Jewish World Review Feb. 6, 2006 / 8 Shevat 5766
What oil crisis?
President Bush said in his State of the Union address that we Americans are "addicted to oil." He thinks oil "dependency" is a problem. Apparently he believes we should be burning wood chips or something instead.
No, thanks. I love my oil. For starters, I love my minivan. I love being in the minivan with the kids and using oil. (Actually, I prefer to be in the minivan without the kids.) I would probably drive to the bathroom if I could.
When I decided to move my family from the East Coast back to the Chicago area over a year ago, one of my criteria for a new neighborhood was that I had to be able to walk to town. I have actually walked there precisely ... one time. I didn't care for it much.
But, I do love that, here, I can get places fast.
It's all about time for me. Yes, I can walk to Starbucks in 10 to12 minutes, but I can drive there in one minute. The library is about a 45-second drive, and the school 30. I'm not opposed to walking; I'm opposed to wasting time. I know, I know, exercise isn't a "waste of time," blah, blah. But if I'm going to exercise, I want it in a gym with a trainer bearing down on me. I'm not going to waste time just walking.
I also like a warm house in the winter and, for the record, an air conditioner set to "stun" in the summer, and lots of lights on in my home all the time. Apparently Bush now has a problem with such living.
But, there is no reason, except for price, for me to cut back on any of this. (I'm not even going to deal with the "greenhouse gas" argument here.) News flash: We have plenty of oil (and, of course, coal for electricity). Bigger news flash: We'll come up with more when we have to.
In particular, I could catalog just the known, recoverable oil reserves that will last us centuries. America is twice as energy-efficient as it was 50 years ago, and those gas lines at the pumps in 1973 were caused by our government rationing oil, not an oil embargo, which the Saudis lifted almost as soon as they imposed it.
But far more important is the understanding that oil is not a natural resource. For most of man's history, it was pretty much just black gunk in the ground. Occasionally it saw the light of day. The ancient Egyptians used it in mummification, and the eighth-century streets of Baghdad were actually paved with tar, derived from petroleum. But then it was pretty much ... nothing until an enterprising fellow figured out how to distill petroleum in 1853. And then wow.
In other words, the natural resource is not the "stuff" it's the mind of man who is capable of turning "stuff" into something incredibly useful and valuable. Julian Simon was a brilliant economist who made just this point in his book, "The Ultimate Resource" (paperback, 1983). He took on the 1970s doom-and-gloomers, who said we were running out of everything except people. Instead, Simon showed that when we looked at man's amazing mind as the "ultimate" resource, then we could understand that natural resources were essentially limitless. As long as that mind is free, it will come up with answers.
So, hundreds if not thousands of years from now, if oil becomes too scarce and/or too expensive to extract, man's mind will come up with something else instead.
In fact, some of the greatest oil or oil-extraction discoveries in the last 50 years have happened when prices spiked, producing a need and an economic incentive to "dig deeper," so to speak.
That makes sense. The one thing that will cause me to cut back on my energy use is price. High prices are the most efficient way for the market to ration and produce viable alternatives to anything, which is why high prices shouldn't be artificially avoided (or imposed, for that matter), especially when it comes to energy.
But I will never cut back just because I'm worried about "using up a natural resource." The real resource is man's amazing mind. And I'm confident that when we need to, when it makes economic sense to, we'll come up with something a whole lot better than burning wood chip
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