Today's Politico carries a piece by Darren Samuelsohn and Darren Goode entitled "President Obama Pressured to keep energy focus in State of the Union Address". I applaud the basic thrust of the recommendation, except that the premises for its propagation grossly understate the urgency of the issue. At the risk of repeating themes of previous blogs, it is worth yet again belaboring a few points.
Specifically, it's not just about creating jobs through a 'clean energy' economy. And it's not just about assuring our energy security against the whims of OPEC. It's about the fact that the very basis of our economy runs on energy resources which, from whatever sources, are depleting faster than our capacity to replace them. Unless we come together on that fundamental understanding, we will all hit the wall together in an energy crisis worse than the one we now face in the collapse of Capitalism's economic calculus.
A sober assessment of the long term energy paradigm in SOTU should go a long way to galvanizing both the public and that portion the business community which is not invested directly in the fossil fuel business (and thus committed to sucking the last ROI out of it before it collapses, regardless of the collateral damage of deferred transition). As Joe Petrowski , Chairman of Cumberland Farms/Gulf Oil, noted on CNBC last month, the economy runs on cheap oil. He also posited at that time that oil could be at $150 a barrel by this summer. While $100 seems almost definitely in the bag, short of an economic collapse, and $150 seems a far stretch by most informed and 'objective' opinion, short of a Mideast meltdown (contagion from Tunisia, anyone?) Mr. Petrowski's premise regarding the durability of a 'cheap oil' economy appears to be at severe risk. And if he's at risk, most of the business community is right there with him, whether or not they dare let that truth pass their lips. Thus, President Obama should have a pre-packaged alliance in the business community if their pay stubs are truly an effective proxy for measuring their intellect and capacity for enlightened self interest. Energy is not only an opportunity to make money across a broad spectrum of the economy; it is also an imperative for economic survival.
Needless to say, the cynics will dig out the recently reported annual energy reviews of BP and Exxon-Mobil, which project that the world will have enough oil for the next twenty years. OPEC offers the same murmurings in response to the IEA's plea to increase short term supply to head off further price increases and erosion of the Western economies. But these are positions of self interest, detached from any objective reconciliation of the public good. The majors want to protect their sunk investments and their capacity to attract more investment before facts compel a recognition of end-game. The Arabs, who are most pointedly subject to speculation that they have entered or are entering Peak Oil, are well served by arguing that 'technical factors' other than supply account for the run-up and need to be addressed.
As an interesting side note to the Exxon-Mobil report, as reported in The Guardian on January 19th, carbon emissions are projected to rise 25% in twenty years on increased demand for energy of 40%. The implicit assumption in that projection is that energy resources, primarily fossil fuels, can expand to meet that damand. The implicit consequence of that assumption is that, if it manifests, we will assure the high trajectory of climate change projections. The unstated corollary to that assumption is that by 2030, even some Peak Oil skeptics are beginning to allow that we will have reached an undeniable point of, shall we say, 'transition', because 'crisis' is too freaky a word to use. Chevron at least claims to see the future for what it will be.
Yet there is one more compelling reason for POTUS to double-down on energy in the SOTU: China. If energy is the economic equivalent of war, and dwarfs going to the Moon in magnitude of effort and priority, then China is our logical ally, because we're both in the same boat. Neither of us can afford the militaries we will need to secure the dwindling resources we will covet. Both countries have immense brain-power and human capital to throw at this battle. Neither country has time to procrastinate. We have a window of opportunity to build an alliance of transparency and mutual respect and collaboration that can serve us well in multiple facets beyond this clear and present danger. India should be invited to the party as well.
Obama was right to make healthcare his priority, because it is critical to stabilizing the economy and beginning to bend the the employment, cost and debt curves. He may not have shepherded the best plan, and he did not effectively sell the imperative of this priority to the American people, but the priority was correct as the second most important one facing us. Energy is first. I hope that he might learn from healthcare.
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As for those cynics who persist in rejecting energy and climate as more Chicken-Little gum-beating, I close with the wit and wisdom of that great philosopher and observer of the urban scene, Dirty Harry:
"You've got to ask yourself one question: Do I feel lucky?
Well, do ya, punk?"
Onward.
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