Don Julio Speeches on Anthropological Desalination of Young Minds - Vol.3 Appendix

Al Gore, who was George W. Bush's opponent in his first election and lost the presidency to him only because of the complex rules governing the electoral process in USA and who right now is an environmental lobbyist, recently made a very interesting comment; he said that within a decade America can switch from fossil fuels to other more sustainable energy sources. He as well as many other people around the globe know that such a transition is feasible yet it is not still justifiable. This is undoubtedly due to the fact that the current infrastructure of not only the US economy but the global economy is based on fossil fuels, this would mean that a rapid transition to more sustainable energy sources needs abandoning the current infrastructure, which in US alone sums up to many trillion dollars.

So even if Al Gore challenges the US government to pursue such a task, they simply won't do it because it is not cost effective. But one must consider this a bit more; here I'll try to explain what I think about the future of fossil fuels. First of all, the current oil and gas reserves around the world will last around another 80-100 years, so the real need for switch over to other energy sources will not be felt until at least 40-50 years from now, however there are other factors involved that may still tip the scale a little bit sooner. For example; there are many who are concerned about the environmental cost of fossil fuels (e.g. Global Warming), they argue that the opportunity cost imposed by fossil fuels is canceling out any benefit they may have, yet this argument is mostly ignored around the world, as few of world leading economies recognize such opportunity cost or are willing to address it. However, there is another factor involved which may prove to be more crucial, and that is the "price" of fossil fuels, recently although the demand and supply market are in an equilibrium, we have seen considerable hikes in prices of oil and gas, with oil now reaching 150$ per barrel. This has pleased many oil exporting countries, but make no mistake, this is an alarm, as oil prices continue to rise (and I can assure you that they will) eventually a threshold will be reached and suddenly the option of "Switching Over" will not seem so unjustifiable. The slow trend of switching over has already begun (with Biofuels), yet it has not still formed into a wave. Remember combustion engines that run the global economy are almost at the edge of fuel efficiency, and so there is no other way, the next step is to abandon fossil fuels.

Right now oil exporting countries have the initiative and they must try not to lose it, there are several key strategies that they need to follow: the first one is a temporary measure; they should try to calm the market, they need to make more oil available and stabilize the market (although I think it is arguable that the global economy can still accommodate higher prices (as high as 200-250$ per barrel)). The second strategy concerns how they invest the money gained from oil exports. The best example is Norway, they distribute part of oil revenue among the nation either as direct payment or through public goods such as health and education, and they invest the other part into building the country’s infrastructure. Natural resources belong to every member of the nation, so spending their revenue should follow a redistributive pattern and ensure an intragenerational justice, yet these resources also belong to future generations, we can not deplete the nature, an old native American saying puts it “We have not inherited the earth from our forefathers, but we have borrowed it from our sons”. This brings us to the third and most important strategy which is making the economy oil independent, countries such as Iran need to rely less and less on oil revenues and spend the oil revenues in a way that ensures inter generational justice, meaning that the future generations will also have means of sustaining their economy and utility.