On Sunday I went out again, this time doing 75km on a broken spoke. Took it easy on the downhills, HR 129 average, and an overall time of 2:45.
Like Climate Change, most of us continue to snore through endless fossil fuel warnings
"My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."
--popular saying in Saudi Arabia
It's difficult to make sense of the fact that, with so much cogent information at our disposal, we continue to ignore all these messages. With enough circumspection the reason for our prolonged ignorance becomes more self evident. We're getting mixed messages, some from those who are well-intentioned but nevertheless incorrect, and some from those knights of industry who want infinite demand (despite finite supplies) whatever the cost.
But there's also something wrong with our psychology, because most people who read newspapers ought to be reasonably intelligent, right? Well it seems that a substantial fraction of people believe simply what they are told to believe. I ardently hope that citizen-based Web sites like this one will begin to change this ridiculous psychology. Where people on the ground can investigate the spin fed into media channels and declare it counterfeit or at the very least, challenge and prove it is defective when and where it is.
In terms of fossil fuels I believe our inability to see reality is a simple case of having a paradigm of insufficient scale. That means we're seeing the trees individually, or as a hillside, but never as a whole forest. Here's what I mean. In one sense, perhaps the best sense, we tend to make our assessments on fossil fuels based on one indicator: the oil price. And yes, it provides a fantastic barometer for what is going on in liquid fossil fuels, but with this limitation: it is simply a snapshot. The price can dive or rocket in the next day, or hour, or second.
So one way to see beyond the "tree" in this sense is to take a wider view: compare the spot price of Brent crude, say, over a full year. Let's do that right now. Today crude is around $53.40 a barrel. It's dropped in recent times to a floor of about $50 and has since begun a gradual ascendancy. In 2006, in January, the same thing happened, except that oil moved in a higher range, from around $60 to $66. By mid February 2006 oil was down to $57, and then shot up, in two progressive peaks to first $75 at the end of April, then after falling back, shot up to $78 in two peaks during the American driving season in late June and July. After that the price fell dramatically, with the exception of a small spike in December.
It's against this backdrop, and similar cycles (higher prices associated with cold northern hemisphere winters, and the even higher prices associated with the U.S. summer driving season) that we need to view daily spot prices. With this in mind it's clear that oil is cheap right now, and in comparison to the cycle, it is cheaper by at least $10. Why? Well, thanks to relative geopolitical stability (which now demonstrates some instability once again in Iran) and an unusually mild winter (thanks to climate change), oil prices have remained fairly flat.
A low oil price at a certain time shouldn't provide immunity (a sense of security) against oil alarmism. Many writers make arguments about tree spacing, and the rate of tree growth, but avoid looking at the forest as whole. Observers praise the resilience of the global economy, and illustrate this by citing inflation, or the lack of inflation given bounces in the oil price. We hear endless views about supply and demand factors, about elasticity and absorption effects. Yes, they're relevant, but the underlying paradigm, the atmosphere of the whole forest is far more important.
Here are a few paradigm shifters then:
1) World oil supply peaked at no more than 85mbpd, but the value for total world oil production was less in 2006 than 2005, although demand continued to increase.
2) Continual depletion of the world's largest oil wells, including Ghawar and the North Sea Fields, and America’s now meager Gulf reservoirs.
3) No significant new discoveries of oil despite intense exploration and hype.
4) Against this background rampant demand for oil users (incredible, record motor vehicle and aircraft sales in countries from China to South Africa).
5) And in contrast to Auerswald's invisible inflation, in South Africa at least, food price inflation has jumped 12 percent.
I'm guessing that food price inflation is not merely the case in South Africa; I'm guessing it's the case everywhere. I know that food prices for example in Korea (where I lived for several years), and other countries like the U.K. (where I also lived), where the bulk of fruits and vegetables have to imported, are probably seeing much greater inflationary effects in terms of food than in South Africa, where they are produced locally.
So what is the invisible hand behind these increased food prices? I'd say it's a combination of three factors, and all these factors are linked together. Most obviously, fuel prices underpin how expensive it is going to be to cultivate and harvest crops, so there is your first input. Then, weather affects crop viability, so climate change is already having an impact on food prices. And the third is a consequence of both, and that is the choice to allocate a proportion of crops to the making of ethanol. This necessarily means allocating a proportion of a crop away from the consumption of it as food, and towards the consumption of it as a fuel (for cars). We're likely to see this dilemma increase until it reaches the inevitable point: a stalemate: where the cost of food is simply too high to make the allocation of ethanol (biofuels) cost effective.
Which will bring us to the inevitable question: what alternative now? And of course we don't really have one. We don't have an alternative to run suburbia and the world's highway systems on the scale that we're running it on anything else but fossil fuels. There's your forest.
Plenty of writers eloquently point out that our technology will save us. One writer recently cited cold fusion as a solution. I agree. But maybe 20 or 30 years from now, perhaps more. Quite a lot is going to happen in that period, and it's likely that the next two or three decades geopolitically are not going to be conducive to doing highly unstable experiments in laboratories all day. There are going to be plenty of other crises to deal with associated with simply not having enough energy for everyone, and the national bickering that goes with that. Going nuclear is more realistic, but although it addresses simple energy issues, it doesn't quite address the easy motoring issue.
On the demand side, people argue that efficiency (through technology) is allowing us to ameliorate our demand. Well, the Toyota Prius is an example of another tree. The Prius may be fuel efficient once it is on the road, but its key components are far less durable (it has two engines after all), harder to recycle and more energy intensive to make in the first place. So step back a little from the wonders of our genius, and see the forest. It's a humble but powerful organism, and we will be humbled by our failure, this whole time, to understand both the forest and our place in proportion to it.
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