As I write this, I am currently away from home to go to school in Wisconsin, but I am from Southwest Ohio. In an email from my family back home, I was told that a powerful windstorm blew through the area with wind gusts of 78mph, which is the remnants of Hurricane Ike which blew through the Texas area a couple of days ago.
As a result of this storm, many trees were toppled, power lines were ripped to the ground, shingles were torn off of rooftops, and an overall state of panic ensued. One of the consequences of such destruction was rationing of gasoline at the gas station, resulting in fights over gasoline. There were actually fights over gasoline! This raises a disturbing question: If we result to fighting when the gas station runs out of oil, what are we going to do when the Middle East runs out of oil?
According to the CIA World Factbook, oil exports account for 95% of Iraq’s budgetary income, while Iran’s income is heavily based on oil, with 85% coming from petroleum exports. Other countries are Kuwait and Saudi Arabia, with 80% and 75% of income coming from oil, respectively. Oil is all the Middle East has for a major source of income, and eventually, it will run out. We can conserve oil until the cows come home, but the fact remains; petroleum is a limited resource, and when supplies begin to dwindle to critically low levels, the countries that run out first will need new sources of income. When they look at the country next door and see plentiful reserves, you know as well as I do what will happen– fighting will ensue.
I look at the fight as a microcosm of days to come on a global scale. At the gas station, two people wanted what only one person could have, and they were left with a couple of options to resolve the issue. First, they could have split the oil 50-50, and each pay the gas station for their share. But there is one problem with this; what happens when the third guy sees them splitting the gas and decides that he wants his slice of the pie? Do you split it three ways? Alright, what about the fourth guy, and so on?
Another option would be to let someone on the outside decide what to do. In this case, the gas station attendant would have been a logical choice as a mediator. But on a global scale, who would be analogous to the gas station attendant? Who should act as the authority when countries disagree over oil? Should the United Nations do it? How about OPEC? Or should the US go on another power trip and bring “peace” to the Middle East by itself? What if that third party has an interest in the outcome of the deal? After all, most of the world’s oil comes from the Middle East. Perhaps mediation isn’t the best option after all? Well, let’s examine the other options.
Going back to the gas station example, maybe neither of the two guys should get the oil. But again, we are faced with the dilemma of who should make such a decision. And of course, this obviously is a poor decision at the global level, because the oil in a country belongs to that country, whereas at the gas station, the gasoline belongs to someone else. Fine, what are the other options?
What are the other options? Because as it stands, the same three options facing the men at the gas station are the only three options facing the countries in the Middle East, and as it stands now, none of the possible outcomes look good. You might be thinking that alternative sources of energy will save the day, but not quite. Using other sources of energy besides oil will still raise the problem we face when the oil becomes depleted, which is the lack of income for the oil exporting countries. The only difference is that in the oil depletion scenario, the problem is caused by a lack of supply, while in the alternative energy scenario, we are faced with a lack of demand. Either way, it leads to a lack of income for countries that have people to feed, roads to build, schools to pay for, and a myriad of other expenses required to keep people happy and healthy.
There are various estimates of how long it will take to use up the remaining oil reserves, some as low as three years from now, others saying we have as much as 40 years of oil remaining. Regardless of which estimates are true, we are still faced with the same problem of what to do when it is gone. The only difference is how much time we have before we need to worry about it. But even if we go with the estimate of 40 years, that still puts the end of oil possibly within your lifetime, and certainly within our children’s lifetime. Will this be one more problem that gets thrown off on the younger generations for them to worry about, like we have seen with the environmental problems facing us? The time to act is now.
I suggest a push toward alternative sources of fuel. As stated earlier, this would still lead to a lack of oil income for the countries in the Middle East. However, unlike the depletion of oil scenario, the alternative energy scenario has some potential benefits for the Middle East. First, the creation of alternative sources of fuel will require new machines to utilize that energy, which will create the need for manufacturing jobs. If the oil-producing countries are smart, they will turn this into a valuable source of income for years to come.
Israel is a perfect example of how this could be done. For years, they have been importing raw materials, using them to manufacture goods, and exporting the product to make a profit. This option seems even more attractive when we consider that many other nations, including the United States, are decreasing manufacturing output and shifting to a service based economy, leaving a need for other countries to take up the slack in the manufacturing sector.
Another economic benefit of a manufacturing economy is the diversification that comes from producing many goods. An oil based economy relies completely on oil-based products as a source of revenue, and if something happens to the oil, the income changes accordingly. On the other hand, if a third of income comes from manufacturing cars, a third from building solar cells, and one third from building fuel cells, you have a much more secure source of income. If demand for cars decreases, people will still need solar panels and fuel cells. If fuel cells become outdated in favor of new technology, you can still sell cars and solar panels.
In addition to the economic benefits of alternative energy, there will of course be environmental benefits in the form of decreased carbon output. Considering all of the potential benefits of moving away from an oil-based economy, our leaders should make it a top priority to see that it gets done quickly. However, that is not likely to happen until people start pressing for policy changes. The need for such a change is incredibly urgent, because if we continue on the path we are on now, we are going to have some problems down the road in the form of conflict in the Middle East. But with the economic implications of such fighting, it will quickly spread to other areas of the world. The only way to prevent involvement is to prevent it from starting in the first place by choosing the alternative option; an alternative economic structure based on alternative energy sources. We have choices of what to do, which choice will we make?