoline, and its equivalent in other fuels and in other countries, is slowly eating the heart of our transportation and energy-centered civilizations. Despite much optimism from the financial press, realistically the outlook is not good.

"Recovery" either by Keynesian stimulus or tax cuts seems highly dubious. Some are calling for new models of economic organization, ranging from China where the key levers of economic power are in the hands of the central government to total laissez-faire. Remove all government regulation and let free enterprise run everything without government interference and minimal taxes. The real question, however, is just how does the world get itself out of all this mess? Or can it?

There is a report out of Cambridge University this week in which a leading arctic specialist says the polar ice cap will be totally melted in three or four year. This in turn will lead to the thawing of the arctic permafrost and the release of much methane – conceivably a fatal dose. This suggests that the real hardships that will come from global warming may be many decades closer than generally believed. Recent warnings from the UN about impending food shortages echo concerns that we may not have decades to argue about growth vs. the environment in the face of the reality of global warming.

For hundreds of thousands of years, the story of mankind has been one of evolving technology. At first new technologies came very slowly – tools, cutting edges, the wheel – but in recent centuries the pace of technological change has been breathtaking. While there have been great "benefits" to all this technology, it has brought with it serious problems such as overpopulation, global warming, and growing cultural conflicts. More


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