WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Alt Text

North American Oil & Gas Bankruptcies Climb Beyond 100

Three more companies joined the…

Alt Text

Can India Become An LNG Juggernaut?

In the world of LNG,…

Alt Text

What Hubbert Got Wrong About Peak Oil

Hubbert is widely credited with…

Post Carbon

Post Carbon

Post Carbon Institute provides individuals, communities, businesses, and governments with the resources needed to understand and respond to the interrelated economic, energy, environmental, and equity…

More Info

Petroleum Propaganda: Depletion vs Development

Which sounds better? A) The Obama administration should be doing more to develop U.S. oil-and-gas reserves. Or, B) The Obama administration should be doing more to deplete U.S. oil-and-gas reserves.

If you answered “A” give yourself a pat on the back. But you’ll also want to brace for impact, because you fell right into a trap built by the API and its Republican friends like House Speaker John Boehner (R-Ohio) who endorsed development with patriotic gusto on Monday, July 4. Of course we should do more to develop our resources. Sounds great! How can any sane person take issue with that?

It’s a trick question. Let me explain: What does it mean to develop non-renewable resources? Extract, mine, dig up, disperse, burn. When we develop muscles or skills, we have more at the end of the process than when we started. When we develop non-renewable resources, we have . . . less.

Pretty sneaky, right? Now you can see that the better way to describe the extraction of America’s non-renewable resources would be “B.” Deplete. 
Deplete America first! Deplete here, deplete now!

Nobody ever says that. But why not? It’s precisely what we are doing by increasing rates of drilling and mining.

This is not semantic hairsplitting. It’s an exercise in cognitive clarity. By using the word develop to describe a process of depletion, we are fooling ourselves—or allowing ourselves to be fooled. We unconsciously accept the notion that we are furthering a process of wealth creation that is sustainable, when all we are really doing is spending down a finite resource.

Excuse me, would you mind if I develop your bank account?

But wait—an economist would argue that oil, gas, and coal accomplish nothing for us if left in the ground. By extracting and burning them, we are deriving real benefits that justify the term develop. That makes this situation fundamentally different from the mere spending down of a bank account.

Or does it? When there’s money in your account, it only shows up as a number on a computer screen. When you spend that money, you get real stuff in return. Hot diggity! You’re deriving a real benefit! Only trouble is, the number on the computer screen gets smaller and smaller until all you have left is a big fat zero, with which you can buy exactly nothing.

Or maybe not. If you’re a responsible participant in the economy, you’re not just spending down your account; you’re also adding to it by working for a paycheck, or selling stuff, or whatever you do to get by.

So from that standpoint our use of non-renewable resources is not comparable to spending down a bank account. It’s actually much worse! That’s because we can’t add to the amounts of these resources provided by nature. We can’t create more oil, coal, or gas in any significant quantities, using a process that doesn’t itself require huge amounts of energy. There’s no paycheck being deposited in Earth’s crust at the end of the week.

Depletion is depletion. When non-renewable fossil fuels are extracted and burned, they’re gone. There will be less for future generations to use. That’s the truth. Let’s stop fooling ourselves.

By. Richard Heinberg

Source: Post Carbon




Back to homepage


Leave a comment
  • Anonymous on July 16 2011 said:
    There is a lesson to be learned here, but although I tell people that I am the leading academic energy economist in the world, I am too dumb to get it. Or maybe that lesson is badly explained.In almost every microeconomics book with a chapter on game theory, there is a discussion of the 'beautiful blonde' problem, perhaps first shown in the Hollywood travesty 'A Beautiful Mind'. The solution given in those books is wrong because for the most part the issue is dynamic and not static. Some backward induction is needed for that problem as for the main energy problemof our time: HOW TO GET AN OPTIMAL - OPTIMAL - SUSTAINABLE ECONOMY IN THE LONG RUN.I have a few thoughts about this, but I think I will keep them to myself. I will however suggest that all the depletable resources will be depleted, and that is something that you can like or lump.
  • Anonymous on July 18 2011 said:
    Instead of hare-brain schemes to reduce dependence on foreign petroleum by demanding impossible corporate average fuel economy or "drill baby drill", we should do NOTHING! In other words, let free market forces do their thing. I have been saying for years that the most flexible way to incentivize conservation and develop renewable substitutes for petroleum (i.e. ethanol from switchgrass, algae, etc) is to let fossil fuels be expensive if that's what the marketplace is doing. And again, I cannot emphasize this strongly enough: If buildup of carbon dioxide in the atmosphere truly is a big deal, then impose a carbon tax on fossil fuels to incentivize a broad range of socially desirable behaviors such as smaller cars, more use of bicycles, car-pooling, and so forth.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News