In what might go down as one of the ultimate scientific flops of all time, a 1975 article in Newsweek documented a frightening phenomenon threatening the planet -- global cooling. That's not a typo. Even though it might be hard to believe today, some climatologists back then proposed covering the Arctic ice caps with soot to help them melt faster. And that was just 33 years ago.
It's the end of the world as we know it, and I feel fine
We live in a world where the Internet and a 24-hour news cycle won't let you escape predictions that can scare the pigeon scat out of you. Some of the predictions make a lot of sense. Some make you stop and think. Others are just plain delusional. But you shouldn't just brush them aside.
Let's try to put to rest one scenario that falls into that last category. Oil is on the tip of everyone's tongue right now, and for good reason. Its rising cost is taking a serious toll on people's finances, and there's no end in sight to the misery. The price of oil will continue to be a thorn in our sides for some time to come. That isn't a question.
But look at some of these snippets I found:
- Fortune columnist Stanley Bing recently predicted (jokingly, we hope), "By 2035, a consortium of banks, corporations, and what remains of the government will accept a tender offer from Saudi Arabia to acquire the U.S. for $15.50 per share plus all the oil we can drink."
- A website called "Life After the Oil Crash" welcomes its visitors by saying "Civilization as we know it is coming to an end soon."
- A 2004 BBC article, when mentioning the prospect of $160 oil, asks, "How will you pay to run your car? How will you get the children to school? How will you heat your house? ... The basic answer is, we won't."
Geesh. That doesn't sound fun. But before you run out and invest in a burial plot, think about why so many past doomsday predictions have failed to come true. Often, those making the predictions focused all of their attention on a single factor, without giving much thought to anything else -- especially things that work against the factor they've chosen. I don't want to sound like a physics teacher, but, for every action, there's an equal and opposite reaction.
So what does that mean for oil? Those predicting the end of the world probably won't mention that:
- Americans have already pared down their driving habits by 4.3%, or 11 billion miles, since March.
- The nation's largest single consumer of oil -- the U.S. military -- has begun shifting to alternative forms of fuel, such as liquefied coal.
- Higher oil prices have made it profitable to develop oil shale in the U.S. By some estimates, oil shale represents eight times the amount of oil Saudi Arabia has.
That's why, when you hear comments that start, "If oil goes to $1,000 a barrel, and the U.S currently consumes 20 million barrels a day," you can just stop right there. Because if oil actually does go to $1,000 a barrel, we won't be consuming 20 million barrels a day anymore.
Already, you're seeing oil-saving measures. GM (NYSE: GM ) has plans to roll out a fully electric car in 2010. The new Toyota (NYSE: TM ) Prius, set to debut next year, is rumored to get upward of 94 miles per gallon. Honda (NYSE: HMC ) recently delivered a handful of hydrogen cars to the U.S.
And it's not just happening with cars. General Electric (NYSE: GE ) , United Technologies (NYSE: UTX ) , Boeing (NYSE: BA ) , and Honeywell (NYSE: HON ) -- just to name a few of the big ones -- are all part of the alternative-energy push in one way or another.
Right, but ...
I know what you're thinking. "Too little, too late." You could be right. But it's only been recently -- as in the past six months -- that people really began to understand and feel oil's wrath. If you're going to predict the rate of progress over the next 20 years by how quickly it's gone over the past 20 years, you're kidding yourself. When it comes to oil, there hasn't been any need to change until just recently. People survive on their ability to adapt. And in an economy that went from horse and buggy to putting a rover on Mars in less than 100 years, I'd say we know a thing or two about getting done what needs to be done.
That doesn't mean a quick fix will fall on your doorstep tomorrow morning. But thinking the end of oil spells the end of the world makes sense only if you assume that people will sit back and accept a life of misery. They won't.