Four years ago I got into a debate with someone who decried the war as “blood for oil.” (He also went on to call American servicemen “pawns”, but I’ll leave that for another time.) I said then that the supply and demand of oil is a global problem, not just a United States problem. I explained how high oil prices would affect the price of food and its availability. I explained how essential it was to the global economy that the global oil supply wasn’t effected.
He didn’t agree with my assessment, said there was “no connection”, and that Bush was just “trying to make his oil buddies rich”.
Recent headlines prove who was right:
- Wal-Mart customers are feeling the pinch of higher food prices
- Corn hits $6 a bushel
- Rice prices jump 10% in Africa
- Rice Jumps to Record on Philippine Imports, Curbs on Exports
- Fuel Choices, Food Crises and Finger-Pointing
- Food Costs Rising Fastest in 17 Years
- UN chief warns world must urgently increase food production
- Food Rationing Confronts Breadbasket of the World
Oil prices and food prices & availability are intrinsically linked. This is a lesson we all must learn, and learn quickly. Taking part of our food supply (corn) and burning it as an inefficient fuel source (in the form of ethanol) is beyond idiotic because it causes both prices to increase and there’s no appreciable benefit to burning an inefficient fuel source.
Do we need an alternative to oil? Yes. But ethanol is not the answer, and until we find one, the stability of the world’s oil market and price is essential to everyone. And closer to home, it is essential to the preservation of our liberties.
Read More to view my original email:
From a sent email dated November 12, 2004:
Look, the world needs oil. Not just us. Alternative fuels are great and all, but until they are as inexpensive as gasoline, and until they provide as much energy (or more) per gallon as gasoline does, they’re not going to take off. Why? Economics.
What you need to understand is the concept of a global economy and how oil fits into the equation. Understanding how the Middle East and its oil reserves fit into the global economy is important to understanding the Middle East foreign policy of the US for the past 50 or so years.
The global economy — that is, how the economy of every country fits together and effect each other — revolves around oil. I know the Greens don’t like to hear this, but it’s true. From the suburbanite in their gas-guzzling SUV to the rice farmer in Thailand, the global economy is controlled by oil. Now… What happens when a “crisis” envolops te Middle East? Well, we immediately notice a spike in gas prices, sure. Over the long term, this can be a pain in the butt for us here in America. But what’s more important than that is the ripple effect. Joe Wheat is a farmer in the great plains of America, growing, well, wheat. The spike in gas prices means it costs him more to fill up his tractors and run his farm equipment, so he raises his prices, as does all his competitors. The distributor he sells to has to then raise their prices, since both Joe Wheat AND John Trucker have raised their rates. So George Distributor then charges more to Ngyen Importer in Thailand, who also has to pay more to Fernandez Shipper since fuel for his ship costs more than it used to. As the end result, Ngyen Importer can’t buy as much wheat as he used to, but he still has a car to put gas in, employees to pay, and a business to run, so he — like all his fellow businessmen around the world — raise their rates just to cover their expenses. The person that’s hit the hardest is little Szi Consumer, over there in Thailand. While the prices of goods, services, and materials has gone up, her employer can’t afford to pay her more. Matter of fact, her employer had to lay off half of the plant yesterday. But poor Szi can’t buy as much food anymore because she simply can’t afford it.
All this because of a pesky thing called oil.
That is the global economy we’re faced with. And unless the oil trade is stable, everyone suffers. Especially people in 3rd world countries like little Szi. The hardest hit are those that depend upon their government for food in poverty-stricken parts of the world like some spots of Africa. With an extended “oil crisis”, their currency cannot purchase as much food, and some of their population starves, leading to riots, disease, and in general… really bad times.
All because of that pesky oil.
I know I’m off tangent a little, but think about it: if you offer an alternative fuel right now, you need to offer a distinct advantage over gas. Basically, this comes down to cost. Unless it’s cheaper or more convenient, people won’t buy it. You have a whole infrastructure — from filling stations to vehicles to tractors to boats to airplanes — that has to be converted over. That costs money. And if I’m a farmer any my 30-year-old John Deere is still running fine, I’m not going to spend tens of thousands of dollars on a new one unless it’s going to benefit me some way. And the only benefit would be cost savings. If you force Joe Wheat and all his farming buddies to buy new tractors, the only way they can afford to pay for it is to raise their prices, which hurts everyone around the world.
The transition from oil to “alternative fuels” has to be seamless and gradual. It’s going to take 25-30 years, by my estimate. I mean hell…. how long did it take for us to transition from leaded to unleaded gasoline? Fifteen years or so? And that’s a minor change in comparison.