Once again OPEC is trying to stem the decline of oil prices, in-evitable in the long run; so this is perhaps a good time to review the lessons that OPEC and oil has taught us over 15 years.
First, a monopoly is always coercive and unstable unless it can enforce its rules. That seems to be the case only when a government uses its force against its own citizens
¾as is the case with the US Postal Service, protected by government guns against teenagers gainfully delivering Christmas cards and against other felons who would usurp its monopoly status. The guns of the Mafia families, on the other hand, may protect them from the law and from legal competition, but not from each other: the very craving that made them form the monopoly will sooner or later make them cheat on each other, as is the case with Libya, Iran and the Saudis.Second, the crucial importance of energy for human affairs, still not fully appreciated by conventional wisdom, is exemplified by oil. What will make a great power, ostensibly dedicated to human rights and freedom, send its warships to protect medieval sheikdoms in which women are treated as chattel, their citizens flog-ged and stoned to death, their armies trained to destroy the only democracy in the region? Not gold, not lasting riches, and certainly not freedom or human rights: only energy. For energy is the tree that grows the fruit.
Third, there goes the social engineers' fable about "finite resources," which come in a bottle, and after the last drop is gone there is no more. Yet OPEC's trouble is not too little oil, but too much; and its plight was caused by the umpteenth repetition of history
¾resources do not run out, but are replaced when the price rises too high. That is how the world survives without much alum, whale oil or charcoal; and their replacements are not substitutes, but improvements. The collapse of oil prices in 1986, according to the Saudis, was caused by the switch of the industrial world's utilities to nuclear power, mainly outside the US. Once again the "substitute" was an improvement.Yet the age of oil is far from over. In the US, consumption of petroleum products amounts to some 45% of total energy con-sumption (of which about half will be imported by 1990). A battery-powered electric car with reasonable range and acceleration is not likely to arrive in the foreseeable future, and neither are roads with underground electric power (driving automobiles via pick-up coils) likely to become economical soon. Right now oil is irreplace-able for transportation. The industrialized world remains crucially dependent on oil.
But on whose oil? The sheiks', whose unstable regimes are waiting to be overthrown by religious fanatics, Quaddafi-like adventurers or the Soviets? The oil of South and Central America, which Congress is helping to make an ever stronger Soviet sphere of influence?
Clearly domestic production is the only fundamental way to safe-guard America's freedom. But oil tariffs, tax preferences and the like would not fundamentally restore the declining US oil industry, even on the false assumption that the Washington turkeys are interested in anything but humoring the media. What then, is the answer?
What has always changed history: technology.
|
|
Vol. 15, No. 5
Newsletter: Access to Energy Newsletter Archive Volume: Issues Issue/No.: Vol. 15, No. 5 Date: December 01, 2004 10:29 AM (For actual publication date see newsletter.) Title: Peace in Our Time
Copyright © 2004 - Access to Energy Newsletter Archive
|