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Posted:I had an odd thought yesterday. It should be more or less undisputed that we are heading to hell in a handcart by burning too many fossil fuels and too much oil in particular. There are many organizations doing valuable work trying to lower our oil consumption but there is only one organization that has ever succeeded. Can you guess which organization I mean?
First let us note that we use as much oil as we can pump out of the ground. Global spare capacity is considered to be less than 5% of supply (perhaps 2-3%), is located almost entirely in Saudi Arabia and is exaggerated for both political and geopolitical reasons.
The price mechanism ensures that all oil pumped is sold. About 1/6 goes into the petrochemical industry, primarily to produce plastics, and the rest is burnt.
All environmental movements in this field focus on reducing demand for oil. We should turn out lights, we shouldn't leave our T.V.'s on standby, we shouldn't drive or fly. The reduction in demand causes a fall in price but all the oil is still sold and burned. It just means that the costs fall till someone less principled burns the oil, which given the size of the global economy and the oil market is not far at all. To argue that less oil is burned as a result you have to argue that the fall in price deters investment in new oil fields and oil recovery technologies so less oil is pumped out of the ground. This seems like a flimsy argument as oil is so profitable anyway that all oil companies are frantically scouring the globe for more oil.
Our oil consumption is not constrained by demand but by supply so to reduce it we must reduce our supply, we must pump less oil out of the ground.
Has any organization succeeded in getting us to do this? Yes, it's called the Organization of Petroleum Exporting Countries or OPEC for short.
I encourage anyone with a glass to hand to join me in a toast to OPEC, the organization that has unquestionably done more to reduce our oil consumption than any other. EDITED_BY: Mascot (1207376618)
Posted:Of course they're not altruistic...I never said they were. OPEC was formed to keep production down to rasie prices and profits. They have never been an environmental organisation and never will be. They are universaly loathed, charicatured as an evil club of rich middle-eastern Sheiks bent on extorting more from the west, and faced unending western pressure to raise production. OPEC is a cartel interested only in gaining more money.
Sadly OPEC's influence has declined terminaly since the 1970's when they were able to reduce the west to it's knees forcing the oil shocks that led to the simultaneous unemployment and inflation (stagflation) that broke the historical trade-off described by the phillips curve.
This sounds bad but the economy must be broken from it's dependance on oil and it is going to be painful indeed. It would have been better to ration the oil out over a longer period than burn it all as fast as we can. Personaly I believe it would be best to stop using oil within maybe 3-5 years whatever the cost to wellbeing and human life (which would be large). The short-term costs are as nothing compared to the long term costs of living the life of riley for another three decades and then being saddled with the nightmare of a warmer earth for the next million years. Words are insufficient to express my horror at the present situation. The defining feature of a great Shakespearean tragedy (in my humble opinion) is that the viewer knows it's going to happen, can see the people involved walking inexorably towards disaster and must watch as their fears for the characters are unremmitingly realised. Global warming is the greatest tragedy our species has ever seen, and I feel I can do nothing but watch as it unfolds with crushing inevitibility.
OPEC was unable to maintain discipline and it's many member states cheated on their production quotas rendering the cartel ineffectual. Members overstated their reserves to gain higher quotas and the proportion of supply accounted for by OPEC members fell significantly as non-OPEC members such as Russia began to produce much more oil.
OPEC is no longer a serious force in the world. Only Saudi Arabia has spare oil capacity and they have little indeed.
I find the reflection that only OPEC has ever come close to mitigating the disaster we face supremely ironic.
Posted:It occurs to me that this analysis is flawed because I left out coal. Unlike oil or gas we could potentialy mine and use more coal, coal has much more elastic supply than oil or gas so if we reduce demand less will be burned.
Since much electricity is generated from coal saving electricity does clearly reduce fossil fuel use. It is harder to argue that not driving reduces fossil fuel use. Oil is just so useful and possesses such magnificent qualities as a fuel that we do seem likely to burn it all.