Commentary: On not jumping the gun
(Note: Commentaries do not necessarily represent the ASPO-USA position.)
The e-mails started coming in to my mailbox this fall, their quantity and excitement level tracking the rising oil prices. Had I heard that this analyst just predicted $110 a barrel of oil by next year? How about this analyst, who suggested we might hit $200 a barrel by the end of 2015? As oil snuck past $80 a barrel toward $90, more and more of these predictions were made by analysts seeing a trend, and more and more of them were sent to me by correspondents as evidence that oil prices are going up — way up.
I understand why my fellow peak-oil activists are excited. High oil prices make sense to the general public, and when oil prices are high, peak oil gets serious attention. Phrases like "the end of cheap oil" start making sense to people. When gas and heating oil prices make the news, the language of peak oil resonates. It is easy to explain to someone ignorant of energy issues: "Peak oil means that you won't be able to afford to get to work and that the price of everything made with oil (which is everything) is going up."
Rising oil prices present an opportunity to get out our message. As prices go up, the mainstream news media come calling. The idea of steadily rising oil prices seems like a logical signal of peak oil. Moreover for most of us, high energy prices are what we want. Yes, they are difficult for ordinary people, but they send clear market signals leading to positive outcomes. Steady price increases make renewable energies cost-competitive and spur more development. High gas prices drive people to public transport and we build it to support the growing need. Before 2008, that was how many people in the peak-oil community probably imagined peak oil would come about. Most of us still hear the argument all the time: "There's no need to do anything about peak oil. Higher prices will simply send signals to shift us to renewable energies and we'll all be saved!"
Although we know that particular fairy story is just that, public imagination was fueled by the language of the peak-oil movement itself. "The end of cheap oil" was part of our battle cry, and all of us got excited when prices spiked. There were more reasonable voices: Colin Campbell, Kenneth Deffeyes and Richard Heinberg had all along warned people that price volatility with spikes and collapses were the logical outcome of peak oil. But even Deffeyes was drawn into speculating what would happen when oil prices rose to 10 or 15 percent of the worldfs GDP. Exuberance is hard to resist.
Volatility is a much more difficult concept, and much harder to deal with in reality. Instead of sending smooth price signals to developers of alternative energies, or methods of conservation, or hard-to-get fossil resources, the spike-and-collapse method sends mixed signals. It can radically delay, or even get put off entirely, the development of needed resources. At the domestic level that's true as well. Why sell the second (or first) car if you will be off the bus again in a couple of months, when oil crashes back to $40? Why pay to re-insulate if heating-oil prices go up and down? Why not just fill the tank when prices are low? It is harder to attach ourselves to a narrative of volatility and instability for a host of reasons, but history suggests we may not have a choice.
The price collapse and the association of the peak-oil movement with the language of expensive oil had a backlash. The media and others immediately retorted that we'd been telling them that prices staying high was a sign of peak oil, but now prices were low, so peak oil must not be real. As most of us know, folks got a lot less interested, and the movement itself experienced frustration, attrition and crisis as people, dismissed again, were worn down. In many ways, peak-oil activists have only just now recovered from the price collapse and the radical shift in their understanding of the story. It is tempting, of course, to think this time will be different. What if it is not?
The fact is, the price of oil tells us very little about the geological situation at this point. We are past the conventional-oil peak and near or on the plateau, whether oil prices are $40 a barrel, $90 a barrel, or $140 a barrel again. Farther down the supply curve, prices might well tell us a lot, but it is a mistake to jump the gun here.
We can't afford to throw away our influence every time the markets fluctuate radically. The work of adapting society to use a lot less energy is too important. We know that demand destruction is a real phenomenon, that oil markets attract speculation during periods of rising prices, but that speculators move on to other things when the markets crash. We may not face the end of cheap oil so much as the end of affordable oil. When you have no job, your unemployment runs out and you are living on food stamps, $40-a-barrel oil looks just as unaffordable as $130-a-barrel oil.
Price instability and economic volatility aren't as sexy a story as continually rising prices, and they aren't as easy to explain to media who don't do complexity well. It is tempting to take advantage of the publicity that rising prices give us, and to intensify our message to say, "This is what peak oil looks like." That, however, would be a mistake.
The pleasure we get from being taken seriously in periods of high prices will be short-lived if we are not careful about framing this issue. Our messages have to work when oil prices are high or low. We cannot rely on price run-ups occurring at convenient moments; nor can we allow price volatility to interrupt life-or-death societal preparations because people feel that the crisis is over now.
Right now the markets are rising and the consensus is growing that we're emerging from our recession. Maybe, as some suggest, energy prices will rise dramatically, bringing a new wave of attention to peak oil and forcing us to deglobalize, to produce things locally and to consume less.
Maybe those who claim the world economy can't bear high oil prices are right, and we'll experience a set of rapid-fire boom-and-bust cycles, undermining the global economy, forcing us to deglobalize, to produce things locally and to consume less. Or maybe they are right who claim we face a deflationary crisis wherein oil prices collapse more than our purchasing power, forcing us to deglobalize, to produce things locally and to consume less.
I'm sure we all have our own pet scenarios, and many experts have excellent and credible reasons for believing one of those is more likely than others. I would argue that as a movement, however, peak-oil activists do better to focus on the common outcomes of high, low or fluctuating oil prices, than to try to predict which path energy prices will take. The end-results matter most. Thus it is important we not get caught up in the irrational exuberance generated by markets that seem to support our position, that we use language carefully and wisely, and that we prepare to have things go awry — over and over again.
Sharon Astyk is a writer, farmer and member of the ASPO-USA board of directors.
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