In Praise of High Gas Prices

Pain at the pumps reflects the true cost of gas, from car wrecks to smog to the Iraq war. Ready for alternatives?

By Mitchell Anderson 24 May 2004 |
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As gas prices loft into the stratosphere, likely never to come down, we can expect much indignant outrage about how this will end the world as we know it. Let's hope it will.

Our long addiction to cheap oil has cost us dearly in terms of health, global security, human rights and a changing climate. Given our lack of self-restraint, maybe we should see expensive gas is a godsend rather than a calamity.

First, let's remember that fuel prices will likely continue to rise and there is nothing we can do about it. Public proclamations aside, OPEC members are quietly admitting that they have little excess production capacity. Major oil companies such as Shell have recently had to "revise" their reserve figures. Couple this with ballooning demand in China and it all adds up to a simple fact: we are finally running out of cheap oil.

Like a drunk on a bender, it may not be welcome news that our favorite liquid is in short supply. There will be a hangover no doubt, but we should think about the benefits of kicking the habit. We may realize that our addiction has cost us far more than we realized.

Kicking an unhealthy habit

The Ontario Medical Association (OMA) estimates that provincial air pollution from burning fossil fuels causes 43 million sick days, 13,000 hospital visits, 9,800 hospital visits, and 1,900 premature deaths each year. Asthma, bronchitis, and congestive heart failure all are made worse by smog, estimated by the OMA to cost the provincial economy a staggering $12 billion each year and rising. Let's not forget car crashes, which cost the Ontario economy $9.1 billion each year, and cause 1,000 deaths and almost 90,000 injuries.

The costs associated with climate change are also adding up. Climate related disasters rose by 10 percent between 2002 and 2003, totaling over $60 billion. The heat wave in Europe last summer killed an incredible 20,000 people. Swiss Re, one of the largest re-insurance companies in the world announced last month that it expects that weather disasters to climb to $150 billion per year in the next ten years. As much as we love our cars, as they say: there's no free lunch.

And then there's the ugly business of securing foreign oil supplies. An obvious case in point is the clumsy and tragic intervention in Iraq that now seems likely to sow the seeds of war and hatred for generations. Over 700 Americans have been killed and probably around 10,000 Iraqi civilians - the U.S. is not counting. The monetary cost is a staggering $113 billion and counting.

Here at home many of our civil liberties are being sacrificed on the altar of the so-called "war on terror". This nebulous conflict has sprouted directly from our dependence on foreign oil and is eroding many of the constitutional protections that define our free and open society.

Gas needs to be even more expensive

Given the long list of externalized costs, a dollar a litre seems dangerously cheap for this popular poison. Our oil addiction has cost us dearly yet there seems very little hope that we can kick the habit on our own.

That point was made abundantly clear recently by US Senator James Inhofe, who chairs the Senate Committee on Environment and Public Works. At an international climate change conference last year he made a brazen statement typical of an addict in denial: "I'm becoming more and more convinced... that global warming is the greatest hoax ever perpetrated on the American people and the world."

Who to believe? The leading climate scientists in the world, or a senator from an oil-producing state in an election year?

Rising fuel prices will succeed where moral suasion has failed. In fact, they already have. Sales of the automotive monstrosity, the Hummer H2 have fallen 24 percent in the first four months of this year. I can think of no better index of an improving planet.

B.C. can cash in on green innovation

Higher costs will also foster much needed interest, innovation and investment in conservation and alternative technologies. Some oil companies may turn their massive resources to developing these clean energy alternatives rather than choosing to go down with their ship. A study by Shell International found that renewable sources could supply 50 percent of the worlds energy needs by 2050.

Such investment would be money well spent here in BC, which has been estimated by the World Energy Congress as having the greatest potential for wind power in the world. This ignored potential is particularly galling given that Canada currently produces less than 0.1 percent of its electricity from wind power compared with 20 percent in Denmark.

Our governments need to play an important role in this transformation by bringing in smart subsidies and progressive tax shifting that favour conservation and innovation, but there is a long way to go. The Canadian government still provides $5.9 billion in annual subsidies to the fossil fuel industry. Such "perverse" subsidies contribute to our substance abuse problem by ensuring that Canada and the U.S. have the lowest energy prices in the G8.

There are some obvious places to start our recovery. The federal government could shift gasoline tax revenue to public transit, increase green infrastructure investment in cities, and expand investment in renewable energy - the fastest growing source of energy in the world.

'Bad drunk on a bender'

Many of these changes are detailed in an excellent report Sustainability Within a Generation - A New Vision For Canada produced recently by the David Suzuki Foundation. Courageous vision seems to be a commodity sorely lacking in Canadian politics and our election bound politicians would do well to crib shamelessly from this fine document.

Canada has an opportunity to become a leader in alternative technologies that will sprout from the ashes of our oil economy. A cleaner and safer world awaits if we have to vision to embrace the future rather than cling to the past.

Change will come, and we should welcome it. When it comes to cheap oil, the developed world has been like a bad drunk on a bender. Thank God the booze is running out.

Mitchell Anderson is a Staff Scientist with the Sierra Legal Defence Fundin Vancouver. For a related view of high gas prices see this by Northwest Environment Watch.  [Tyee]

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