Time for us to admit to our oil addictions

Thursday, 11 October 2007

For something as important as energy royalties, the debate has been incredibly limited and myopic. Sure, there have been enough columns, letters to editors, and full-page advertisements to rival the royalty review panel’s 104-page report. However, there hasn’t been much talk of the social and environmental problems caused by the oil industry and how we could apply this 20 per cent increase in royalties to help solve these problems at the same time.

It’s only fitting that a debate about oil and money should focus solely on squeezing out every last drop. On one side is the middle-class taxpayer, eyes wide and sparkling with the prospect of tapping into the oil industry’s huge profit margins. On the other is “Big Oil,” clutching its profits tightly and threatening to take its money elsewhere, collapsing the economy on their way out.

In the end, the government will settle on whatever rate they think will get the highest immediate returns, and we’ll go back to mindlessly consuming. Economists will tout this as a triumph of capitalism over intervention, but it really just illustrates the shortcomings of the greedy invisible hand. However, we the consumers aren’t free of blame: an old adage states that you vote with your money, and if that’s the case, the election’s rigged, and every litre we buy is a vote for the oilsands. Turnout’s in the high 90s, and it’s a landslide every time.

In the end, you get what you pay for. The oil companies don’t actually make the oil, but be assured your money does get spent. What you see is gasoline, but what you pay for is strip mining, polluting refineries, and a kaleidoscope of emissions.

There’s also no such thing as gouging at the pumps. High prices over long weekends are a simple case of supply and demand. Don’t like it? Don’t buy it. Lower prices trade our future for a few bucks today, just like our current breakneck pace will only hurt us in the long run. Put yourself in the shoes of the oil executive with the end of the free ride potentially only 30 years off and the realities of the market to deal with.

Big Oil isn’t just some shady board of villains, it’s you and me—the addicted users. Right now, by placing our hopes in biofuels as a solution, we’re reflecting what we’re telling the oil companies: “protect the environment if you can, but protect my wallet first, and don’t make me give up my car.” We’re only pretending to care about the environment, and the oil companies are playing along, feeding us lies about how biofuels will solve all our problems and how they’re working on it right now.

Now is the time to force the oil companies and addicts to feel the cost of their choices. The report recommends breaking royalties down into wet, dry, sweet, sour, heavy, light, shallow, deep, high-volume, low-volume, and more to try to squeeze every last cent out. Each has an environmental impact, so logically, the board should recommend that any fees be applied to this area.

Unfortunately, this is a process driven by greed and not logic, so the recommendation is a flat fee of ten cents per barrel equivalent. Not only is this a minuscule amount, but it implies that oil and natural gas create the same emissions, that strip mining is the same as drilling, and that all refining processes are created equal. This is blatantly false, and ignoring the data we already have makes no sense—unless, of course, you’re blinded by the glittering dollar signs.

Since the board lumped agriculture, mining, and forestry in with energy, we now know how much they’re telling the government the environment is worth: $75 million. This is nothing compared to the royalty money which will only serve to propagate our existing oil-dependent society. This pittance is then to be spent on “pro-active, multi-stakeholder managed research and innovation programs directed to promote a well-thought-out future.”

So while they’re planning on thinking about a more secure future, we’ll continue guzzling oil, and nothing changes. I feel better already.