Let me admit from the start that I am a dunce where money is concerned. Many of the finer points of economics are just arcane mysteries to me. Maybe that is a serious handicap … maybe not.
Trying to make sense of oil abundance by observing market forces is tricky. Obviously there are people who profit from rising oil prices and those who profit by price instability. It’s like trying to get the ants off a carcass, to see how much meat remains.
Let’s stick with the simple physical things that we think we know. We think that we may have used the “easy half” of the world’s endowment of oil. In the best mining tradition, we have leaned towards the better grades of oil, as that is where the greatest energy profit may be had. Even so, the better quality oil deposits tend to yield their lighter fractions first, leaving the heavier, energy-lean residues to be scavenged later.
We know that the more abundant poorer grades of oil contain less energy. We know that they require more energy to be consumed in extraction and processing, to produce the gasoline and diesel we need. So dwindling oil quality must have a “double whammy” effect on the availability of the desired article.
Add the tyrannies of distance and depth to reach unexploited deposits.
Add the costly capital investment, relative to the yield of smaller oil deposits.
Now to make things really confusing, it is oil energy which sets the value of money, not the other way around.
For example, if we wish to boost nuclear power in the teeth of dwindling oil supplies, we will discover that the “cost” of plant, fuel mining, processing and other infrastructure will become uncomfortably high by present expectations. The more we try (and the more oil reserves we burn in the process) the higher will go the “price” of the essential ingredients. It will be like chasing our own shadows. The same effect will plague the remnants of the oil industry itself.
We could call that the Quicksand Effect.
A more obvious example of the Quicksand Effect is the present method of garnering oil by force of arms. This policy burns huge amounts of precious oil, sinking us deeper and ever more rapidly. Why is the US behaving like a dinosaur stuck in a tar pit?
The harder we try, the more we sink. The faster we run, the more distant our goal … because our energy goal is actually behind us and there can be no turning back. Shall we slow down, to see if it will catch up? Shall we empty the treasury into the bog in order to get a little more traction? Maybe that is all money is good for after all. The US dollar says, “In God we trust,” but will God bless the dollar?
Whenever we look for economic answers, we become confused. What is the addictive ingredient in money which hooks rich and poor alike? What is the essence that poisons the mind of Christian, Islamist and Jew alike? Why do we so willingly ingest a drug which grows cataracts over our eyes?
It is simply this: Money and free market economics is the best way to put the greatest distance between our personal actions and their consequences. Think about it. No wonder money trumps God and ethics! No wonder we embrace it so.
Having thus discovered and admitted to this basic flaw in my western soul, I turn to government in the hope that wiser heads might have somehow congregated in the seats of power.
I see no evidence for that.
I see only the usual tiresome Bronze Age pursuit of money, using raw political and military force.
I see only false leaders, false gods, false morality, bizarre economics and delusion masquerading as science.
BLACK DOG
Money has no existence
Apart from useful energy.
Oil is a black dog
And money just the tail.
The fleas live on the tail
Because that is where
the money is.
The only thing those fleas
will ever see
Is the backside of the dog
As it goes forever away.
