For the first time in like forever, a spike in the price of oil hasn’t wrecked the American economy.
The CEO of Exxon speaks wistfully of a new recession but it’s not happening. Not this time.
There are economists with all sorts of explanations involving the stimulus and how poor people – who are hurt the most by higher prices – aren’t a big deal.
But the truth is simpler. We are weaning ourselves off oil. Slowly, but surely.
The renewable industries deserve some credit for this. The most effective investment remains efficiency, and many people have made that investment, especially large enterprises. More meetings are taking place online, more fleets are running on natural gas, more goods are traveling by train, more buildings have been insulated, more lightbulbs replaced. New appliances require less energy than those they replace.
It was, as we predicted, pretty easy to do. In my own case I traded in a 15 mpg minivan for a 30 mpg microvan over five years ago. I service it regularly and combine trips. I live intown so my trips are short. I insulated the walls and floors of my 90 year old house so it’s tighter than new construction.
It’s easy to see that multiplied on the streets of Atlanta. Once I was an anachronism on my old yellow bike. Now bikes are all over the intown roads, even on weekdays, even when the weather is harsh. My wife walked to the train the other day with a woman who had gotten rid of her car and planned to rely on mass transit and Zipcars.
When you think about your energy use, you can use a lot less of it. This is more true for businesses than consumers, but it’s true for both.
As these investments take hold, the boost that comes from renewables becomes a bigger part of the whole energy economy. Electricity plants no longer need to run on oil, and coal demand is declining. The next steps are more expensive, involving paying-up for solar panels and windmills and biomass research, but these investments are being made, driven by deep-seated political will, and the fact that people see the progress already being made.
It’s still possible that growth could be squeezed out by even-higher oil prices, but the political impact of that will not be what the fossil fuel people expect. What policy makers are pushing right now are higher gas taxes, to capture savings when prices decline and spur the purchase of higher-mileage vehicles.
That will be important because after the last oil price shock, in 2008, sent gas prices up over $4/gallon, they quickly plunged to under $2/gallon. Keeping gas prices at the highest sustainable level is just as much a subsidy for renewables as anything else – it brings more projects into profit.
So take a bow. Then get back to work.