Rising oil prices not only hurt at the pumps, they set up interesting anti-infrastructure wars

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Rising oil prices make a lot of news. In the old days, whenever it happened the affected parties were well defined – those that produced oil loved higher prices, and everyone else hated them. It was such a simple world.

Now however the dynamics are much different. Consumers still hate higher gasoline prices of course, but there is now another group that is happy about them, sort of. Environmentalists tend to like higher oil prices because it makes renewable energy relatively more attractive, the adoption of which will hasten the demise of fossil fuels. When gasoline prices double, the stampede to smaller and/or more fuel-efficient vehicles is formidable.

Another factor that is or will lead to higher oil prices is the movement to stop all fossil fuel infrastructure development. Many leading climate scientists believe this to be necessary to keep earth’s temperature increases within acceptable bounds.

This strategy – of killing off any new infrastructure development – has an unintended side effect though, one that is near and dear to economists’ cold little hearts. The problem is similar to the war on drugs. Declaring war on the suppliers can increase costs, but that only attracts more suppliers because the profits are bigger.

Stopping energy infrastructure projects means that fossil fuels won’t easily get from where they’re created to where they’re wanted. So prices will rise if this ultimately results in scarcity.

The result of that though will be money flowing into oil and gas exploration, because it’s more profitable. So this will ultimately lead to more development, if at all possible. The last point is significant, because the same people that seek to halt energy infrastructure development will work to halt new wells, new pipelines, etc.

All well and good from an environmental perspective, right? Wrong. Because what will happen then is what always happens – someone will provide it, and the ones that do will be the ones with the lowest standards.

If it becomes impossible to build a pipeline in North America, or drill a well, or whatever, the money will got to Russia or Nigeria or some other country with much less interest in environmental standards. (Russia is one of the world’s largest oil producers; any idea what their spill record is? Or most OPEC countries? And if they do publish statistics, should we believe them?)

Ironically then, freeing North America and Europe from future fossil fuel development will lead to production increasing in parts of the world that will most likely increase global greenhouse gas emissions and environmental contamination. Just another one of life’s unintended consequences that, like the war on drugs, no one will likely ever think through all the way.

1 Comment

  1. H Macdon says:

    Isnt it just wonderful how special interest groups, media types, actors, and politicians who are SO out of touch with reality, that they have to ultimate control of the everyday man. The struggling unfortunates who are able to have a job that requires transporation in some manner to eak out a living, and who requires shelter that will be heated by some sort of energy, is forced to pay exsorbinent taxes on their basis costs of life so that the elite of society can enjoy their life in excess. Sending their un-educated knowledge on “global warming” thoughts to make life even more difficult for the under educated that follow them.
    The energy that is so heavily ridiculed has given the greater part of North America a couple of weeks in December a good deal of interior warmth for most. The pandering government is taxing the consumption heavily and telling us it is a “carbon tax”. This will in some way lessen or slow down the consumption.
    What? Are we actually supposed to believe this!
    If our population can keep from freezing by turning up the thermometer, does taxing make this slow or stop. No we will deal with it when the “bill” comes. Maybe parents will eat less for a month. Maybe Johnny or Jill won’t play sports, have new shoes, or some other unfortunate imposition.
    This “carbon tax” is a money grab. Thats it, all, done!
    Taxing the use of fuel (of any type) WILL NOT make carbon disapate. It WILL NOT impact politicans, actors, media types, special interest groups, industry leaders, CEO’s.
    It will impact “middle & lower class”, they will be the sufferers of this. They will pay the taxes, increased costs of goods. Companies pass on cost increases they DO NOT absorb them.
    So the next time you get on public transportation, put gas in a vehicle, turn the heat up in your residence, or ask the worker at the shelter to turn up the heat a bit, think of the special interest groups, politicans, actors, and media types that feel it is your placed to be taxed to death, and to be as oppressed as possible.
    “Man” is an interesting study, what doesn’t work for “the loud mouthed leaders” will most likely be adopted by the easily lead! It has happened throughtout history.
    Industry will make A LOT of money to attempt to build up a different anything, in this case, energy source.
    We should have an alternative/ alternatives for our sources of energy, however not shouldered on the backs of tax payers. If it so important private industry should research as in the recent past and offer the solution. It shouldn’t be shoved down our throats under the gise of taxing will offer the answer.
    At this point man has a very clean fossil fuel, relatively inexpensive. Use it.
    Government take a share to keep tax flowing (not to gouge to make up for over spending).
    Taxing the middle class has never worked for long, history has shown us that.
    To conclude as a matter of thought a couple of issues; how is the “lead” from expired batteries from electric vehicles going to be disposed of?, how are we generating ALL this electricity?
    Carbon is used by all plant life on this planet, is it not carbon dioxide we might be concerned about? If so, why isn’t that being taxed? Perhaps the “do gooders” are afraid of the back lash from that topic!

    Like

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