With the price of oil soaring in recent weeks, politicians around the world are scrambling to react. The price of the benchmark 'Brent' crude oil has increased by almost 90% in just 12 months, to around $115 a barrel. Now some speculators are betting that the price is headed towards $200 a barrel, which would spell global economic chaos.
In Spain, the government has already moved to reduce the highway speed limit and lower train fares to save fuel. In the UK, the Conservative coalition government was proposing to increase the speed limit but is now suddenly reversing course and looking to take sudden action to cut oil consumption. According to the Observer, UK energy secretary, Chris Huhne, says they don't have much choice. "Getting off the oil hook is made all the more urgent by the crisis in the Middle East. We cannot afford to go on relying on such a volatile source of energy." The problem for the UK government is that they were counting on cheap oil, and made no preparation for anything else.
The fact is that our governments were warned about the potential for a destructive cycle of oil price spikes and economic crashes years ago. For example in the wake of the 2004 oil price spike, the US Department of Energy's 'Hirsch Report' warned of exactly this likelihood. Hirsch recommended an immediate crash program to reduce US dependence on oil, noting that even 20 years would be a tight time frame to make the necessary changes.
In 2005, the International Energy Agency published Saving Oil in a Hurry which focused on emergency measures that could be taken to rapidly reduce transportation oil consumption with some advance preparation. Recommended measures include having plans to quickly create networks of bus and cycling lanes. But it seems that most governments are not prepared, and are now flailing about instead of implementing plans.
In BC, governments are still acting as if oil was going to be cheap and plentiful forever. Instead of taking logical steps to reduce oil dependency and protect families from oil price shocks, the Campbell administration has spent more and more on road and freeway expansions. For example, according to Transport Canada, in 2008/2009 the BC provincial government spent over $2.2 billion on roads and Bridges, up from $1.2 billion in 2001/2002. Much of this was spent on roadway expansions. In contrast, the provincial government reported spending only $660 million on transit and nothing on BC railways.
Some of these roadway expansion projects, such as the Golden Ears and Port Mann freeway bridges, are supposed to be paid for by tolls. But even before the most recent oil price spike, traffic and toll revenue was far below what is needed to break even on the Golden Ears Bridge so TransLink funds have been diverted from transit to pay for a mostly empty freeway bridge. The new Port Mann Bridge and freeway expansion represents $3.1 billion dollars that could have been invested in transportation for the future such as electric trains, light rail and trolley buses.
The Port Authority recently restarted plans to build another container terminal on the environmentally sensitive Roberts Bank in Delta, on the assumption that international trade will increase drastically in the coming decades. Our ports have a large amount of excess capacity after Port Metro Vancouver recently increased capacity at Deltaport by 50 percent and a new container port was opened in Prince Rupert. The director of SFU's urban studies program, Anthony Perl, maintains that with increasing oil prices long-distance trade will decline in the future rather than increase.
It is time to admit that the age of cheap and easily accessible oil is over. The remaining oil and petroleum gas is largely 'unconventional' supplies such as the tar sands. The cost of production of these sources is high, but the environmental and social costs are even greater concerns. For example, much of the gasoline and diesel we burn in BC is now produced from tar sands bitumen - a process that uses huge amounts of petroleum gas. Much of the gas burned in the tar sands comes from BC and is extracted by hydraulic fracturing or 'fracking' which result in widespread water contamination.
The problem is not only that our politicians are not prepared to make the changes needed to overcome our excessive oil dependence. It is also that as soon as the oil price roller coaster heads down hill again, they will once again try to convince themselves that nothing significant has changed.
Like with global warming, our leaders are mainly not prepared to lead. Ordinary people are going to have to propose real solutions and oppose the most destructive megaprojects our politicians dream up - such as the North and South Fraser Perimeter Road freeways.