Energy has been a major economic issue for more than 40 years now (remember OPEC '72?) This is giving away my age but I clearly remember gas being 60 cents per gallon (1970s) and being in econ class in college in 1972 and the professor exclaiming, "I GUARANTEE you all that you will live to see the day when a cup of coffee and a donut costs a dollar." And we all said, "No way!"
Little did we know that we would only have to wait less than ten years to witness that outcome, not a lifetime, not even close. All the while, energy - specifically oil - has been the major force driving higher prices (not to mention pollution, the depletion of the ozone, need I go on.) As we continue to go green, a revolution that is now a good 50 years old, we are conserving more and more and becoming more efficient in our consumption of oil. In fact, so efficient has this been that for the past two years the oil companies have been caught unawares with way too much inventory and that in turn has caused the glut that is responsible for the cheapest gas prices we've seen since the 1980s.
But we're going green not because we're running out of oil. In fact, most geologists believe that in all of human history we have not yet tapped more than 5% of the planet's total oil deposits. This is pretty much validated by the fact that most of our commodities -- gold, silver, diamonds, etc -- are in the same boat. Scientists believe we've only yet tapped about 5% of the planet's deposits of all these too. Most of the Earth's reserves have not yet been discovered but even the known oil reserves will provide at least another two or three centuries of the black gold. Just a couple years ago, there was another massive new deposit discovered in the Gulf of Mexico which scientists estimate contains enough oil to last 50 years alone.
So going green is not because we're running out but because fossil fuels just don't make sense anymore. They're dirty and inefficient and, if there is any truth to global warming, we have to stop using them or eventually destroy the planet. As economics goes, we would have been green long ago except that we still have such an abundance of fossil fuels that it's historically been cheaper to keep them than to go green, much cheaper. But that is rapidly changing. In fact, we should all be thankful every time the price of oil goes up because that just spurs along the green revolution. We are getting there and my guess is that in 50 years (maybe less) fossil fuels will be obsolete and we will be all green.
Just two weeks ago, the cover story in Time Magazine was about the latest breakthroughs in fusion energy with the prediction that long awaited fusion technology is less than ten years away. That alone will cause a very rapid conversion to green. Completely clean, completely safe, and very cheap nuclear fusion energy is going to change the world. Let's just hope that it all happens before the planet gets too much warmer and all this wild weather we've had in the past two decades can be relegated to history. Perhaps some of that will be decided in Paris next week. Meanwhile, today's column from Barry Ritholtz is all about one country across the pond that is making better than average progress towards going green. I hope everyone finds this short three minute video from National Geographic to be informative.
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