an absurd economy

High fuel prices are irking Americans. There are calls for government intervention. Investigations into price gouging. Appeals to reduce the federal excise tax. Calls for a summer gas holiday. Despite all that fury, Americans pay less for gas than the rest of the world. They also waste more gas than the rest of the world. And the news is not all bad: high gas prices are causing many to drive less and opt for public transportation. Given the enormous waste that is a good thing. Gas prices should be kept high according to many. It appears to be the only way to solve the global warming crisis.

Europeans are even more unhappy. They pay more than $8 a gallon now and that is causing serious hardship. It is hurting the transportation business, the fishing industries, and agriculture. One could agree that $4 is a good thing since it makes people more aware, but maybe $8 is too much of a good thing. After all, Europeans are already quite fuel-efficient. How much more can one push?

Let's take a look at Western economies and see what decades of cheap oil have done. The transportation business for example, how essential is all that cargo? I have earlier pointed out how much people spend shipping water all around the planet. Water is very heavy so it is a very energy-intensive item to ship. Furthermore, there is enough clean drinking water everywhere in the Western World. So much so that people flush their toilets with it. Everyone has access to clean, high quality water that is often of better quality than the bottled water we bring in. Clearly this is a totally unneeded business.

Yet people never think twice before ordering Evian or Perrier from the French Alps, or San Pellegrino from Italy. Global sales of bottled water were estimated at $100 billion a year. Global consumption was 154 billion litres in 2004 and it has been growing by more than 10% a year since. 154 billion litres weigh 154 billion kilos or 154 million tons. In 2006, the US consumed more than 8 billion gallons (30 billion litres or 30 million tons !) of bottled water.

That is not all. Consumption of carbonated soft drinks is even higher. Given that these are water, some carbon dioxide, tons of sugar and some flavorings, once again one has to wonder where the need is. Not to mention the 50 billion empty bottles and containers that end up in landfills every year. At least 23 billion of those contained nothing but water. Producing the bottles alone consumes the equivalent of 17 million barrels of oil. Bottling created 2.5 million tons of CO2 according to the Pacific Institute. And we haven't even left the factory!

Producing and shipping bottled water and carbonated sodas may be the biggest waste of resources but it is not the only one. As a matter of fact we ship unnecessary stuff all the time. We ship cheese and wine to Europe and they ship cheese and wine to us. Most of the intra-EU trade consists of such needless exchanges. The French drink Italian wines and the Italians drink French wine. The Dutch eat Belgian cheese and the Belgians eat Dutch cheese.

Cheap transportation also allows Norwegian fishermen to catch fish, ship it to China for cleaning, and then reimport it for sale in Norway. These idiotic arrangements are no fluke. They happen everywhere and all the time. And they are all due to cheap oil. It is cheaper to ship and have fish cleaned in China than in Norway. It makes economic sense to do it this way and so people do. That they also waste a precious resource in the process is something nobody worries about. That they also pollute our planet and emit greenhouse gas is something that has only recently received a little bit of attention.

Cheap oil has warped the West and undoing these knots will be a very painful process. So painful that it seems likely people will go through great lengths to try and preserve the status quo. That is very unfortunate. Because we are wasting a precious resource that is limited and won't be easy to replace. An non-oil economy is simply not feasible. That is the plain truth and oil executives and anyone with a bit of sense knows it. Solar panels are not going to ship bottled water around the planet.

Fortunately, there is plenty you can do. Drive less, don't drink bottled water -it is lower quality in any case-, don't drink sodas -they make you fat-, and become a locavore. All these will save you money and help the environment. They will also induce lawmakers and politicians to undo the absurd economy that oil has created.