All the capital that might have gone into the Keystone Pipeline had the potential to be one of the worst economic decisions ever. I am surprised that oil has taken a downturn. Really surprised. I was one of those who favored alternative energy, but saw that oil was firmly entrenched in the real world. Today … President Obama is a genius.
Shell is going to cut 10,000 jobs. They are not alone. Oil warfare is on the rise. This is not about a benefit for consumers. No … oil has become an economic weapon (intentionally or not). Let’s look at some of it.
I am not an expert on any of this, but I think this started with economic sanctions on Russia. Those sanctions reached a certain level in 2015 and we saw a dip at the gas pump. That may not be the true origin, but that is where I noticed the impact. Months later, a slightly complicated chess game of price adjustment among major world powers triggering a new cycle in oil pricing.
In the meantime, if we go back to 2001, the Middle East wars seemed partly predicated on access to oil resources. A gambit that did not unfold as expected. Nothing was really gained in terms of improved energy supply to the West. Rather than war, a better investment would have been alternative energy infrastructure.
Fast forward to 2009, a new US President was making the case for alternative energy. He did not care which alternative source became the pick, as long as it was something other than oil. Unfortunately, there was too much entrenched interest in the renewed build up of a domestic oil industry. Oil has inherent volatility, literally and figuratively. A big downturn in the oil industry happened in the US before. See last year’s WSJ article, Back to the Future? Oil Replays 1980s Bust.
The original economic plans put forward by the Obama Administration were sound. The vision of the future was not exciting. Just serious legislative proposals that were obstructed. Domestic politics may have undermined national prosperity. The economy will still rebound at some point. Regardless, those earlier plans remain sound and may end up being a better alternative than what is taking place today. The Affordable Care Act does leave much to be desired though a single payer system is still necessary. Besides that, now is the time for a real energy industry that will create jobs and trigger a real economic boom.
Let’s move away from selling oil. Time to bring safe nuclear power plants online to fuel electric cars, homes and offices. Meanwhile other fuel sources from hydrogen, solar, wind, geothermal, and hydroelectric can cover a range of edge cases. After all, there is a huge potential industry in the global trade of batteries. Real solutions requiring real productivity, investment, and the involvement of society. That has got to be better than staring in the face of another potential recession.