Editorial: Betrayed By Peak Oil

A funny thing happened on the way to the bank bailout bill. Two provisions that directly impact outdoor folks were snuck in: a long overdue extension of renewable energy tax credits, and a new tax break for bicycle commuting. More evidence of a relentless march towards a more sensible energy policy and more active transportation? Not quite.

As I write this, oil is hovering at about $70 a barrel, down from an all time high of $147 this summer, with the price likely to go lower if the economy continues to slow. The lower the price of oil the less short term economic incentive to invest in alternative energy and active transportation. Natural gas prices are lower too. “Natural gas at $6 makes wind look like a questionable idea and solar power unfathomably expensive,” said Kevin Book, a senior vice president at FBR Capital Markets as quoted in a recent New York Times article.

With fossil fuel prices deflating so quickly, clearly something in addition to pure supply and demand was driving up prices to begin with. Increased reserves, flat refining capacity, speculation, and the idea that oil production has peaked and will only go down all played a part. Peak oil deserves special vilification.

What if the most dire predictions on peak oil aren’t going to come true for a long, long, time? What if oil hovers around $70 dollars a barrel for the next 5-10 years—making it cheap enough for us to drive our cars too much yet expensive enough to allow environmentally destructive practices like ANWR drilling and Canadian tar sands extraction to continue? A lot of folks tried to convince us that peak oil was the most important issue of our time. They neglected to mention that every day that peak oil doesn’t happen two other environmental concerns get worse; 1) climate change, which is exacerbated by fossil fuel use, and 2) conserving our fresh water supply, which is impacted by the sprawling development that cheap fossil fuels enable.

It took naked vote soliciting in an emergency bailout to get two common sense tax breaks that should have passed long ago. Big oil companies seem to have benefited more from the concept of peak oil than progressive energy policy has. The question is, do we, as a nation, have the intestinal fortitude to pony up for alternative energy and active transportation when the short term economics aren’t so rosy? I hope we do.


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