Peak Oil: The Road to a Sustainable Economy or Crash Landing?

The choice is really ours. Unfortunately, the leaders of the corporate parties haven't been making the right decisions lately to set the nation on a path to the kind of energy independence required to create a sustainable economy. The outcome largely depends upon whether we can convince those who continue to vote against their own interests by supporting the corporate parties to make the bright decisions necessary to bring those to power who will represent their interests over those of Wall Street.

Peak oil is here. Technically speaking, it already happened. According to the International Energy Agency, world oil demand reached 85.6 million barrels per day in the fourth quarter of 2004 while supplies averaged only 84.4 million barrels per day. Predicting the exact point at which demand will permanently exceed supply is an arduous task, nevertheless, there is a growing consensus among geologists that this time is rapidly approaching. As trading analyst Sean Brodrick points out, oil production in Norway, normally the world's third leading producer behind Saudi Arabia and Russia, has hit an eleven year low and China's economy keeps humming along at a %9.5 growth clip despite attempts to slow it down. Furthermore, when India's growth rate is factored into the equation, it adds to an increasing amount of competition for the world's remaining oil supply. The question is how Americans will direct their leaders to respond to this challenge.

It's not as if we haven't already seen a glimpse of this reality and the potential economic repercussions which it will likely produce. For example, during the oil spike which culminated in oil prices hitting $85 per barrel in 1981, auto sales from the Big Three dropped by forty percent and the Big Three all posted financial losses which eventually lead to a federal bailout in the case of Chrysler. 300,000 manufacturing jobs were lost as sales of more fuel efficient automobiles produced in Japan and Germany created a permanent decline in market share for the Big Three.

For their part, the corporate parties continue to oppose amending CAFE standards to increase fuel mileage of vehicles. Average fuel mileage has actually declined since the early eighties. Automakers continue to churn out SUVs and heavy trucks while losing their incentive wars. Sales are up but profits are tanking. The Univeristy of Michigan's Transportation Research Institution Office estimates that 465,000 manufacturing jobs nationwide will be lost if oil reaches $100 per barrel. Sound familiar? While moving people from energy intensive manufacturing jobs to other sectors of the economy is desirable from the standpoint of creating a more sustainable economy, the fact that the corporate parties show no sign of initiating steps to feather this transition gives a strong indication that they are simply paving the way for the taxpayer to pay for Detroit's retooling while the automakers are paying them handsomely for their efforts by way of hefty campaign contributions.

An easy first step in this process should be to create sweeping incentives to decrease consumption and promote conservation. The implementation of incentives in order to create a dramatic increase in local organic farming for domestic food production would fit this broader criteria. The rationale for this measure is simple to understand. Pesticides utilized in industrial farming are made from oil. Similarly fertilizers are derived from ammonia and produced using natural gas. Peak natural gas is currently expected approximately ten years following peak oil. Tractor/trailer rigs used to ship food rely on oil for both their production and operation. Commercial refrigerators used to store food are produced in oil powered plants. Lastly, the average piece of food has traveled approximately 1500 miles before it hits your plate.

Consequently, a substantial portion of our dependence on oil could be eliminated simply by encouraging local organic farming. Nevertheless, the leaders of the corporate parties decidedly took the opposite path in the Energy Act of 2005. Rather than considering comprehensive measures to cut oil consumption and promote conservation, they inserted incentives promoting biofuels in order to provide sufficient cover for representatives from the cornbelt to pass this industry-authored atrocity with its mass give aways to the nuclear, oil and coal industries. This bogus approach completely ignores the fact that the type of industrial farming required to produce the amount of corn necessary to make biofuels is extremely oil intensive. Perhaps most importantly, measures to promote conservation and reduce comsumption which create local economic self-sufficiency are not part of the plan being fostered by giant corporate conglomerates.

The leaders of the corporate parties are aware of peak oil and they understand what is at stake. They've made their choices increasingly clear by crafting policies designed to funnel the nation's wealth up the economic scale in order to guarantee their campaign contributors seats on the life boats. Peak oil is the primary rationale behind the $5 billion per month resource war currently being waged in Iraq and the reason the corporate parties aren't afraid of breaking the governernment in their efforts. It's people without massive financial resources who require the government to act responsibly on their behalf; unfortunately, the tunnel vision of the corporate parties doesn't include a sustainable economy for the remainder of us after peak oil. If there's going to be a soft landing after peak oil for the middle and lower classes, there are no signs it will be due to the tender mercies of the corporate parties.

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