I cannot understand the markets’ panic over lower oil prices. Sure, it hurts if you own Exxon or drilling-fracking services companies, or work for one, or if you are Saudi or Venezuela or Russia or Iran. But for most of the world, it amounts to a spectacular tax cut and cost discount for all manufacturers, transportation and consumers of almost anything. See this article on much cheaper airline deals.
Is this flood of spendable cash supposed to somehow… hurt us? For 50 years, steep rises in oil price sent us tumbling into recession and drops helped get us out. What’s different this time? Pundits claim that it is because a larger fraction of the oiul we use is produced domestically, now. But (a) that was true in the 1970s too, and the oil shock killed Jimmy Carter. And (b) ...um… increased energy independence from foreign sources is… er,... bad news?
The plummet in stocks smells funny to me. I’d look closely at some of those petro state sovereign wealth funds. Just sayin’.
Only now, a truly salient fact that will weave together with the others.
Does denial have any limits?
Two U.S. government science agencies announced that 2014, which had smashed the 1998 record as hottest year in human history, did not hold the top title for very long. It’s official, 2015 has topped even 2014’s torrid temperatures. And the forecast is for 2016 to be hotter still.
But hey, let’s suppose 2016 dips slightly, as would be natural, as each year oscillates around a slope that has arced steadily higher for 50 years. What then? Expect to see Ted Cruz and other murdochians leaping to announce: “See? It’s going DOWN!”
(They can no longer use their former lie-trick, pegging the El Nino year 1998 as their “before” comparison. That year, which shattered records across all of recorded human history, was left in the dust by hot 2014 and hotter 2015.)
There is only one response… to those of you out there who have bought into the Murdoch-Saudi-Koch-Fox propaganda and War on Science. And I will append that message below.
Too late to stop sustainables
Well, the petro-price plummet might have really hurt us all, if it happened a few years ago, by choking solar and wind companies to death with floods of cheap oil. But it’s too late for that, now.
Bloomberg New Energy Finance finds that 2015 was a record year for global investment in the clean energy space, with $329 billion invested in wind, solar panels, biomass plants and more around the world. (The number does not include investments in large hydroelectric facilities).
That’s 3 percent higher than the prior 2011 global investment record of $318 billion — and most striking is that it happened in a year in which key fossil fuels — oil, coal and natural gas — were quite cheap. “Measured in terms of electricity generating capacity, the world saw an additional 64 gigawatts of wind capacity added and 57 gigawatts of solar capacity, BNEF estimates. The most striking figure here is that while 2015 only saw about 4 percent more clean energy investment than 2014 (when $316 billion was invested), the growth in renewable energy generating capacity was much higher at 30 percent. This, again, signals declining cost.”
Sure, if oil had dropped five years ago, it would have been a disaster for the Earth by undermining and possibly destroying solar and wind etc. Now? They have huge momentum, are competitive even with cheap oil—something denialist then claimed to be impossible—and new techs are looming that will make the transformation epic.
At this point, cheap oil is only good news. It frees western nations from fretting to please petro princes, it boosts every industry except corrupt resource extraction, giving both producers and consumers in-effect a huge tax cut (a “tax” that had been going to Saudi Arabia). And it lets us cap the bitumen wells, the tar sand pits and other dirtier sources, reducing fracking, keeping those wells ready in case we need them in-future, a reserve-surge capacity that should keep prices down. Which is exactly the right approach.
We lucked out. The princes kept oil high during the span when sustainables were being born. Now the infant is walking and starting to run. And the Carbon Age will taper off, perhaps even in the nick of time. Maybe.
Oh but timing is everything? Take this headline: Scientists say global warming has canceled the next ice age.
Okay okay. I can just imagine the next denialist chant, after they are forced to move the goal posts yet again. Having to admit that science shows huge global warming due to human-generated CO2? The next riff will be:
“Yay! We polluters prevented an inevitable ice age!”
That’s one interpretation - (a moronic one) - of this scientific study that suggests - indeed - human activity 5000 years ago might have tipped the balance and prevented another glaciation.
In which case yay ancestors. Now let’s be scientific and responsible and not wreck the place.