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Eco-Justice Notes
The E-mail Commentary from Eco-Justice Ministries

Oil Ethics
distributed 6/13/08 - ©2008

This week's issue of Eco-Justice Notes is underwritten by Jim McBride, of Laguna Beach, California.. His generous support helps make this publication possible.

The American Family Association sent me an urgent email alert this week. They urged me to "Act now to keep your family from paying $10 a gallon." The email said:

For the past 10 years Congress has refused to do anything to make our country energy self-sufficient. ... Because environmentalists have kept us from developing our vast and plentiful energy sources, we are now at the mercy of foreign governments (many of which are hostile). ... We have abundant energy reserves, but the environmentalists won't let us use them.

Beyond the vilification of those evil "environmentalists", I'm amazed at two bold assertions. The statement about "abundant energy reserves" is just plain wrong. The complaint that the enviros "won't let us use them" is grounded in a strikingly arrogant sense of entitlement.

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Three and a half years ago -- in December, 2004 -- a newspaper headline caught my eye.

"$30-a-barrel oil likely here to stay", it proclaimed. According to the AP story, "government analysts" expected oil prices to be fairly stable "for decades to come." The report predicted that "crude is likely to cost about $35 a barrel in 2035".

I saved the news story because I knew that it was going to be wrong. I just didn't expect it to be so wrong so soon. 38 months after the analysts said that "the recent flurry of record oil prices may be temporary", oil sold for over $100. Prices have stayed far above that line for four months now, and are not expected to decline anytime soon.

The reasons for those rapidly rising bucks-per-barrel are complex. Some of it has to do with investors bidding up the value of a profitable market commodity. In addition, the weakness of the US dollar distorts our perception of how much oil costs. Interestingly, the dollar is weak -- in part -- because the US is importing so much oil.

But the dominant and indisputable price factor is that the supply of oil is not keeping up with demand. Basic economic theory kicks in. The price goes up when a valuable resource is in short supply. And oil is in very short supply relative to the rapidly rising global demand.

Global oil production has been basically flat for over two years, holding steady at 84.5 million barrels per day. Most of the world's oil producers are pumping as much as they can, and as fast as they can. Among the OPEC nations, only Saudi Arabia is believed to have the capacity that would allow them to produce at a higher rate.

It is very likely that we have reached the "peak oil" situation where total global oil production has reached its maximum levels, and will now start to decline. A classic graph of historic and predicted oil production shows the trend clearly. (A larger version with a description and links is available.)

As that chart shows, US oil production (the lower green area) peaked in 1970. The US is now producing about as much petroleum as we did in the 1940s -- not because the evil environmentalists have locked it all up, but because the big oil fields are running dry. However much the AFA and others might want the US to be "energy self-sufficient", there is not enough oil here for us to drill our way to petroleum independence. Even if drilling rigs were to be set up all over the Arctic National Wildlife Refuge and along US coastlines, the US would never come close to producing as much oil as we now use.

The assertion that "we have abundant energy reserves" -- whether the "we" is the United States, or the global community -- is wrong. Half of the world's total oil supplies have been used up within the last 100 years, and the ability to produce oil is going to decline. In the future, it will be harder and more expensive to extracted that oil. This peak of production is happening at a time of rapidly rising demand which further modifies any sense of "abundant" supplies.

The impact of dramatically higher prices for petroleum has been showing up at the gas pumps, which in turn is triggering rapid changes in the US auto industry. Energy prices are also impacting the cost of food, airline travel, and highway maintenance (since asphalt is made from oil). Scarce and expensive oil is causing many other ripples across national and global economies. This is not a trivial situation, and it is essential that we deal honestly and responsibly with the issues that are raised.

If we accept the reality that global oil production is at its peak, then have to deal with many hard questions, both ethical and practical.

How do we bring considerations of justice and equity into the economic impacts of expensive oil? If fossil fuels are a necessity for life in today's world, how do we ensure that all members of the society will have access to sufficient resources without demolishing their budget? (That's a factor that must be considered when climate change policies impact energy prices, too.)

How can we make a rapid transition away from oil-based society? If lots of drilling won't produce enough fuel, we must find ways to reduce energy use, and to shift to other forms of energy. Tragically, earlier this week the Senate failed to pass the Renewable Energy and Job Creation Act of 2008. The bill contained, among other things, "critical production tax incentives for the rapidly growing renewable energy industry."

A third ethical question brings us back to the AFA presumption that the oil is there for us to use. We have to consider how to deal justly and prudently with the needs of future generations. How much of a petroleum supply -- for a wide range of essential purposes -- do future generations have a right to expect?

The American Family Association is mobilizing its base with the claim that environmentalists "won't let us use" abundant oil supplies. Their appeal sounds very different, though, if we change the obstructionists from "environmentalists" to "those who want to preserve the remaining oil resources for our children and grandchildren." (Go back to the top of this article, and try reading it with that substitution.) What they really want is authority to plunder a valuable resource for their (or our) own use.

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We're entering into some uncharted territory -- politically, morally, and practically. National and global economies have been constructed on the assumption that oil will be cheap and abundant. Infrastructures for transportation, food production, manufacturing and trade require what is now being recognized as a resource that will be expensive and scarce. (Many parts of the world are encountering parallel issues with water.)

As we enter this challenging time of transition, we must be honest about the facts, and refute those who try to sell us false visions of easy answers. We must acknowledge the complex problems that have to be resolved if we are to move into a new energy era without great pain and conflict. We must think expansively, and not claim an exclusive right to these vital energy supplies for our own nation or our own generation.

Politicians and editorial writers may focus on the immediate shock of gas that costs over $4 a gallon. Churches can provide important moral leadership in their communities by broadening the conversation. How is your church addressing this situation?

Shalom!

Peter Sawtell
Executive Director
Eco-Justice Ministries

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