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We are finally running out of cheap gas good


As gas prices loft into the stratosphere, likely never to come down, we can expect to hear much doomsaying about how this will end the world as we know it. Let's hope so.

Our long-standing addiction to cheap oil has cost us dearly in terms of health, global security, human rights and a changing climate. It has also long stifled investment and innovation in alternative energy sources and technologies. Maybe we should look at expensive gas as an opportunity rather than a crisis.

First, let's remember that fuel prices will likely continue to rise yesterday they hit record prices on world markets 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 might not be welcome news that our favourite 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 more than we realized.

The Ontario Medical Association estimates that air pollution from burning fossil fuels causes 43 million sick days, 13,000 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 per cent between 2002 and 2003, totalling more than $60 billion. The heat wave in Europe last summer killed more than 20,000 people.

Swiss Re, one of the largest reinsurance companies in the world, announced last month that it expects the cost of weather disasters to climb to $150 billion per year in the next 10 years.

As much as we love our cars, there's a saying that keeps coming to mind: There's no free lunch.

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. More than 700 Americans have been killed and probably around 10,000 Iraqi civilians the U.S. is not counting. It has so far cost more than $113 billion.

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

Our oil addiction has cost us dearly but there seems little hope that we can kick the habit on our own.

U.S. Senator James Inhofe, who chairs the Senate Committee on Environment and Public Works, made that point clear.

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."

So who are you going 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 per cent in the first four months of this year. I can think of no better index of an improving planet.

Higher costs will also foster much needed interest, innovation and investment in conservation and alternative technologies. Perhaps some oil companies will turn their massive resources to developing these clean energy alternatives rather than choosing to go down with their ship.

That would be money well spent in British Columbia, which has been estimated by the World Energy Congress as having the greatest wind power potential in the world.

Our governments can play an important role in this transformation by bringing in smart subsidies and progressive tax shifting that favour conservation and innovation.

Canada has an opportunity to become a leader in alternative technologies that will sprout from the ashes of our oil economy.

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.